United States Fidelity & Guaranty Co. v. A. C. Vreeland, Inc.

JONES, J.

This suit is for $105.93, amount of premiums due by defendant to plaintiff on three bonds and a policy of insurance, all as shown by the statement annexed to plaintiff’s petition.

Defendant admitted the correctness of the items and extensions in his answer, but averred that the statement was incomplete because a commission of $93.86, due on a bond issued to the McKeithen Construction Company had been omitted. If this amount were credited the balance due would be $12.07, which amount had been tendered to plaintiff.

The lower court decided for plaintiff and defendant has appealed.

Whether defendant or J. J. McGrath is entitled to the commission of $93.86 on the McKeithen bond is the factual issue before us.

The record shows that J. E. Buck and J. J. McGrath became managers of plaintiff company on January 1, 1923, at which time and for several years prior thereto, the McKeithen Construction Company was a customer of plaintiff. McGrath’s connection with the company was severed in, June, 1923, and at that time, he was indebted to the company for approximately $5,000.00. Later McGrath became attached to defendant’s office under an. arrangement by which he was allowed on all business controlled by him 15% of the 20% obtained by defendant. He was also advanced $40.00 a week by defendant pending payment of his commission. McGrath had been more or less intimate with McKeithen, while acting as a joint manager for the plaintiff company and in the latter part of December, 1924, he tried to get a bond for Mc-Keithen through the Vreeland Agency. This, he was unable to do, because defendant did not have a financial statement of McKeithen in his office which was a prerequisite to issuance of the bond. Mc-Keithen then applied to Buck, who personally filled out the application for the bond at the Hotel Monteleone in this City, where it was duly signed by McKeithen. At that time, McKeithen asked Buck if he would allow McGrath a commission on the bond and Buck consented to this. By doing this Buck could please a client without costing his company one cent, because of Mc-Grath’s indebtedness.

At the end of January, plaintiff following its usual custom, mailed a hill to MeKeithen for the amount due on this bond. At the same time, it sent a copy of the bill to defendant, and credited to McGrath on its books, 20% of the commission, which amounted to $93.86. Buck, in explanation of his sending the credit memorandum to defendant instead of to McGrath, says that he knew McGrath had an office with defendant but that he did not know what the relationship was between them.

The record contains a carbon copy of a letter from the MeKeithen Construction Company to plaintiff of date March 11, 1925, in which MeKeithen requested that the commission of $93.86 be paid to defendant. Defendant’s able attorney argues that this letter tends to show that MeKeithen thereby recognized that the business properly belonged to his company. The force of this argument is greatly weakened, if not destroyed, by the fact that the record also contains a letter to MeKeithen Construction Company of date February 28, 1923, signed by McGrath in which the writer stated that a dispute had arisen about the matter and that he wished to settle it by having the commission credited to defendant.

Evidently McGrath had realized that the paper credit to him would be of no financial benefit as he would not get a cent in cash whereas he would get some small amount if it was paid through the Vreeland Agency.

The record also shows that it was the invariable custom of defendant, when it had secured the services of plaintiff to write a bond or policy for one of its customers, to charge the premium on its books and make the collection itself. In such cases, it, as an insurance broker, owed the premiums to the plaintiff, whether it collected them from its customers or not. In the MeKeithen case defendant made no charge on its books but plaintiff charged Mc-Keithen directly with the premium and collected it from him. If he had failed to pay it would have been plaintiff’s loss, not defendant’s.

The fact that Buck agreed to give Mc-Grath the commission under the circumstances does not strike us as improbable. MeKeithen, who had done business for a long time with McGrath, while he was with the plaintiff company would naturally be anxious to help his friend, if possible, and Buck would naturally wish to please his customer and do the favor for McGrath, if he could. Such a step was wise in this case, as it greatly pleased his customer without cost to his company.

A careful consideration of the evidence as analyzed above convinces us that the question of fact was correctly answered by the trial judge.

For above reasons, the judgment appealed from is affirmed.