Boston Store v. Hartford Accident & Indemnity Co.
227 Ill. App. 192
Ill. App. Ct.
1922
Check Treatment
Mr. Justice Gridley

delivered the opinion of the court.

The main contention of counsel for defendant is that the judgment should be reversed because of plaintiff’s failure to give prompt written notice of the accident to one of defendant’s duly authorized agents, in accordance with the terms of the policy. The argument is, in substance, that the Shaw Co., insurance brokers, was the agent of plaintiff and not of defendant, that the written notice given to the Shaw Co. on April 7, 1915, the day after the accident occurred, was not notice to defendant, and that the notice given by the Shaw Co., to defendant on August 15, 1916, more than a year and four months after the accident, was not a compliance with the terms of the policy and absolved defendant from all liability thereunder. Counsel for plaintiff states in his printed brief and argument here filed that the notice of the accident to defendant by the Shaw Co. on August 15, 1916, “was admittedly too long delayed,” but counsel argues, in substance, that, although the Shaw Co. was the agent of the assured (plaintiff) in some matters, it was also the defendant’s agent in other matters; that under the facts disclosed the Shaw Co. was defendant’s agent in receiving notices of accidents, and its agent in receiving plaintiff’s notice of April 7, 1915, and that such notice to the Shaw Co. was notice to defendant; and that, even if such notice be not considered as sufficiently prompt notice to defendant, its acts and conduct, after it received the notice of August 15, 1916, are such as, under all the circumstances, should estop it from disclaiming liability.

Although ordinarily an insurance broker is considered the agent of the assured and not of the insurance company, sometimes the actions of the company and its dealings with the broker create the relation of principal and agent between the company and the broker. In 22 Cyc. .1427, it is said: . “A person may become authorized to bind the company as its agent not only by formal appointment as such agent, but also by being authorized by implication to act on behalf of the company in relation to its business; and in general persons who with the knowledge and assent of the company act for it in soliciting or procuring or contracting for insurance are held to be agents without formal appointment. The authority of the agent is often sufficiently indicated by the general course of business in which he acts for the company, such course of business being known to the company and not objected to.” It is well settled in Illinois that an insurance broker is sometimes the agent for the company in the delivery of policies and in the collection of premiums. (Lycoming Fire Ins. Co. v. Ward, 90 Ill. 545; Frankfort, etc., Ins. Co. v. Lynch, 156 Ill. App. 485; Kuhlman v. Adkins, 180 Ill. App. 611; National Hotel Co. v. Merchants’ Fire Assur. Corporation, 183 Ill. App. 71.) In Sun Mut. Ins. Co. v. Saginaw Barrel Co., 114 Ill. 99, 102, it is decided that correspondence between brokers and an insurance company, showing previous relations and methods of business in respect to insurance effected through their instrumentality, is proper evidence on the question of their being agents of the company; and that, where the brokers did not pay the premium to the company, although received by them from the assured, the question whether payment to them of such premium was .a payment to the company, in view of their previous course of dealing with it, was one of fact to be determined by the court sitting as a jury. (See also Lumbermen’s Mut. Ins. Co. v. Bell, 166 Ill. 400, 405; Firemen’s Ins. Co. v. Horton, 170 Ill. 258.) In Pringle v. Ætna Life Ins. Co., 123 Mo. App. 710, it is decided that, while generally an insurance broker is the agent of the assured and not the insurer, a broker may have his ordinary relations to the insurer enlarged, and that, if the custom in the business community is for the insurer to treat the broker who solicits the insurance as its agent in receiving premiums, notices of loss and summons in suits, the broker’s acts within the limits of such custom binds the insurer. In this Pringle case it appears that Pringle, a contractor doing work in which others were employed, obtained a policy of liability insurance in the Ætna Co. through one Joseph Bush, who acted as a broker and who solicited the insurance from Pringle. One Mastín was the general agent of the insuring company. Bush delivered the policy to Pringle, collected the premium and divided commissions with Mastín, taking the same out of the premium. When the accident happened to the employee, Pringle notified Bush and Bush notified the company, through Mastín. When suit was started the summons was served on Pringle and he delivered it to Bush, but the latter, instead of sending it to the company, or delivering it to Mastín, mailed it by mistake to another company, of which he was the agent. It was conceded that the subsequent delivery of the summons to Mastín was made at a time too late to constitute a compliance with the provisions of the policy. The court, in affirming a judgment in favor of Pringle for certain damages sustained in connection with said suit, made the decision above mentioned, and in the course of the opinion said (p. 713):

“If Bush was defendant’s agent so as to bind it by receiving the summons from plaintiff, the agency must have arisen by some special circumstance or consideration which arose in the conduct of the particular business relating to this policy. The plaintiff * * * must have known that Bush was procuring the insurance as a broker. * * * But there is no reason why one who has acted as broker may not have his ordinary relations to the company from which he procures the insurance enlarged. * * * The defendant argues that, though the insurer permitted the broker to receive and transmit to it notices of accidents and suits thereon, it did not follow that his agency for that purpose was recognized. We think it does follow. Any other rule would be unjust and deceptive. Permitting such action to be taken is inviting it to be taken.”

While in the present case there is no evidence of such a custom as was disclosed in said Pringle case, there is evidence of such a previous course of dealings, relating to insurance matters, between plaintiff and the Shaw Co. and between the Shaw Co. and defendant as tends to show, we think, that the Shaw Co. was considered by defendant as its agent in receiving-notices of accident. The Shaw Co. kept a running account with defendant. When a party wanted a policy, such as defendant would write, the Shaw Co. would order it, receive it, deliver it to the assured, collect the premium, and place the amount in its own bank account, making monthly settlements with defendant. If the Shaw Co. received an application for such insurance as was written by defendant after its Chicago office had closed for the day, or prior to a holiday, the Shaw Co. was permitted to make the policy effective as of the next business day. If accidents occurred in plaintiff’s business, covered by defendant’s policy, it was plaintiff’s habit or custom to send the notices to the Shaw Co., which in turn transmitted them to defendant. This habit or custom was known to defendant and it made no complaint but accepted the notices and acted upon them. If defendant desired to take up any question concerning plaintiff’s policy it would always communicate with the Shaw Co. Both parties recognized the Shaw Co., so to speak, as a “go-between.” The cases of Hamm Realty Co. v. New Hampshire Fire Ins. Co., 80 Minn. 139 and Warren v. Franklin Fire Ins. Co., 161 Iowa 440, may be cited as sustaining the proposition that a broker may be considered as the agent of the assured in some matters and also as the agent of the insurer in other matters, or sometimes as the agent of both parties. In the Hamm Realty Co. case (p. 142), it is said: “There is no doubt that a general insurance agency, representing a number-of companies, may act as the representative of the insurer and the insured for the purposes above mentioned, or, in other words, be the agent for both parties, within the limit's suggested. (Citing cases.) Such a business arrangement is in many cases adopted by business firms and corporations in cities, and is beneficial both to the underwriters and the parties insurpd — adding to the business of the one, and relieving the other from anxiety regarding the expiration and replacement of risks.” .Our conclusion is that the finding of the trial court in the present case, on the question whether the Shaw Co. was authorized by defendant to receive for it the notice of April 7, 1915, of the accident, was fully warranted by the evidence.

This conclusion renders it unnecessary for us to discuss at length plaintiff’s counsel’s point as to estoppel or waiver. We may say, however, that, even if plaintiff’s prompt notice of the accident, served on the Shaw Co. on April 7, 1915, be not considered as notice to defendant, we are of the opinion, under the facts disclosed, that defendant’s acts and conduct after it received on August 15, 1916, the notice from the Shaw Co., were such as would prevent it from avoiding liability, because of lack of prompt notice, under the doctrine of estoppel or waiver. (Cox v. American Ins. Co., 184 Ill. App. 419; People’s Fire Ins. Co. v. Pulver, 127 Ill. 246; Prentice v. Knickerbocker Life Ins. Co., 77 N. Y. 483.) We find no evidence of fraud on plaintiff’s part in connection with the cancellation of the indorsement to the policy concerning chauffeurs’ helpers, as suggested by defendant’s counsel.

Counsel also call our attention to the fact that, while the amount of the finding and judgment is $3,304.25, the amount of plaintiff’s ad damnum is only $3,100. We do not find that this point was brought to the attention of the trial court, and it cannot be taken advantage of for the first time in this Appellate Court. (Grand Lodge, etc. v. Bagley, 164 Ill. 340; People v. May, 276 Ill. 332.)

The judgment of the circuit court should be affirmed and it is so ordered.

Affirmed.

Barnes, P. J., and Morrill, J., concur.