Where a petition alleges that a soliciting agent of an insurance company has complied with and performed all conditions of his employment contract, that the insurance company refused to accept an application for insurance submitted by the agent, and that immediately thereafter the insurance company accepted an application for the same risk submitted by a broker in another State and paid to the latter the commissions for the solicitation of the insurance contract, a cause of action is set forth, and the petition is not subject to general demurrer.
DECIDED OCTOBER 4, 1947. The plaintiff, L. M. Harrington, brought suit against the defendant, Travelers Insurance Company, to recover damages alleged to have resulted from a breach of a contract entered into between the plaintiff and the defendant. The allegations of the petition material to a determination of the issue here involved *Page 760 are substantially these: (2) The plaintiff and the defendant entered into a contract under date of February 9, 1945. Under the terms of said contract the defendant appointed the plaintiff its agent and authorized the plaintiff to solicit various policies of insurance contracts and in consideration for such policies of insurance contracts so accepted by the defendant, to pay to the plaintiff a commission as set forth in said contract. (3) The petitioner shows that by the terms of said contract he was authorized to solicit wholesale insurance and collect from the defendant commissions from premiums paid the defendant on wholesale agreements. (5) The petitioner, as agent aforesaid, with knowledge to, approval by, and assistance of the defendant solicited a wholesale insurance and group accident and sickness policy with St. Marys Kraft Corporation, St. Marys, Georgia, for coverage of its employees under the terms of such insurance contract. (6) St. Marys Kraft Corporation purchased from the defendant the wholesale insurance contract, which originated from and was carried to a conclusion by petitioner with full knowledge to the defendant of the solicitation of such insurance contract. (7) The defendant with full and complete knowledge of the plaintiff's solicitation of said wholesale insurance and group accident and sickness policy did accept the solicitation of the policy from an insurance broker of New York City who is a director of the Gilman Paper Company, the parent company of St. Marys Kraft Corporation. The name of said insurance broker is unknown to your petitioner. The defendant in accepting the solicitation and writing said wholesale insurance and group accident and sickness policy with knowledge of the petitioner's solicitation of said insurance did conspire to and did falsely, fraudulently and deceitfully pay the commissions for the solicitation of the insurance contract to said broker, to the injury of your petitioner. (8) The petitioner shows that by reason of the defendant writing such wholesale insurance and by the defendant's fraudulent acts and refusal to pay the petitioner commissions due him, the petitioner is due $7037.85.
The contract entered into between the plaintiff and the defendant provides in part: (1) The territory within which the agent may act shall be the following: Brunswick, Ga., and vicinity. (3) The agent is authorized to solicit applications for life insurance *Page 761 and annuities, to offer all such applications to the company and to collect all premiums on policies and receipts sent to him for collection. He shall promptly submit applications and pay over premiums to the company's branch office at Atlanta, Georgia. (5) The company will pay on premiums paid to the company as full compensation on policies issued on applications secured by or through the agent, subject to a right of reduction or set-off because of any indebtedness of the agent to the company, commissions as follows. (9) If the company shall return the premiums on a policy or any portion of such premiums or cancel a policy for any cause, the agent shall repay to the company on demand the amount of commissions received on the premiums so returned.
By circular letter from the defendant, the following was added to the contract of the plaintiff: "Until further notice and subject to the terms of your contracts, the company will pay you on premiums paid to the company, on policies issued under wholesale agreements while the agent is properly licensed, commissions as follows: . . Please attach this circular to your contract, life department, of which it forms a part."
By amendment the plaintiff added the following: "The said sum of seven thousand thirty-seven dollars and eighty-five cents ($7037.85) is due petitioner by the defendant as commissions derived from premiums on an insurance policy written by defendant resulting from petitioner's solicitation and concluded by petitioner covering the insurance policy issued on employees of St. Marys Kraft Corporation as follows:
Employees of Life Ins. Weekly Hospitalization Surgical St. Marys Coverage Indemnity Benefits Kraft Corp. Coverageand dependency coverage on employees' families, the total annual premiums to defendant for such insurance being the sum of eleven thousand, seven hundred twenty-nine dollars and seventy-four cents ($11,729.74)." *Page 7625 Executives .. $3,000.00 $40.00 $5.00 $150.00
15 Foremen ... 2,000.00 21.00 4.00 150.00
208 Skilled Laborers .... 1,000.00 21.00 4.00 112.50
65 Unskilled Laborers .... 500.00 10.50 3.00 75.00
The defendant filed general and special demurrers, and contends that the petition as amended, construed most strongly against the plaintiff, does not set out a cause of action against the defendant. The trial judge overruled the demurrers, and the defendant excepted. 1. In his brief the plaintiff maintains that the petition shows that he was authorized to solicit the policy written by the defendant; that he did solicit the policy; that he was the procuring cause of the sale of the policy; and that the policy written originated from and was carried to a conclusion by the petitioner.
The plaintiff had no authority to make, alter, vary, or discharge any policy contract, but was a soliciting or special agent with authority to solicit applications for insurance and to offer all such applications to the company. He was an agent of the defendant company. Globe Rutgers Fire Insurance Co. v.Walker, 150 Ga. 163 (103 S.E. 407); Code, § 56-502. In the contract it is provided that the defendant will pay the plaintiff on premiums paid to the company as full compensation on policies issued on applications secured by or through the agent.
The only question for determination by this court is whether or not the petition is sufficient to resist a general demurrer. While considering the issues here involved, we shall bear in mind the rule that a general demurrer to the petition should not be sustained and the suit dismissed because the plaintiff would not be entitled to recover all he asks; if the petition sets up a good cause of action as to any portion of his demand, it is sufficient to resist a general demurrer. Douglas, Augusta c. Ry.Co. v. Swindle, 2 Ga. App. 550 (59 S.E. 600).
Assuming the allegations of the petition to be true, the plaintiff agent solicited an application for insurance he was authorized to solicit and submitted such application to the company. The defendant contends that under the contract it is obligated to pay the plaintiff only on policies issued on applications secured by or through the plaintiff. We do not construe the contract of employment in that manner. *Page 763
In entering upon the engagement it is not to be doubted that both parties expected that the act of the plaintiff in forwarding applications for insurance would be followed by bona fide action on the part of the defendant upon the risk. It is not to be supposed that either party to the contract contemplated that the company should be at liberty to reject the applications submitted by the plaintiff without cause. That the client of the plaintiff was a good risk is shown by the fact that the company issued the same policy to the client upon the solicitation of an insurance broker in another State. We are of the opinion that the plaintiff was entitled to have the application in question treated in good faith and seriously considered, in reference to its desirability as a risk to be assumed, from the standpoint of the interest of the company; in other words, he was entitled to action, not disregard or evasion.
The logical conclusion to be drawn from the pleadings is that the defendant did not act upon the application on its merits within the meaning of the contract. The plaintiff had performed all the conditions of the contract, and the defendant company could not arbitrarily refuse to insure the risk submitted on the application of the plaintiff without cause and immediately thereafter insure the same risk submitted on the application of another broker and pay the commissions for the solicitation of the insurance contract to the latter. Sporl v. New York Indemnity Co., 176 La. 363 (145 So. 771); Madden v. Equitable Life Assur. Soc. of the United States, 11 Misc. 540 (32 N. Y. Supp. 752); Lanowah Inv. Co. v. John Hancock Mut. Life Ins. Co., 236 Mo. 1062 (162 S.W.2d 307). The petition is sufficient to resist the general demurrer.
2. The defendant insists that the contract of employment does not authorize the plaintiff to solicit or receive commissions on the sale of group insurance. We recognize the fact that group insurance is not the same type or form as wholesale insurance. 44 C. J. S., Insurance, § 15, n. 81. In his petition the plaintiff alleged that he solicited wholesale insurance and group accident and sickness insurance with St. Marys Kraft Corporation; that St. Marys Kraft Corporation purchased from defendant the wholesale insurance contract; and that defendant with full and complete knowledge of plaintiff's solicitation of said wholesale insurance *Page 764 and group accident and sickness policy did accept the solicitation of the policy from an insurance broker of New York City.
Even if the plaintiff was not authorized to solicit applications for group insurance, he was authorized by the contract to solicit wholesale insurance, and, under the ruling in the preceding division, the plaintiff was entitled to have the company act on the merits of the application for wholesale insurance which he submitted.
3. The defendant also contends that the petition is subject to general demurrer for the reason that "the designation of a broker or agent by an insured for the purpose of throwing to such broker commissions on the writing of insurance coverage is a right which rests wholly with the insured and over which the insurance company (defendant) has no control." The defendant points out that the election by the insured to appoint or designate a particular broker through whom and through whom alone it will purchase its coverage renders the insurer free from any liability to other brokers or agents who might also have been working on the solicitation of the writing of the risk.
While there is authority for this view (Beidler and Brookmyerv. Universal Insurance Company, 134 Fed. 2d, 828; Clinchy v. Grandview Dairy, 283 N.Y. 39, 27 N.E.2d, 425), this is purely a defensive matter and can not be considered on general demurrer. The petition does not affirmatively disclose facts which would demand a conclusion that such was the reason for the refusal of the defendant to pay the plaintiff for the commissions alleged to have been earned.
The judge did not err in overruling the demurrers.
Judgment affirmed. Gardner and Townsend, JJ., concur.