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MALONE v. MELNICK (06/28/54)

June 28, 1954

MALONE
v.
MELNICK, APPELLANT



Appeal, No. 265, Jan. T., 1953, from judgment of Court of Common Pleas No. 4 of Philadelphia County, March T., 1949, No. 1137, in case of James F. Malone, Jr., Insurance Commissioner etc. v. Manuel Melnick, trading as Manuel Melnick and Company, and Interstate Insurance Service. Judgment reversed. Assumpsit. Before GUERIN, J., without a jury. Adjudication filed finding for plaintiff; exceptions to adjudication dismissed and judgment entered for plaintiff. Defendant appealed.

COUNSEL

Earl G. Harrison, with him Richard B. Malis, Malis, Malis & Malis and Schnader, Harrison, Segal & Lewis, for appellant.

William J. O'Brien, with him John A. Skelton, for appellee.

Before Stern, C.j., Stearne, Jones, Bell, Chidsey, Musmanno and Arnold, JJ.

Author: Jones

[ 378 Pa. Page 484]

OPINION BY MR. JUSTICE JONES

This appeal arose out of an action in assumpsit brought by the Insurance Commissioner of the Commonwealth, as the statutory liquidator of a dissolved insurance company, to recover from the company's general agent commissions alleged to have been wrongfully withheld by him. The trial judge, sitting without a jury, gave a verdict for the plaintiff, and the court en banc, after dismissing exceptions by the defendant to the adjudication, entered judgment on the verdict from which the defendant has appealed.

The single error assigned by the defendant is that the trial judge erred in excluding the defendant's offer of parol evidence to explain and vary minutes of certain of the company's corporate meeting, prior to the dissolution. The facts are not in dispute, counsel for the parties having entered into an agreed statement of the case in conformity with our Rule 41.

The insurance company, here involved, was incorporated under the laws of Pennsylvania in 1911 and, subject to a change in name in 1946, continued to do business until December, 1947, when it was dissolved by decree of court and its assets placed in the hands of the Insurance Commissioner as the statutory liquidator.

[ 378 Pa. Page 485]

By contract of August 11, 1934, the company had constituted the General Agency Company Inc., its exclusive agent for a period of thirty years from January 1, 1931. The agreement fixed the agent's commissions at varying rates of percentage on the premiums charged on policies. The 1934 contract was modified by a supplemental agreement in 1941 which recited certain burdens in the way of inspection of risks and commission allowances to local agents which it had become necessary for the general agent to perform or assume. In exchange for the general agent's undertaking to perform these services, the insurance company agreed to allow the general agent "an over-writing commission of ten per cent (10%) on the gross premiums of [Local Agents] where this concession must be made and an additional payment of five per cent (5%) of all gross premiums written in [the insurance company] to cover the expenses of inspection of risks, surveys and field service."

On June 4, 1946, the General Agency Company, as it was expressly permitted by the June, 1934, contract to do, assigned to Melnick, the present defendant and appellant, the exclusive agency contract of 1934 as supplemented by the agreement of 1941. On September 23, 1947, Melnick, who for some time had been a director of the insurance company, resigned his directorship, and, at the same time, the exclusive agency contract was terminated by mutual consent. In Melnick's settlement with the insurance company in October, 1947, he retained $16,461.90 as representing the over-writing commission of 10% on ...


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