Goldsmith v. Manufacturers' Liability Insurance

Pattison, J., delivered the opinion of the Court. The suit in this case was instituted by the appellants against the appellee company to recover compensation, in the nature of commissions, for their services in causing the workmen’s compensation insurance of the Gathman Ammunition Company to be placed with the defendant company. At the time the services were rendered the appellants were not agents of the defendant, nor were they licensed by the State of Maryland to* operate therein as insurance brokers; and the sole question presented by this appeal is whether the Court below erred in holding that the appellants, being unlicensed brokers, could not recover for their services so rendered. The statute (Sec. 219 of Art. 23 of the Code, Val. 3) provides that: “Any natural person, bona fide copartnership or corporation applying therefor as hereinafter set forth, and paying to the Insurance Commissioner the sum of one hundred dollars ($100.00) for the use of the State, and an additional sum of one dollar ($1.00) as a fee to the said commissioner for issuing said license, may obtain a license for carrying on the business of an ²⁸⁵ insurance broker, * * * .

Every application for a license under this section shall be addressed to the Insurance Commissioner in writing, shall set forth in full the name and address of each such applicant and the name and address of each person who proposes to act under the license issued as aforesaid to any copartnership or corporation, that each such applicant or person proposing to act under such license has not willfully violated any of the insurance laws of this State during the' past year and that he will not violate any such law during the term of license applied for if issued; that he has not dealt unjustly with or deceived any citizen of this State or misrepresented the conditions of any insurance policy or contract; whether or not he is indebted to any insurance company or general agent by virtue of any contract as former agent or broker; whether or not his license as insurance agent or broker has been declined or revoked in this or any other State for a violation of law; where and in what business engaged during the past year, and shall give full answers to the following questions: Do you understand that it is against the laws of this State (a) to act as broker for any company without license from this department; (b) to misrepresent the conditions of any policy contract; (c) to make any discrimination between citizens of this State in premiums, or in rebating any part of premiums or commissions, or to twist or attempt to twist policies by misrepresentation. Said application and declaration shall be signed by the person, a member of the co-partnership, or duly authorized officer of the corporation applying, as the case may be.” Section 220 of said Article provides that “any person who shall use or exercise the business or occupation of an insurance broker, without having procured a license therefor, as required by Secs. 218 and 219 of this Article, shall he subject to a penalty of five hundred dollars ($500.00) for each ²⁸⁶ offense”; and by Sec. 185 it is provided that no corporation, co-partnership or -individual “shall, directly or indirectly, pay, except to the lawful agent or solicitor of such company * * * or to an insurance broker, licensed by the State of Maryland, any commission, reward or rebate in consideration of procuring, or influencing others to procure, insurance from such company, association, individual or firm; * * * and any person violating any of the provisions of this section shall be subject to the fines (one hundred to one thousand dollars) imposed by Sec. 205 of this Article.” It is settled that where the contract which the plaintiff seeks to enforce is expressly or by implication forbidden by the statute, no Court will lend its assistance to- give it effect. Cope v. Rowlands, 2 M. & W. 149. By the great weight of authority, a contract entered into by an unlicensed person engaged in a trade, business or profession, required to be licensed, and made in the course of such trade, business or profession, can not be enforced by such person, if it appears that the license required by the statute is, in whole or in part, for the protection of the public, and to prevent improper persons from engaging in such trade, business or profession If, however, the purpose of the statute is to raise revenue only, his right to enforce such contract is not defeated by the want of a license.

Elliott on Contracts, Sec. 267; Cope v. Rowlands, supra; Randall v. Tuell, 89 Me. 443 , 38 L. R. A. 143; Black v. Security Mutual Life Association (Me.), 49 Atl. Rep. 51 ; Fairly v. Wappoo (S. C.), 22 S. E. 108 ; Stevenson v. Ewing (Tenn.), 9 S. W. 230 . It was said by Baron Parke in Cope v. Rowlands: “The question for us now to determine is, whether the enactment of the statute is meant merely to secure a revenue to the city, and for that purpose to render the person acting as a broker liable to a penalty, if he does not pay it? or whether one of its objects be the protection of the public, and the prevention of improper persons acting as brokers ? On the former ²⁸⁷ supposition, the contract with a broker for his brokerage is not prohibited by the statute; on the latter, it is.” The same doctrine is expressed in