## Facts

- James Jones was the Detroit agent for the Rutgers Fire-Insurance Company (Rutgers).
- On March 1, 1898, Jones signed a written five-year contract to act as Rutgers’s general agent for the state of Michigan.
- The contract required Jones to render monthly account statements and forward any balances due to Rutgers on a monthly basis.
- In September and October 1898, Jones heard rumors that Rutgers might be purchased or merged with the Globe Fire-Insurance Company (Globe).
- Beginning in October 1898, Jones stopped forwarding balances to Rutgers, though he continued to provide monthly statements reflecting what was owed.
- On December 20, 1898, Rutgers merged with Globe to form Globe & Rutgers Fire-Insurance Company (Globe & Rutgers).
- In March 1899, Jones learned the merger had occurred and ceased doing business under the Rutgers contract.
- In May 1899, Globe & Rutgers offered Jones a general agent position; Jones refused, testifying that he did not wish to work for the combined company because of Globe management’s reputation.
- Globe & Rutgers sued Jones to recover the balances he had not forwarded, plus interest, totaling about $1,106.
- The trial court ruled for Jones on the theory that Rutgers’s merger with Globe amounted to a breach of Jones’s employment/agency contract, allowing Jones to avoid liability for the withheld balances; Globe & Rutgers appealed.

## Issues

1. Whether Rutgers’s merger into Globe & Rutgers constituted a breach or termination of Jones’s five-year agency contract, such that Jones was excused from performing under the contract after the merger.
2. Whether the successor company formed by merger (Globe & Rutgers) could enforce Rutgers’s contractual right to receive the monthly balances Jones had collected and reported but did not remit.
3. Whether Jones could refuse to forward the collected balances based on his objection to the reputation or character of Globe’s prior management.

## Decision

- The Michigan Supreme Court reversed the judgment for Jones.
- The court held that the merger did not, by itself, breach or terminate the agency contract so as to excuse Jones’s performance.
- Globe & Rutgers, as successor by merger, could enforce the contract rights held by Rutgers, including the right to receive the balances Jones collected as agent.
- Jones remained liable for the unremitted amounts (with interest) shown by the account statements he continued to provide.
- The case was remanded for proceedings consistent with the Supreme Court’s ruling.

## Legal Principles

- A corporate merger generally carries existing contractual rights and duties to the successor corporation; the successor may sue to enforce obligations owed to the predecessor.
- An agency or employment contract with a corporation is not automatically ended or breached merely because the corporation merges with another entity.
- Dislike or distrust of new corporate management, without more, does not authorize an agent to keep money collected for the principal or to stop performing agreed accounting and remittance duties.
- Where an agent continues to account for premiums and balances collected, the agent’s failure to forward those balances remains actionable, and a merger does not supply a defense that wipes out the debt.

## Conclusion

Globe & Rutgers Fire-Insurance Co. v. Jones holds that an insurance company’s merger does not, standing alone, free an agent from a fixed-term agency contract or justify withholding collected balances; the successor corporation may enforce the predecessor’s rights to those funds, and the agent cannot treat objections to the merged company’s management as a legal excuse to retain money collected on the insurer’s behalf.


Globe & Rutgers Fire-Insurance Co. v. Jones, 89 N.W. 580 (1902)