Cullinan v. . Bowker

Gray, J. The salient facts in this case are that the bond, which the county treasurer accepted, was an incomplete instrument, for the want of the signature of the company’s representative at Malone; that the company’s representative had never parsed upon Bowker’s application for the company to become surety for him; that the county treasurer was aware of these facts, at the time the bond was offered and that the company never had knowledge of the delivery of its obligation in an incomplete form and without the exercise of its agent’s judgment upon the application. The appellant’s claim is that the powers of Channel], the company’s resident agent, were unlimited and that he could “.waive the provision in the bond which required his name to be signed thereto.” Undoubtedly, Channell possessed a wide and general authority to bind the company, by issuing its bonds to secure the grant of liquor tax certificates to applicants ; but I know’ of no principle of the law of agency, and I am not aware of any authority in the reports, which will sustain the doctrine now contended for by the appellant, in all its length and breadth. In order to do so, we' should have to *97 hold that, though Channell was appointed the company’s agent for a particular class of business, wherein the assumption of an obligation was to be through his own act and evidenced by his own signature, he might, nevertheless, waive the exercise of his judgment and delegate to another the performance of the duty confided to him. The powers of a general agent extend to the doing of all acts connected with the business of his principal and his authority will be deemed to include all usual means for the effective performance of his duties; in the employment of clerks, or of subordinate agencies, for the performance of acts where an exercise of the agent’s judgment, or discretion, is not demanded,, nor presumed. Reference is made by the appellant to decisions in cases arising upon contracts of insurance and they furnish many illustrations of the extreme lengths to which the courts have gone in enforcing the liability of insurance companies, upon obligations created for them by their agents with an apparent disregard of the conditions imposed upon the exercise of their powers. However far those decisions have gone, in this court, certainly, I think I am safe in observing that there has steadily been an observance of this qualification, that, if the limitations upon the agent’s authority to act are known to the person with whom he is dealing, or if the transaction is such as to charge him with the duty of inquiring into the extent of the agent’s authority to do the particular act, the principal will be protected, if the act be unauthorized, or in clear excess of the agent’s powers, and if the principal be an innocent actor in the transaction. The general rule, with respect to the powers of a general agent, was stated by the Supreme Court of the United States in Insurance Company v. Wilkinson, (13 Wall. 222), in this language, that “ they are, prima faeie, co-extensive with the business entrusted to his care, and will not be narrowed by limitations not communicated to the person with whom he deals.” This statement of the rule has received the indorsement of this court in Pechner v. Phœnix Ins. Co., (65 N. Y. 195, 209); Marvin v. Universal L. Ins. Co., (85 ib. 278 *98 283), and Walsh v. Hartford F. Ins. Co., (73 ib. 5). In the latter case it was said that “ if a person dealing with an agent knows that he is acting under a circumscribed and limited authority, and that his act is in excess of, or an abuse of the authority actually conferred, then, manifestly, the principal is not bound, and it is immaterial whether the agent is a general, or a special one. The principal has the unqualified right, as between himself and the agent, to define and limit the agent’s authority.” Quinlan v. Providence W. Ins. Co. (133 N. Y. 356), more recently, re-asserted the same doctrine. In that case it may be noted, it was held, where a policy of insurance prescribed that the company should not be bound unless the execution of the agent’s power was indorsed in writing upon the .policy, that “ the condition is of the essence of the authority, and the consent, or act, of the agent not so indorsed is void.” Broad as may be the authority of corporate agents to waive conditions, which enter into the validity of a contract of insurance at its inception, however appearing in the policy when delivered, (Berry v. American C. Ins. Co., 132 N. Y. 49, 58), I think that the present case is not within the operation of any such rule. It is a case where the extent of the agent’s authority to bind the principal at all was made known to the party with whom he was dealing, and where the principal had the right to rely upon the fact for its protection. The instrument, by which the Ætna Company constituted Channell its agent, authorized him “ to execute and deliver and attach the seal of the company to any and all bonds to be filed, * * * under the provisions of the Liquor Tax Law of the State,” etc., and this implies, plainly, that he was. intrusted with a duty which, necessarily, involved the exercise, on his part, of judgment before executing and delivering the bonds of the company, which were deposited with him for the purpose. The bonds, themselves, were explicit in declaring that they “ shall bind said surety company only when signed by F. S. Channell, its lawful resident assistant secretary at Malone, N. Y., county of Franklin, N. Y., whose certificate of authority is duly filed with the officer authorized to issue liquor tax certificates,” etc. The county *99 treasurer, who was that officer and who, as such, was to approve of the bond accompanying the application for a certificate, had full knowledge' upon the subject of the agent’s powers. Indeed, when notified of Channell’s absence by his clerk, he was willing to accept the bond, upon the representation of the clerk that Ohannell would sign it when he returned. Therefore, he took the risk that the obligation might never become binding upon the surety company. Whatever we might assume with respect to the general powers of Ohannell to bind his principal, he was not authorized to delegate to another the exercise of the power to decide upon an application and upon the character of the applicant in such cases. He might authorize his clerk to do a great many things, in the ordinary course of the business of the agency, which, possibly, by reason of its magnitude, he might be incapacitated from doing personally, or which were more or less mechanical, or mere matters of detail; but the purpose for' which his agency was constituted was that his judgment, or discretion, should be exercised in issuing the bonds. To that extent, the authority was personal. He could not delegate to his clerk the power to pass upon the application for the company to become a surety; any more than, in the case of Commercial Bank v. Norton, (1 Hill, 501), to which the appellant refers, the general agent was deemed capable of delegating to a clerk the power, generally, to bind the partnership by an acceptance of commercial paper. In that case, the agent had passed upon the question of accepting the bill and he merely directed the bookkeeper of the firm to write the acceptance. That was a mechanical act. In the present case, what Ohannell did, prior to -his departure, was to authorize his clerk to “issue a bond to any one who makes application ” and to say that he would sign it upon liis return. That was, obviously, the delegation of a particular power, with the exercise of which the agent was personally intrusted. He never passed upon the application in question and the company could not be deprived of the benefit of the exercise of his judgment in the matter, for which it had stipulated. *100 For these reasons, I advise that the order appealed from should be affirmed and that judgment absolute should be rendered against the plaintiff, pursuant to the stipulation'.