Merserau v. . Ph&338nix Mutual Life Ins. Co.

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 276 By the terms of the policy the liability of the insurers ceased upon the failure of the insured to pay the renewal premiums at the office of the company at Hartford, or to an agent of the company, on his producing a receipt signed by the president or secretary on or before the days at which they were payable. The premium which became due in August, 1871, was not paid at or before the day, nor has it been paid since. The policy was therefore of no force at the time of the death of the insured, and the insurers are not now liable upon it unless the condition was waived by the company or by an authorized agent. It is not claimed that the company has, by the action of its board of managers, or by its executive or any of its officers, varied the condition *Page 278 referred to. If its performance has been dispensed with and the policy continued in force notwithstanding the default in the payment, it has been by the act and agency of Weller, the local agent of the insurers at Hudson. A lax idea seems to prevail, and certainly is persistently urged upon this appeal, that an agent for an insurance company, representing it and transacting business for it at a distance from its principal place of business, is, and must necessarily be a general agent, with full authority to bind his principals in all matters within the territorial bounds of his agency, and it is sought to render void the most solemn and important stipulations of the contract upon this theory. There is no countenance for the doctrine in any well-considered case. Agents of underwriters, at a distance from their principals, are either general or special agents, possessing plenary or limited powers, depending upon the terms of the grant of power or the powers exercised with the assent of the principals; and the extent of their authority is to be determined by the same rules that control in respect to other agencies. The rule is well expressed in Insurance Company v.Wilkinson (13 Wall., 222) and Miller v. The Phœnix InsuranceCompany (27 Iowa 203). Insurance companies doing business by agencies at a distance from their principal place of business, are responsible for the acts of the agent, within the general scope of the business intrusted to his care, and no limitations of his authority will be binding on parties with whom he deals which are not brought to their knowledge. It is upon and within this general principle that insurance companies have been held bound by the acts of their agents in dispensing with or varying the terms and conditions of their policies of insurance. (Insurance Company v. Colt, 20 Wall., 560; Bodine v. Exchange Fire Ins. Co., 51 N.Y., 117; Owen v. Farmers' Joint Stock Ins. Co., 57 Barb,, 519; Carroll v.Charter Oak Ins. Co., 10 Abb. [N.S.], 166; Sheldon v.Atlantie Fire and Marine Ins. Co., 26 N.Y., 460.) The actual authority of Weller for the defendant corporation *Page 279 was to solicit insurance, receive and forward applications to the general managers at Albany, and on receipt of the policy to deliver it and collect the premiums, and to collect the renewal premiums when in possession of the receipt of the company, and upon the delivery of the same to the insured. The insured had no reason to suppose, from any dealings with the agent or his transactions with others, that his powers were other or different from those specified. By a notice upon the policy, the authority of the agent in respect to the semi-annual renewal premiums was emphatically and distinctly limited, and he was only authorized to receive them upon previously and regularly signed receipts from the president or secretary. He required a special authority to collect and receive each renewal premium as the same should become payable. His agency in respect to the policy absolutely ceased upon its delivery, and the power was to be renewed and the renewal evidenced by the possession of the specified receipt before he could perform any act on behalf of the company in respect to subsequent payments. The insured had knowledge of this limitation and was estopped from claiming in hostility to it. The precise point was decided by the Court of Errors and Appeals of New Jersey in Catoir v. American Life Insurance and TrustCompany (33 N.J., 487), in which Judge BEDLE, in a well considered opinion, concurred in by the court, asserts, in support of the judgment, the very reasonable doctrine, which is consistent with all the cases, that when the policy itself contains an express limitation upon the power of agents, an agent has no legal right to contract as agent of the company, with the party to whom the policy has been issued, so as to change the terms of the policy or to dispense with the performance of any part of the consideration, either by parol or in writing; and such party is estopped, by accepting the policy, from setting up powers in the agent, at the time, in opposition to limitations and conditions in the policy. These limitations are presumed to continue. In the face of a distinct written expression in the policy of a want of power in the agent, the party suing to recover upon such policy, *Page 280 has no right to infer the subsequent existence of such power by any uncertain signs. There must be evidence to justify the belief that the company, by direct authority, enlarged the powers of the agent, or that they knowingly permitted him to act for them beyond the scope of the powers originally conferred. In that, as in this case, the authority of the agent to receive payment of the renewal premiums was limited by the statement that the payment was not to be valid except upon the presentation of a receipt under the seal of the company. There was evidence in that case of the possession of the receipt by the agent and tending to show that he gave credit for or received the payment of the renewal premium at the day, and the act was held ultra vires and not obligatory upon the corporation. See also, to the same effect, Bouton v. American Mutual Life Insurance Company (25 Conn., 542). Unless we are prepared to hold that insurance companies cannot restrict the authority of their agents and that conditions imposing restrictions and limitations upon their powers, and communicated to those to whom policies are issued, are meaningless and but waste paper and may be utterly disregarded, there was no waiver of the condition in this case and the policy expired upon the failure of the insured to pay at the day. This conclusion renders it unnecessary to consider the very serious question whether, upon the most favorable construction of the evidence, there was any waiver or attempt at a waiver of the conditions. The judgment must be reversed and a new trial granted.