Keesler v. Mutual Benefit Life Insurance

AlleN, J. The contract of insurance on which the plaintiff sues was made in the State of Georgia where the insured lived and died, and “It is settled that ‘Matters bearing upon the execution, interpretation, and validity of a contract are determined by the law of the place where it is made.’ Scudder v. Nat. Union Bank, 19 U. S., 406.” Cannady v. R. R., 143 N. C., 442. See, to the same effect, Satterthwaite v. Doughty, 44 N. C., 314; 12 C. J., 448; 5 R. C. L., 931. ¥e must then inquire into the laws of our sister State, and the rule prevailing with us is that “The existence of a foreign law is a fact. The court cannot judicially know it, and therefore it must be proved; and the proof, like all other, necessarily goes to the jury. But when established, the meaning of the law, its construction and effect, is the province of the court.” State v. Jackson, 13 N. C., 566. “The court is presumed to know judicially the public laws of our State, while in respect to private laws, and the laws of other States and foreign countries, this knowledge is not presumed; it follows that the existence of the latter must be alleged and proved as facts, for otherwise the court cannot know or take notice of them. This is familiar learning. 3 'W'ooddeson’s Lee., 175. . . . “If the law be written, and its existence is properly authenticated, the court, availing itself of the aid of the judicial decisions of the country, puts a construction on it, and explains its meaning and legal effect, and the jury have nothing to do with it save to follow the instructions of the court as if it was our own law. If the law is unwritten, and its existence is presumed or admitted, then the jury have nothing to do with it. . . . “But if the existence of an unwritten law of another State or foreign country is not presumed or admitted, then its existence must be proved by competent witnesses, and the jury must then pass on the credibility of the witnesses, and it is the province of the court to inform the jury as to the construction, meaning, and legal effect of the law, supposing *398 its existence to be proven; and to this end the court should avail itself of the judicial decisions of the State or country.” To prove the fact, that is, the existence of the law, the decisions of the highest appellate court of Georgia, a statute of that State, and the opinion of Mr. Shephard Bryan, a distinguished lawyer of Atlanta, used as a deposition by consent, were introduced in evidence, and as none of these sources are impeached, it becomes for us a question of construction and interpretation. In Reese v. Fidelity Mutual Life Ins. Co., 111 Ga., 482, the question now presented was decided in favor of the contention of the defendant on facts almost identical with those in the present record. In that case there was provision in the application and the policy that the policy should not take effect vurless the first jtremium was paid and the policy delivered during the continuance in good health of the insured, and in both the application and policy there was the limitation on the authority of the agent as to waiver, and it was held that there was no liability on the insurance company because the policy was delivered when the insured was not in good health although the agent knew of his physical condition. In the Reese case, after discussing two Georgia cases, the Court said: “There was no pretense in either of those cases that the authority to make the waiver had been expressly withheld from the agent as was done both in the application and in the policy in the case at bar. Under the express terms of the agreement in this case the agents had no authority to make such waiver, The policy declared that No agent of the association has any power to make, alter, or discharge contracts, waive forfeitures, or grant credit; and no alteration of the terms of this contract shall be valid, and no forfeiture hereunder shall be waived, unless such alteration or waiver be in writing and be signed by the president of the association’; and the application contained substantially the same provision. More distinct and unequivocal language could hardly have been used to express the mutual understanding of the parties to the contract. The applicant was an intelligent business man; he signed the application; and in the absence of any want of opportunity to read it, or of any suggestion of fraud practiced upon him, it must be conclusively presumed that he fully understood the entire transaction. “It is a familiar rule that a principal may limit the power of his agent, ■even within the apparent scope of his authority, so that the agent cannot, in violation of the restriction, bind his principal when dealing with one who has no.tice of the limitation. Here the applicant expressly agreed in writing that no agent of the association should have authority to grant credit and no alteration of the contract of insurance should *399 be valid unless in writing and signed by tbe president of the association, and there was no pretense that the president ever signed such writing. If in violation of these specific provisions of the contract it were held that the agent of the association could vary the terms and grant credit for the first premium, instead of requiring its payment in cash, then must we subscribe to the rule, which seems to be supported by some adjudicated cases, that an insurance agent, unlike all other agents, may bind his principal, although acting contrary to express instructions and dealing with one who has full knowledge of the limitations of his authority. The soundness of such a doctrine does not commend itself to our minds. It must not be thought that the established rules of the law of agency do not apply to the transactions of life insurance companies. There is no particular sanctity about the business of life or any other kind of insurance. The companies engaged in it have the right to employ agents and give to them such authority as they please. Whatever limitations are imposed upon such agents, if communicated to those 'dealing with them, will be binding, and if this authority be exceeded, the act will not bind the principal.” The Iieese case was affirmed, without comment, in Ins. Co. v. Clancy, 111 Ga., 865, and in Mutual Reserve Asso. v. Stephens, 115 Ga., 194, and Johnson v. Ins. Co., 123 Ga., 406, the Court saying in the Stephens case: “This case falls squarely within the decision rendered by this Court in Reese v. Fidelity Asso., 111 Ga., 482, which was followed in Mutual Life Ins. Co. of Ky. v. Clancy, id., 865,” and holding according, and in the Johnson case: “In the Reese, Clancy, and Stephens cases, which were actions on policies of life insurance, the waiver sought to be set up was as to a provision that the policy should not become binding upon the company until the first premium had been paid during the good health of the insured. Unquestionably, as to a matter concerning the time when the contract is to become of force, or as to the waiver of the conditions of the policy subsequently to its issuance, the insured, by accepting the policy, would be bound by its terms, and could not set up a waiver which he was bound to know the company’s agent had no power to make.” If, therefore, the Reese case represents the law of Georgia correctly it is decisive of the controversy between the plaintiff and the defendant, but it is insisted by the plaintiff that it has been overruled by the subsequent case of Few v. Knights of Pythias, which was before the Supreme Court of Georgia three times, and is reported in 136 Ga., 181; 138 Ga., 719; 142 Ga., 240, in which it was held that a condition in a policy, rendering it void if the first premium was paid and the policy delivered when the insured was not in good health, was waived by the receipt of the premium and delivery of the policy by an agent who knew of the *400 condition of the insured, notwithstanding the limitations on the power of the agent contained in the policy. The two cases are not necessarily in conflict as in the Reese case, like-ours; the provision in regard to the payment of the first premium and the delivery of the policy during the continuance in good health, and the limitation on the authority of the agent, were in the application as well as in the policy, while in the Few case they were in the policy alone, and being in the application, which was preliminary to the contract of insurance and a negotiation for it, the parties could agree upon the conditions which must exist before the policy would be in force, and at the time the policy was delivered the insured knew he was dealing with an agent of limited authority, who could not waive the condition as to good health. If, however, there is an irreconcilable conflict the Reese case is still authoritative under the laws of Georgia. In the first place it was reaffirmed in 1916, after the last appeal in the Few case, in Williams v. Ins. Co., 146 Ga., 245, in the following-language: “The instant case is not identical in its facts with the case of Reese v. Fidelity Mutual Life Ins. Co., 111 Ga., 482 (36 S. E. R., 637), but upon the controlling questions it is very similar, and we are of the opinion that the ruling there made is controlling here. The reasoning upon which this rule is based, and which is entirely applicable to the facts of the present case,. is sound and supported by the authorities adduced to support the conclusions reached.” ■ Again, the Reese case was by a unanimous decision in 1900, and it is not referred to in either appeal in the Few case, and it is provided by the Georgia Code, sec. 6207, that “Unanimous decisions rendered after said date (1 January, 1897) by a full bench of six shall not be overruled or materially modified except with the concurrence of six Justices, and then after argument had, in which the decision, by permission of the Court, is expressly questioned and reviewed; and after such argument the Court in its decision shall state distinctly whether it affirms,, reverses, or changes such decision.” This statute has been upheld in Shephard v. Bridgers, 137 Ga., 624, where the Court, after referring to two cases, says: “The decision in these two cases have never been reversed or formally modified, though, in some decisions the cases under consideration were distinguished from those cited above. If there should be an irreconcilable conflict between them and some later decision, without any overruling or changing of the earlier decisions, under our statute the older decision would stand. Civil Code (1910), sec. 6207.” *401 We are therefore of opinion that the plaintiff cannot recover, and that bis Honor committed no error in bis instruction ón tbe seventh issue. No error.