Foscue v. Greensboro Mutual Life Insurance Co.

BROGDEN; J. The question is this: Has a soliciting or collecting agent of an insurance company the authority to waive the payment of premiums provided in a policy of insurance or extend the time of payment thereof ? The trial'judge charged the jury:, “Now, I charge you as a matter of law, and I quote to you from an opinion of the Supreme Court, where it says in the case, of Moore v. Accident Insurance Corp., reported in 173 N. C., 532: ‘It is abundantly settled that an insurance company will be estopped to insist upon a forfeiture .if by any agreement, either express or implied, by the¡course of its conduct itTéaves the insured honestly to believe that the insurance assessments will he received after the api pointed dfiy.’ ”, , I charge you. this, gentlemen of the jury: “That the agent of the company who has the authority from the company to solicit and’ to write policies of insurance, and.to receive the premiums thereon,' is the ¡agent, for all purposes in making contracts governing tjbp policy, and'that if the 'agent of the company promised and agreed with John Eoscue fh,at he would carry him until the next pay day in consideration of his taking oút another policy of insurance, and that John Foscue relied upon that promise, thinking his policy 'was in force, .then the company would, be liable,, gentlemen, and it would not have lapsed. In other words, the company would have been responsible for. the apts of its agent.” . ... ... During the course of the judge’s charge one of the jurors asked the judge if an agent could bind the company by a contract with the insured to carry over the premium, and .the judge answered, “Yes;” To these instructions the defendant excepted,- In Graham v. Ins. Co., 176 N. C., 313, 97 S. E., 6, this Court said: “The plaintiff has failed to show any authority upon part of Mrs. Wall to make the guarantees claimed.” As is said by Ruffin, J., in Biggs v. Ins. Co., 88 N. C., 141: “Where ono deals-with, an agent it behooves him to ascertain correctly the extent of his authority and power to contract. *141 Under any other rule every principal would be at the mercy of his agent, however careful he might limit his authority.” The authority of an agent with limited power to waive the terms and conditions of written policies of insurance in the absence of fraud or mistake or other compelling equitable principle is ordinarily restricted to negotiations connected with the inception of the contract and not to provisions of a written contract which has already taken effect and been in force for a period of time. Thus in Johnson v. Ins. Co., 172 N. C., 142, 90 S. E., 124, it is declared: “The restrictions inserted in the contract upon the power of the agent to waive any condition unless done in a particular manner cannot be deemed to apply to those conditions which relate to the inception of the contract when it appears that the agent has delivered it and received the premiums with full knowledge of the actual situation. The principle is not a new one, and has not been shaken by any decisions of our Court since the adoption of the standard policy.” It is undoubtedly the law that the courts do not favor forfeitures and that they will liberally construe in favor of the insured, acts or circumstances indicating an election to waive forfeitures or agreements to waive them, particularly when the insured has relied and acted upon such waiver. But the vital question is, -“How can these provisions be waived and by whom?” The decisions are to the effect that a waiver may be established by the following methods: (1) Express agreement; (2) conduct or course of dealing; (8) ratification. Moore v. Accident Assurance Corp., 173 N. C., 532, 92 S. E., 362; Graham v. Ins. Co., 176 N. C., 313, 97 S. E., 6; Paul v. Ins. Co., 183 N. C., 159, 110 S. E., 847; Dawson v. Ins. Co., 192 N. C., 312, 135 S. E., 34; Arrington v. Ins. Co., 193 N. C., 344, 137 S. E., 137; Turlington v. Ins. Co., 193 N. C., 481, 137 S. E., 422. The principle is clearly expressed in an opinion'written by Allen, J., in Gazzam v. Ins. Co., 155 N. C., 330, 71 S. E., 434, as follows: “Now, as heretofore, it is competent for the parties to a contract of insurance, by agreement in writing or by parol, to modify the contract after the policy has been issued, or to waive conditions or forfeitures. The power of agents, as expressed in the policy, may be enlarged by usage of the company, its course of business, or by its consent, express or implied. The principle that courts lean against forfeitures is unimpaired, and in weighing evidence tending to show'a waiver of conditions or forfeitures the court may take into consideration the nature of.the particular condition in question, whether a condition precedent to any liability, or one relating to the remedy' merely, after a loss has been incurred. But where the restrictions upon an agent’s authority appear in the policy, and there is no evidence tending to show that his powers have been enlarged, there seems to be no good reason why the authority expressed should not be regarded as. the measure of his power'; nor is *142 there any reason why courts should refuse to enforce forfeitures plainly incurred, which have not been expressly or impliedly waived by the company.” Applying these principles • of law to the facts disclosed by the record, we find no evidence tending to show that the agent had either express or implied authority to waive the conditions plainly expressed in the policy; neither was there evidence of any course of dealing which would warrant an inference of a waiver. The policy by its terms allowed or permitted a grace period of ten days for the payment of premiums, and the evidence discloses without contradiction that all premiums were paid within such period, and that no part of the premium for the month of August had been paid. So far as the evidence discloses the agent was not an officer, of the defendant company and was merely a local agent for selling insurance and collecting premiums. The following utterance of Connor, J., in Turlington v. Ins. Co., supra, is pertinent to this aspect of the case: “All persons dealing with an agent do so with notice of this salutary principle of the law of principal and agent, which is too well established to require citation of authorities.” Bullard v. Ins. Co., 189 N. C., 34, 126 S. E., 179; Hardin v. Ins. Co., 189 N. C., 423, 127 S. E., 353; Smith v. Ins. Co., 193 N. C., 446, 137 S. E., 310. Under these facts the exceptions of the defendant to the instructions given by the trial judge to the jury are sustained. Error.