Cotton States Life Insurance v. Scurry

Trippe, Judge. Each of the applications, the one made by Scurry as well as the one by his wife, contains the statement that “ only the home officers of the company in Macon, Georgia, have authority to determine whether or not a policy shall issue on application.” Both of these applications were signed by the applicants respectively. The receipt given by the agent recited that it was binding on the company until the policy was received. Defendant in error insists that this bound the company to issue the policy. The question, therefore, is not what force the receipt had to the time of action on the application by the company; for the application was rejected, a policy refused, and notice thereof given to the applicant. Did the company have the right to reject the application under the terms stated in it, and the terms of the receipt ? If a party sign a paper, the presumption of law is that he knows the contract, and of course that he has notice of the facts recited in it. The application in this case contained that which, in its legal effect and substance, was, that an agent did not have power to issue a policy or to determine and bind the company that one should be issued. It was “ only the home officers of the company at Macon, Georgia, have authority to determine whether or not a policy shall issue.” Even had the receipt [52] stipulated, in terms, that the applicant should have a policy, it would have been in the teeth of the denial of such power to him, and with notice of such express denial to the person thus contracting with the agent. A principal is not bound by the acts of his agent when those acts are beyond the scope of his authority, and the person dealing has notice thereof: New Code, sections 2184, 2194, 2196. This rule, we think, determines this case, without discussing the principles touching the powers, generally, of agents of insurance companies, of general agents, and special agents, agents to issue policies and agents to receive applications, and how those powers have been, in many decisions and by elementary writers, held to apply differently in cases of. fire and life insurances. It has been asserted by an able writer, supported by the authority of several judicial decisions, that “ the usage is so general that an agent of a life insurance company has no authority to conclude an agreement for insurance, that if such authority is claimed in a particular case there should be affirmative evidence of such authority, or of its repeated exercise with the knowledge of the company : ” Bliss on Insurance, section 280. Where the authority claimed is expressly denied, and the person dealing with the agent has notice, there can be no question that the principal is not bound. If the agent had no power to bind the company to issue a policy, the fact that the applicant, knowing the want of such power, gave a note for the first annual premium to the agent, cannot alter the case: St. Louis Mutual Life Insurance Company vs. Kennedy, 4 Bush., 450. In that case it was held that the note was a memorandum only and not a waiver of a condition precedent. To hold that a note thus given enlarges the powers of the agent and conferred upon him authority expressly withheld by the company, would make the agent and a third person thus dealing with him, the arbiters of what an agent’s powers shall be. It may be proper to add that this action was not founded on the policy for $5,000 00, which was issued subsequent to the rejection of the application for $10,000 00, and notice of which was given to the applicant. [53] The charge of the Court being in conflict with what we doubt not is the law as above stated, the judgment refusing a new trial is reversed.