Clubb v. American Accident Co.

Lumpkin, Justice. The principal and controlling legal questions involved in the present case are stated in the head-notes. We rest the correctness of our conclusions upon the reasoning of Mr. Justice Miller in the case of Insurance Co. v. Wilkinson, 80 U. S. 222. The whole subject relating to the responsibility of insurance companies for the acts of their soliciting agents is elaborately discussed in his opinion. We take from it the following extended extract, which is sufficient for bur present purpose: “It is not to be denied that the application [for an insurance policy], logically considered, is the work of the [512] assured, and if left to himself or to such assistance as he might select, the person so selected would be his agent, and he alone would be responsible. On the other hand, it' is well known, so well that no court would be justified in shutting its eyes to it, that insurance companies organized under the laws of one State and having in that State their principal business office, send these agents all over the land, with directions to solicit and procure applications for policies, furnishing’ them with printed arguments in favor of the value and necessity of life insurance, and of the special advantages of the corporation which the agent represents. They pay these agents large commissions on the premiums thus obtained, and the policies are delivered at their hands to the assured. The agents are stimulated by letters and instructions to activity in procuring contracts, and the party who is in this manner induced to take out a policy, rarely sees or knows anything about the company or its officers by whom it is issued, but looks to and relies upon the agent who has persuaded him to effect insurance as the full and complete representative of the conrpany, in all that is said or done in making the contract, lias he not a right to so regard him? It is quite true that the reports of judicial decisions are filled with the efforts of these companies, by their counsel, to establish that they can do all this and yet limit their responsibility for the acts of these agents to the simple receipt of the premium and delivery of the policy, the argument being that, as to all other acts of the agent, he is the agent of the assured. This proposition is not without support in some of the earlier decisions on the subject; and, at a time when insurance companies waited for parties to come to them to seek assurance, or to forward applications on their own motion, the doctrine had a reasonable foundation to rest upon. But to apply such a doctrine in its full force to the system of selling policies through agents, which we have described, would be a snare and a delusion, leading, as it has done in [513] numerous instances, to the grossest frauds, of which the insurance companies receive the benefits, and the parties supposing themselves insured are the victims. The tendency of modern decisions in this country is steadily in the opposite direction. The powers of the agent are, prima facie, coextensive with the business intrusted to his care, and will not be narrowed by limitations not communicated to the person with whom he deals. 'An insurance company, establishing a local agency, must be held responsible to the parties with whom they transact business, for the acts and declarations of the agent within the scope of his employment, as if they proceeded from the principal.” Those desiring to enter upon a further investigation of the subject with which we are now dealing may, with profit, consult the numerous authorities cited in the second note on pp. 324-328 of volume 11 of the Am. & Eng. Enc. of Law. In view of the law as we understand it, the plaintiff, under the evidence submitted, was entitled to a recovery, and the court erred in granting a'new trial. Judgment on main Mil of exceptions reversed. On cross-Mil affirmed.