Riley v. Commonwealth Mutual Fire Insurance

Mr. Justice Gordon delivered .the opinion of the court, October 5th, 1885. When McDonald, at the time of his application for insurance, paid the necessary premium to O’Conner, he, O’Conner, became his agent and depositee, and at any time before his acceptance of the policy he might have revoked his application, and demanded a return of his money; but after such acceptance he could do nothing of the kind. Thenceforth O’Conner was the depositee of the defendant, and there could be no rescission without its consent, for to all legal intents the contract of insurance was consummate and the premium belonged to the company as fully as though it were in its vaults. This policy, regularly executed and countersigned, was put into O’Conner’s hands by Crane, the defendant’s general agent, for delivery and receipt of the premium, and for no other purpose, and nothing is more certain than that from and after that delivery, the money in his possession belonged no longer to McDonald but to the defendant. If then, the company received the premium and McDonald the policy, we cannot understand why the plaintiff should not recover. The plea that Crane had no power to deliver the policy until the premium was actually paid into his hands, is so oxrt of all character that we cannot understand how it could have been effectually imposed on the court below. Crane had the power to issue policies and receive the money, and, as in this case, he exercised that power in a legitimate manner, and in the ordinary course of business, the company was bound by his acts. Had the money been deposited by Crane’s direction in a bank, or had he sent his clerk to deliver the policy and receive the premium, we apprehend no one would be found to say that the transaction would not have been binding on both parties. Why then might not O’Conner perform the same executive duties for the defendant or its agent? It is not complained that he did not act faithfully; that he did not retain the money for the company, or that he did not transmit it to the agent in the usual course of business. But as Crane did not receive it until after the loss, therefore, O’Conner’s agency in the matter, which would have been entirely regular had there been no loss, is to be pronounced void, and he is to be regarded as the depositee and brl&er of the decedent. On principle this treatment of the case cannot be allowed. The company ought to know how its agents are doing its business, and it certainly does know that they necessarily must do that business through the ordinary channels of- trade. When, therefore, companies of this kind [147] put it in tlie power of their agents to deliver tlieir policies to innocent parties, who have paid their money in good faith to persons appointed for that purpose by such agents, they are estopped from gainsaying the regularity of the method so adopted for the collection and transmission of their premiums, and all conditions found in such policies to the contrary are to no purpose. But we have so fully discussed this matter in the recent case of the Universal Fire Insurance Company v. Block, (13 Out. 535) that we need not dwell longer upon this subject. Wo have, therefore, but to add, that the attempt to sustain the judgment of tlie court below by the case of the Pottsville Fire Insurance Company v. Minnequa Springs Improvement Company, 4 Out., 137, is a failure. The two cases are as wide apart as the poles. In that case the policy passed from the hands of the agent through no less that three brokers before it reached the insured; he did not pay the premium until after he had received the policy, and the money was never paid to the company nor its agent, neither was it at any time within the power or control of either. More than this, the company refused tlie risk, and the agent, in vain, endeavored to recall the policy. It will thus be seen that the two cases are entirely dissimilar, and the one cannot, by any ingenuity, be made to govern the other. The judgment of the court below is now reversed and a new venire ordered.