Green v. Star Fire Insurance

Sheldon, J. The first and most important question raised by these exceptions is as to the authority of Madden, the defendant’s Boston agent. He was apparently appointed by Mitchell and Tyler, the managers of the defendant’s eastern department; or rather it would be more correct to say that he is stated by Mitchell and Tyler in their letter to the insurance commissioner to be ah agent of the company in this State, without any express limitation being stated to exist upon his authority, and without any statement being made of the nature or extent of that authority. If we refer to the previous communication made to the insurance commissioner by the defendant, which appears to contain the authority under which Mitchell and Tyler acted, we find that the defendant there states that it has given to them authority “ to appoint agents ” in this Commonwealth, and “ requests . . . the insurance commissioner ... to issue agents’ licenses to ” their appointees, and agrees “ to be bound by such actions of said managers the same as if they had been done by the officers of said company.” The defendant is a Kentucky corporation, though authorized and wishing to do business in this Commonwealth. It is the case, then, of a foreign principal’s appointing an agent without any statement of what his authority is, without any apparent limitation of that authority, to conduct a business which is under [595] the close supervision of a special department of our executive government. R. L. c. 118. Stuart v. Reliance Ins. Co. 179 Mass. 484. Here, as in that case, there is nothing to show that Madden’s authority was a limited one. Moreover, it is to be borne in mind that with these facts appearing the defendant did not see fit to offer evidence that any actual limitations ever had been in fact imposed on Madden’s general authority. It seems to us that under such circumstances the judge before whom this case was tried without a jury had at least a right to find that Madden was not a mere special agent of the defendant with no other powers than those proved to have been expressly given; but that he possessed a broad and general authority, sufficiently large at any rate to warrant the finding which the judge has made as to the binding force of his actions upon the defendant. He was not, as in Lohnes v. Insurance Co. of North America, 121 Mass. 439, one who merely could receive applications, take risks and settle rates of premiums, and issue policies for the defendant. He was their agent, apparently without restriction, to transact the business, which would include not only the acceptance of risks, but the adjustment and settlement of losses. Eastern Railroad v. Relief Ins. Co. 98 Mass. 420. As in the case last cited, he well might have been found to be the defendant’s agent for the purpose of doing its general business in this State. Apparently he was the only man with whom the defendant’s customers in this Commonwealth dealt or were expected to deal. He was not a mere broker to forward applications, as in Commonwealth Ins. Co. v. Fairbank Canning Co. 173 Mass. 161. See Wheeler v. Watertown Ins. Co. 131 Mass. 1. The limits of his authority had not been defined by any enumeration of the powers which were given to him, as in Hill v. Commercial Union Assur. Co. 164 Mass. 406; Parker v. Rochester German Ins. Co. 162 Mass. 479; Kyte v. Commercial Union Assur. Co. 144 Mass. 43; and Harrison v. City Ins. Co. 9 Allen, 231, relied on by the defendant. It is elementary law that private instructions limiting the authority of a general agent cannot bind one who deals with him without knowledge of them. Brown v. Franklin Ins. Co. 165 Mass. 565. Madden’s authority must be determined by the nature of his business and the apparent scope of his employment [596] therein. It cannot be narrowed by private or undisclosed instructions unless there “ is something in the nature of the business or the circumstances of the case to indicate that the agent is acting under special instructions or limited powers.” Markey v. Mutual Benefit Ins. Co. 108 Mass. 78, 93, quoted in Brown v. Franklin Ins. Co., ubi supra. But the defendant argues that because Madden informed Holden, the insurance broker through whom the plaintiff’s insurance was obtained, of the substance of this letter, the plaintiff was chargeable with notice of the actual limitation imposed on Madden’s authority by this letter. The contention is that Holden’s agency continued until its purpose was accomplished, that is, until the final contract of insurance was effected and the written policy delivered, and that knowledge of the agent gained during the continuance of the agency is imputed to his principal. It may be conceded that this language .is generally accurate. But we think that it well might be found here that Holden’s agency had in fact come to an end when Madden received and countersigned this policy some days before the letter in question was written; that Madden then gave it to his clerk to be delivered as it was in fact subsequently delivered to the plaintiff, and that the purpose of Holden’s agency was then accomplished and his work finished. Jones v. New York Ins. Co. 168 Mass. 245. Wheeler v. Watertown Ins. Co. 131 Mass. 1. The agreement had been made, the policy prepared and countersigned, and the delivery was to be made to the plaintiff directly. The business was not all transacted between Madden and Holden, and there was nothing to indicate that the delivery of the policy was to be made to Holden, in which case the authorities cited by the defendant would have been applicable. We think that this notice was really given after his agency had been ended, as Madden knew, and cannot be regarded as notice to the plaintiff. In our view it is not material to the decision of this case whether this policy did or did not become operative before the twenty-eighth day of July, 1904, when it actually was delivered to the plaintiff. After such delivery at any rate the defendant’s right to cancel the policy depended by its terms upon the giving of a written notice to the insured and the tender to him of a rata [597] ble proportion of the premium; and there is no contention that either of these conditions was complied with. R. L. c. 118, § 60, standard form of policy. Massasoit Steam Mills v. Western Assur. Co. 125 Mass. 110. Nor does it appear that Madden had no authority to insure or to deliver the policy without payment of the full premium; and there was evidence to warrant a finding that he waived payment of the total amount of the premium in cash, and delivered the policy upon the promise of the plaintiff to pay the balance of the premium in future. Jones v. New York Ins. Co. 168 Mass, 245, 248, and cases there cited. There is no provision in the policy making actual payment of the premium in cash a condition precedent to the issuing or the taking effect of the policy, as in Dunham v. Morse, 158 Mass. 132, 134; and decisions made upon such a policy have no bearing on this case. Whether the defendant is not now entitled to credit for the remaining one half part of the premium is not before us on these exceptions; nor does it appear that such credit was not in fact given to it. We are of opinion accordingly that the judge rightly found that the plaintiff held a policy which was properly executed and was binding upon the defendant at the time of the fire; and the defendant’s exceptions bearing upon this question must be overruled. The defendant further contends that the conditions precedent to any right of action upon this policy were not shown to have been performed by the plaintiff, first, on the ground that there was no due rendering of a proof of loss to the company, and secondly that there was no reference to arbitrators as to the amount of the loss. But both of these contentions really are disposed of by what we already have said as to the authority of Madden, and may be briefly dealt with. Madden’s authority was, as we have heretofore shown, “to conduct the business of fire insurance ” in this Commonwealth for the defendant, a foreign corporation. An essential part of that business was to receive proofs of loss, to adjust any losses or cause them to be adjusted, and to agree upon the amount of such losses or, in the absence of such agreement, to act in having that amount fixed by arbitration, as provided by the terms of the policy. The evidence was that he selected the adjuster; [598] that the adjuster and the plaintiff agreed upon the amount of the loss, and that this agreement was ratified by Madden. It may perhaps be doubted whether there was any direct evidence that Teele or Cadigan had authority to act for the company; but the plaintiff's case rests sufficiently upon the authority of Madden, and any error, if there was one, in the findings or rulings made as to Teele or Cadigan was immaterial, and did not prejudice the defendant. See Harnden v. Milwaukee Mechanics' Ins. Co. 164 Mass. 382, 386; Little v. Phœnix Ins. Co. 123 Mass. 380. And after the amount of the loss had thus been fixed by agreement, there was nothing left for arbitration, and the stipulation therefor no longer had any force. Wholley v. Western Assur. Co. 174 Mass. 263. Hayes v. Milford Ins. Co. 170 Mass. 492. The question whether the defendant is liable for costs in this action is not properly before us. It is argued, on a dictum of Shaw, C. J. in Jackson v. Farmers' Ins. Co. 5 Gray, 52, 57, that the defendant is not liable for costs because the mortgagee never assented to the bringing of this action, and never assented to its being prosecuted until after it had been brought and actually tried in the Municipal Court of the City of Boston. This assent was sufficient to allow the plaintiff to maintain the action. Turner v. Quincy Ins. Co. 109 Mass. 568. It may be doubted whether the question of liability for costs in such a case can be brought before us otherwise than by an appeal from the action of the clerk as to taxation under R. L. c. 203, §§ 20, 21, as in Moore v. Cutter, 3 Allen, 468. See Coburn v. Whitely, 8 Met. 272, 275. At any rate, it is not material to be considered in determining the question of the defendant’s general liability in the action ; and that is all that is now before us. Exceptions overruled.