United States Life Insurance v. Lesser

PER CURIAM. The action in which the appellee AA’as plaintiff and the appellant defendant, was founded on a policy of insurance on-the life of Henry Silberman for $3,000, issued by the defendant, in which the plaintiff AAras the assured. The assignments of error .are numerous, involving the rulings of the court below on demurrers to 'special replications in ansAver to special pleas in bar; the admission and rejection of evidence; and the giving and refusal of instructions to the jury. — 579 — The special pleas were numbered respectively three and four. The first in substance alleged that by the terms of the policy expressed as conditions' (which are-recited) all premiums were payable in the city of New York, at the office of the company, or to a duly authorized agent, in exchange for -the receipt of the company, signed by the president, secretary, assistant secretary, or 'actuary. That the failure to make payment of any stipulated premium when it became due and payable, or within ten day thereafter, if the policy had not been in force full three years, (as this policy had hot been,)operated a forfeiture of the policy, and of all payments which had been made thereon. That a semi-annual premium on the policy became due and payable on the 5th day of October, 1893, which was not then paid, nor within ten days thereafter, ten daj^s of grace being allowed for its payment. 'That the policy contained a provision expressed in these words: “That no person other-than the president, together with the secretary or actuary, shall haAre power to alter or waive any contract or condition on behalf of the company,” and the plea negatived the waiver or alteration of any contract or condition expressed in the policy, by these officers or either of them. The fourth plea, omitting all reference to the provision touching the alteration or waiver of contracts or conditions, predicated the defense on-the failure to pay the semi-annual premium within thetinie appointed. The plaintiff in answer to the pleas interposed five-special replications, numbered respectively one, two, three, four and seven, to the first four of -which the defendant demurred. With the exception of the first, which was of tender of the premium within the time of credit allowed, the replications are in confession, and avoidance. They proceed on the hypothesis that the failure to pay the premium within the time appointed would operate a forfeiture of the policy and of all rights of the plaintiff thereunder, unless payment was waived, or non-payment was superinduced by the1 acts and conduct of an authorized agent of the defendant. We do not deem it necessary to pass on the demurrers to the special replications—'they have not been argued by the counsel for the appellant, and the issues — 580 — as formed, upon which the trial was had, enabled the parties to introduce all legal evidence in support of their respective contentions. The question to which the argument of the counsel for the appellant has been mainly directed is whether in the presence of the condition of the policy “that no person, other than the president, together with the secretary or actuary, shall have power to alter or waive any contract or condition on behalf of the company,” it was competent for the plaintiff to show that an agent or 'agents of the appellant, in whose acts neither of these officers participated, had waived the payment of the premium at the time appointed by their acts and conduct superinducing non-payment, the breach of the ■condition insisted on as cause of forfeiture. The validity of the condition, and that of - it the plaintiff had knowledge prior to the alleged waiver is not disputed; nor can it be doubted that the condition was intended to restrain, and to give notice of the restriction of- the authority of agents as distinguished from the officers of the company. Whatever may be the scope—to whatever of contracts or conditions expressed in the policy it may extend—it is not in prohibition or limitation of the power of the company to contract; or to abrogate, or to modify contracts or conditions intended exclusively for its benefit. It is no more nor less than a condition reserved for the benefit of the company, of which at its volition it could take advantage, or waive, and delegate to agents the implied power vested in the president in conjunction with the secretary or actuary.—Ins. Co. v. Norton, 96 U. S. 234; Ins. Co. v. Doster, 106 U. S. 30; Bodine v. Ins. Co. 51 N. Y. 117; (s. c. 10 Am. Rep. 556); Lyons v. Travellers’ Ins. Co., 55 Mich, 141; (s. c. 54 Am. Rep. 354); Ins. Co. v. Earle, 33 Mich. 155; Viele v. Germania Ins. Co., 26 Iowa 9; (s. c. 96 Am. Dec. 83). The waiver of the payment of the premium on the day appointed and the conduct superinducing non-payment, is imputed particularly, we may say, exclusively to Fraleigh, and the point of controversy is whether he was an agent 'of the company, and if agent whether the waiver and conduct, was not in excess of the author — 581 — ity conferred upon him. Passing for the present the consideration of the implication of authority deducible from the fact that the receipt for the premium had been intrusted to Fraleigh for collection, and that payment to him would have been full compliance with the condition, keeping the policy in force, there is other evidence, free from all just objection, having, to. say all that it is within the province of the court to-say, a reasonable tendency to show that Fraleigh was an agent of the company and the scope of his authority. The fact is not controverted that in the exercise of the functions for which it was created a corporation the company was doing continuous business in Birmingham, necessitating the presence of an agent, or agents; for corporations remote from their domicil, cannot act otherwise than by and through agents. The officers to whom the management and control of its affairs may be committed, do not, and it is not contemplated that they will, in the transaction of ordinary business, carry their official functions' beyond the home office or domicil, whichever it may he termed. Through and by Fraleigh, insurance was solicited, applications for policies were made, and when the applications were approved and the policies were issued by the home office in New York, delivery of them to-the assured was made by Fraleigh. The amount of the policies so obtained by him, aggregating annually, an average of $500,000, the benefit of which accrued to and was accepted by the company. He held himself out in no other capacity than as the agent of the company, and those dealing with him had no knowledge or notice of any other agency, or agent of like power, having an office or place of business in Birmingham >or in Alabama. Styling himself agent he corresponded with the home office in New York, and as its agent doing business in Birmingham, the company, paid the license tax, State and county, to which he was subject. He collected premiums for the company, and from the moneys collected, retained, prizes because of the amount of policies obtained through his agency, sometimes amounting to $1,000 annually. This course of dealing, or of business, could not 'have been unknown to the board of directors, or other managing officers of the company in New York,, — 582 — unless (which is not to be presumed), they were wanting in ordinary care and diligence in the management of the business of the company. It is insisted that in point of fact Fraleigh. was the agent of Shepherd, and not the agent of the company— that it was as agent of Shepherd lie transacted business, Jand was not known to or recognized by the compnay in any other capacity. We have just referred to, and need not repeat the evidence showing or having a reasonable tendency to show, that Fraleigh was the agent of the company, and was so recognized. It is now made to appear that originally Shepherd appointed him his agent, to do for the company, many, if not all, the acts he did ostensibly as the agent of the company. But it was not shown, nor is if insisted, that those ’dealing with and relying upon Fraleigh, as the agent of the company, had any notice of the agency for Shepherd, or were-put on inquiry as to its'existence. And now it appears, that the course of business pursued was generally, though not uniformly, that Fraleigh forwarded the applications for insurance he obtained to Shepherd, by whom they were transmitted to the home office iii New York, and when the policies issued they were sent to Shepherd, and by him sent to Fraléig'h for delivery to the assured. So, receipts for premiums were sent to Shepherd and -by him counter■signed, and such as came to Fraleigh for collection came from Shepherd. The agency for Shepherd was not inconsistent with an agency for the company; there was no antagonism of interest or of duty forbidding, though the one might render the other unnecessary. Without displacing the compensation to which Fraleigh was entitled under the agreement with Shepherd, the company for the same service, could allow the same measure of •compensation. Whether paid as agent of Shepherd, or as the agent of the company, the compensation would be paid from the money of the company. If there was controversy as to whether in any particular transaction Fraleigh'acted as agent of the company, or as agent of Shepherd, a question not now of law for the court, but of fact for the jury, would be presented. When the fact of agency, or of the extent of the authority of the agent, — 583 — rests in parol, it is the province of fixe jury to determine the one or the other.—Syndicate v. Cathchings, 104 Ala. 186. The receipt for the payment of the premium has been entrusted to Fraleigh for collection. As we have said, he had authority to take payment, and payment to him would have been full compliance with filie condition, keeping the policy in force. This would have been true, whether he obtained and held the receipt as the 'agent of the company or as the agent of Shepherd. The insistence is that in either capacity he was limited in authority to the acceptance of money in payment, on the precise day the premium became due and payable, and the limitation it is argued, results from the restriction of the power of agents expressed in the policy. The insistence is in denial of any authority to the agent, resulting from the duty to collect the premium, and of all discretion in the performance of the duty. In 1 May on Insurance, §134, it is said that an agent authorized to accept the payment of premiums, may exercise his discretion as to the mode of payment—that he may accept a note or check instead of money—that if money be offered, he may let the money lie, calling for it when he wants it—that he may accept the assured as his personal debtor for the premium, agreeing to be himself personally responsible to the company. .In Bliss on Life Insurance, § 300, it is said: “An agent entrusted with the renewal receipts may give credit for the renewal premium, 'and may make a binding renewal by parol, though the receipts provide that they are not to be valid till countersigned by him.” In Ins. Co. v. Wolff, 95 U. S. 326 the policy (not distinguishable in substance and legal effect fom the present policy), declared as one of its conditions, that the failure to pay a premium on the day when due, should operate a forfeiture. And the policy further declared that agents were not authorized to make, alter or discharge contracts, or waive forfeitures. A local agent to whom a renewal receipt for a premium had been sent for collection, waived payment of the premium on the day when due. The court held that he had authority to make the waiver, 'saying: “The company, notwithstanding the provision in the policy that its agents were — 584 — not authorized to waive forfeitures, sent to them renewal receipts signed by its secretary, to be used when countersigned by its local manager and cashier, leaving their use subject entirely to the judgment of the local agent. The propriety of their use, in the absence of -any fraud in the matter, could not afterwards be questioned by the company.” This was the interpretation by Fraleigh, and by Shepherd of the authority resulting to each, from the duty to collect premiums. Fraleigh testifying that sometimes, when the parties were good, lie would extend payments of premiums for 30 to 60 days; and sometimes would take a note for a renewal, informing the party that for him, he would pay the premium to the company. And it is apparent from the frequent collection of premiums, by Shepherd, after they had become due and payable, that lie waived payment on the day appointed. The implied authority resulting from the duty to collect the premium is sufficient to support the waiver of payment in this case, deferring it to a future dajc Independent of this implied authority, there was evidence, the weight and sufficiency of which, under proper instructions from the court, was matter for the determination of the jury, that Fraleigh had authority to waive payment of premiums. As . has -been pointed out, he, nor Shepherd, had exacted the payment of premiums ad diem. Important as is the prompt payment of premiums to the business of life insurance, it rests in the option of the company to waive the payment in particular cases, an option, we suppose, all companies exercise, and exercise .through agents of their appointment. Whether the agent has the authority, is not necessarily, to be shown by direct or positive evidence. More often, perhaps, it is shown or inferred from the course of dealing or business the company and agent pursues, or has pursued.—Bodine v. Ins. Co., 51 N. Y. 117; (s. c. 10 Am. Rep. 566); Ins. Co. v. Peacock, 67 Ala. 253; Ins. Co. v. Norton, 96 U. S. 234; Ins. Co. v. Doster, 106 U. S. 30. Having acquiesced, as the evidence tends to show, in the waiver by Fraleigh of the payment of premiums when due, it is too late for the company, as against the plaintiff, and others similarly situated, to insist that by the terms of the policy, — 585 — agents were not authorized to make or alter contracts, or waive conditions or forfeitures. Of the condition,, and of tlie restriction of the power of agents, thej1- liad notice, as is insisted by tlie appellant, but they bad also notice, and relied upon the usages of the company, dispensing with the restriction, and of the authority to make waivers, conferred on agents directly or by implication.—Buckbee v. Ins. Co., 18 Barbour 541; Helme v. Ins. Co., 61 Penn. St. 107; Girard Ins. Co. v. Mut. Life Ins. Co. 86 Penn. St. 236; Ins. Co. v. Hoover. 113 Penn St. 591; (s. c. 57 Am. Rep. 511). The tendency of the evidence supports the insistence of the appellee, that the premium would have been paid at the time-appointed, if -Fraleigh had not waived the payment, deferring it until the return of the rewritten policies-' from New York. The cause for deferring payment was committed to his judgment—that which he deemed sufficient was binding on the company, in the absence of fraud or collusion.—Ins. Co. v. Wolff, supra. There-writing of the policy, however it may have served the purposes of the assured, would not have affected any right or interest of the company. It was intended that the new policies should contain all the terms and conditions, and no -other, which were contained in the -original policy. And it is not a strained inference from the evidence, that if it had not been for the sudden,, unexpected death of Silberman, the officers in New York would have assented to the rewriting of the policy, though they knew the premium ivas unpaid. The policy and application for rewriting had been received; consideration of it was not- refused because the premium was unpaid, but for the reason that before any action-was taken, the home office was informed of the death of Silberman. If the -company contemplated the forfeiture of the policy because of the non-payment -of the premium, it should at once have s-o declared plainly and unconditionally.—Jolife v. Mut. Life Ins. Co., 39 Wisconsin 119; (s. c. 20 Am. Rep. 35); Ins. Co. v. French, 30 Ohio St. 240; (s. c. 27 Am. Rep. 443); Life Ins. Co. v. Anderson, 77 Ill. 384. There is much of conflict in the evidence as to the time when the transaction for the rewriting -of the-policy occurred, and the policy Av-as delivered to Fra — 586 — leigJi for -transmission to the home office in New York, whether it was before or after the premium became due and payable. We do not deem it material whether the transaction occurred, and in pursuance of it there was delivery of the policy to Eraleigh, before or after the ■falling due of the premium. If before it would be a fraud on the appellee to insist on a forfeiture because of the non-payment of the premium, the non-payment having been superinduced by the acts of the agent of the company. If after, the transaction was in recognition of the continuous existence of the policy, and of the election to waive the forfeiture.—Ins. Co. v. Norton, 96 U. S. 241. Facts or circumstances, or a course of dealing, indicating that the policy was regarded as ■ subsisting not forfeited, inducing the assured honestly to believe, and to- act on the belief, that the conditions are dispensed with, preclude the company from insisting up-o-n the breaches of the conditions as a defense to a suit on the policy by the assured.—Viele v. Germania Ins. Co. 96 Am. Dec. 100, and learned note at close of opinion. In Insurance Co. v. Young, 86 Ala. 424, it is said: “If the company, after knowledge of the breach, enters- into negotiations or transactions with the assured, which recognizes and treats the policy as still in force, or induces the assured to incur trouble or expense, it will be regarded as having waived the right to- claim the forfeiture.” It is apparent that neither Eraleigh nor Shepherd, regarded the policy as forfeited. If they had so regarded it, they could not have participated in the negotiations for rewriting the policy. It would have been vain for Fraleigh to have .received from the appellee, a policy he knew or claimed to be forfeited and without force, and to have sent it to Shepherd for transmission to the home office in New York. And it would have been vain for Shepherd to transmit it, and for the company to have received it, if the election had been of forfeiture. The nature .of the transaction, and the relation of the parties, demanded prompt action, if there had been forfeiture of the policy, upon which the company intended to insist. Forfeitures of policies because of the non-payment of premiums is not favored in the law, “and the — 587 — courts are always prompt to seize hold -of any circumstance's that indicate an election to waive a forfeiture, or an agreement to do so on -which the party has relied and acted.”—Ins. Co. v. Eggleston, 96 U. S. 572; Ins. Co. v. Doster, 106 U. S. 30. The assignments of error relating to the admissibility and rejection of evidence have been considered. Without prolonging discussion we cannot refer to them in detail. And in passing upon the questions already considered we have passed necessarily upon the admissibility of -much of the evidence, and the parts to which objections were the moi'e vigorously pressed. All relating to the agency of Fraleigh was of more or less tendency to show the agency, the course of business he pursued, and 'the recognition -of him by the -company as its agent. Several -o-f the assignments relate to the exclusion of opinions, or conclusions of law or of fact up'o-n the part -of witness. The court below properly excluded the opinions and also the -conclusions, reserving to itself the determination of the matters -of law, and to the jury the determination of matters -of fact. The -summary of our conclusions i-s, first, that the condition of the policy restraining the power of agents ■“to alter or waive any contract or condition on behalf of the company” -was a condition reserved for. the benefit of the conipany, of which it could take advantage or could waiAre it -and delegate to agents the implied powers vested in the president in conjunction AAdth the secretary or actuary. Second, that there avu-s eAddence h-aAdng -a reasonable tendency to show that Fraleigh was an agent o-f the company, -and the scope of his authority. ' Third, the fact of hi® agency and the extent of his authority resting in parol, became matter for the determination -o-f the jury. Fourth, that the extent of his authority need not be sli-o-Avn by direct or positive -evidence—that it may be shown or inferred from the course -of dealing pursued bv him and the company. Fifth, that haA-ing been entrusted Avi-th the collection of the ren-CAAml receipt for the premium, he could AvaiAre payment of-the premium on the -day appointed, deferring it until -the return -o-f the reAvritten' policies from the home office in New York, or until there was refusal to rewrite, of AAhi-ch the assured had notice. It is in — 588 — connection with, these propositions, the instructions given or refused, must he considered. The defendant requested nine instructions, which were refused, and we deem it the more convenient to consider them before referring to ‘the instructions given, to which exceptions were reserved. The first of the instructions requested, affirmed as matter, of law, that Fraleigh was not the agent of the company to collect the premium, but was the agent of Shepherd. We have already said, that if in reference to anjr particular transaction, it became matter of controversy whether Fraleigh acted as the agent of the company or as the agent of Shepherd, a question not of law for the court, hut of fact for the jury would be presented. The second instruction affirmed as matter of law., that Fraleigh had no authority to contract for the rewriting of the policy, and no authority to extend the time of payment of the premium; and unless the jury believe from the evidence, that the company had full knowledge of the agreement prior to the death of Silbennan, and ratified or confirmed it, they would find for the defendant. An instruction requested, must be wholly correct in point of law, or there is no error in the refusal of it. 'Commingled with other matter, there is in the instruction the unequivocal denial of the authority of Fraleigh to extend the time of payment of the premium, an authority with which we have pronounced he was clothed. For this, if not for other reasons, the instruction was properly refused. As.to the third instruction, it is sufficient to say, the evidence was uncontroverted, that of the agreement as to the rewriting of the policy, Hie defendant had knowledge before the death of Si'lherman. The application for rewriting and the policy had been ’transmitted to, and was received by the home office in New York, and the policy, it seems, was not returned until after the commencement of this suit. The instruction was contradictory of the positive, unoontroverted evidence, and was properly refused. The fourth is a general instruction to the jury, to find for the defendant, if they believe the evidence; an instruction, which without invading the province of the jury, cannot be given when the case fairly depends — 589 — upon tlie sufficiency and weight of the evidence.—-1 Brick. Dig. 335, § 3. The fifth and sixth are inconsistent. with the conclusions we have reached and expressed, repetition of which is unnecessary. The seventh instruction relates to the sufficiency of the evidence to support the first special replication which is of tender of the premium within the time of credit allowed. The tender was made by Steiner on behalf and at the instance of the plaintiff. The point of the instruction seems to be, that although Steiner having the money, and offered prompt payment, yet, if he gave Fraleigh the option of immediate acceptance of the money, or of postponing acceptance until the return of the rewritten policies from New York, the evidence did not support the replication. As was said by the court in its general charge, ‘there is a difference between the tender of money and the offer to pay money,” and “generally an offer to pay and a refusal by the person to whom the money is due to accept, is equivalent to a tender.” The refusal to accept the money when offered, rendered unnecessary its production, as by its production no purpose would be accomplished.—Rudolph v. Wagner, 36 Ala. 698; Root v. Johnson, 99 Ala. 90; Appleton v. Donaldson, 3 Penn. St. 381; Moynehan v. Moore, 77 Am. Dec. 468, and note at close of opinion; Lacy v. Wilson, 21 Mich. 479. Fraleigh exercising his own option declined the offer of immediate payment of the money, converting the offer into a good tender. The instruction was properly refused, and the instructions upon the point given by the court were not subject to exception. The eighth instruction read in connection with the seventh replication to which it makes express reference, affirms as matter of law, that Shepherd had no authority to bind the companv by ratifying the alleged waiver by Fraleigh of the payment of the premium when due, and of the alleged agreement for rewriting the policy. The hypothesis of the instruction is that the extent of the authority of Shepherd is to be ascertained solely from the terms of the writing appointing his agent, which was in evidence. By that instrument Shepherd was a mere soliciting and collecting agent, but a provision that he was to perform such other duties as were re — 590 — quired of him by the officers of the company, was inserted, it is fair to presume, in contemplation of the enlargement of his powers to meet the real or supposed exigencies of the company. Originally, his authority was limited to the State of Georgia, but by parol was extended to the State of Alabama, and with the knowledge of the company he assumed the title of general manager, in designation of the extent of his authority, establishing a department or branch office at Atlanta. General manager, it cannot be supposed, is of less significance than general agent. The extent of the authority’1 of an agent employed to manage the business of a principal, is dependent upon the nature of the business and the degree to which it is placed under the control of the agent. Such an agent has implied power to do those things which are necessary and proper to be done in carrying out the business in its usual and accustomed way. The general manager of an insurance company has by 'implication this measure of authority. Mechem on Agency, § 395. As general manager, Shepherd requested the auditor to issue certificates of authority to certain persons whom he designated as agents of the company. And* as he expressed it in his testimony, as manager in Georgia and Alabama, he “had exclusive control and jurisdiction.” The extent of his authority, resting in parol, became matter for the determination of the jury, and the court could not affirm as a matter of law it did not extend to the imputed ratification. The ninth instruction proceeds on the theory that the authority of Shepherd to ratify was dependent on his knowledge of the acts, the subject of ratification, prior to the 20th October, 1893. Shepherd had no less power at that time than he had prior'or subsequent thereto. If the theory of the instruction is that there could be no ratification after the premium had become due, it is founded in error.—Ins. Co. v. Norton, 96 U. S. 241. If this is not the meaning, the instruction is vague, uncertain, and in its tendencies misleading, and was for this reason properly refused.—Hughes v. Anderson, 68 Ala. 280. Necessarily we have already passed upon the matters involved in the exceptions to the general charge of — 591 — the court. The principles of law asserted in 'the charge are in accordance with the conclusions we have reached and all questions of fact were submitted to the jury. Let the judgment of the court below be affirmed. The opinion in this case was in course of preparation by Chief Justice Briokell when he retired from the bench. It lias since been completed by him, and is adopted by the court. *