American Insurance v. Gallatin

Lyok, J. No consent of the secretary of the insurance company that Gallatin might procure other insurance on the insured property, is written on the policy. It is manifest, therefore, that, by the terms of the contract between the parties, the policy in suit is void, unless the company or its agent has done some act, or is chargeable with some omission of duty, which operates as a waiver, or which estops the com — 43 — pany from availing itself of the stipulation that the policy shall he void in case further insurance of the property be obtained without such consent written thereon. Inasmuch as the judge directed a verdict for the plaintiffs, the judgment cannot be upheld unless the facts constituting such waiver or estoppel are conclusively proved. As we read the testimony, the undisputed facts proved on the trial are as follows: The policy in suit was issued to Gal-latin in 1874, and the insurance was for five years. The application for the policy was made to King & Lawsonj the local agents of the company. The powers of these agents were limited, by their appointment, to receiving applications for insurance and collecting premiums therefor. That is to say, they were surveying agents only. Fleming v. Ins. Co., 42 Wis., 616. The policy was forwarded to Gallatin from the office of the company in Chicago, indorsed at such office, “ King & Lawson, Agents.” In 1875, King c% Lawson dissolved their copartnership, but both continued to act as agents for the company. King remained a surveying agent; but in May, 1876, Lawson was appointed a recording agent of the company; that is, he was invested by the company with power to make contracts of insurance, and countersign, issue and renew policies on behalf of the company, as well as to receive applications and collect premiums. Fleming v. Ins. Co., supra. It does not appear that Gallatin had any notice of the character of the agency of King & Lawson, further than it might have been disclosed inferentially by the manner in which they conducted the business. Lawson testified that he was not a recording agent of the company in respect to a class of policies denominated “installment policies;” that his commission does not apply to such policies. The policy in suit is one of this class. _ But the witness produced his written appointment or commission as agent, and no distinction is made therein between installment and other policies. The power therein conferred is gen — 44 — eral. It may be observed here tliat tbe writing is the best evidence, and destroys the force of the conflicting oral testimony. In the fall of 1876, Gallatin applied to Lawson for further insurance on the insured property, and the latter referred him. to Ring. It does not appear that he then applied to King. Early in 1877, and a few weeks before the fire, Gallatin again applied to Lawson for further insurance on the property, and was again referred by him to King. Lawson testifies that he referred Gallatin to King because he thought there was already enough insurance on the property; but it does not appear that he told Gallatin so. It satisfactorily appears that Gallatin thereupon applied to King for the additional insurance, and King sent him to Bennett & Pulling, who were agents at Oshkosh for other insurance companies, and they issued another policy to Gallatin on the insured property, in behalf of the “ Millville Insurance Company.” This policy was issued February 16, 1877. King occupied the same office with Bennett & Pulling, and had there a copy of Lawson’s register of the business of the defendant company — the American, — which contained an entry of the policy in suit. Mr. Pulling, who transacted the business with Gallatin, examined the register and saw this entry when he issued the Millville policy. Within three or four days thereafter, Pulling informed King that he had issued such policy. Pulling’s testimony on the subject (which is uncontradicted) is as follows: “ The record that I examined in the American Insurance Company’s books was the record of this policy; it was not a full copy of it; it was a sort of an abstract. I told Mr. King that I had issued additional insurance on the property; he said nothing; he merely glanced at the register, and sat down and said nothing about it; he glanced at the Millville register. He asked if I had seen a man he had sent there; this was at the time I told him about the policy; I told him I had written it — 45 — up in the Millville, and pointed to the register. The whole conversation about the matter was this: he ashed, when he came in, if I had seen a man (I think he mentioned the name) that he had sent there for additional insurance; I said, yes, and I said that I had written it up in the Millville, and pointed to the register that lay on the desk; he merely glanced at it, and nodded and sat down. I wouldn’t be certain that he mentioned any names.” Gallatvn was not notified by any person that the policy in suit was rendered invalid by the additional insurance, although he. and the agents of the defendant company, King & Lawson, all resided in Oshkosh until after the fire. The insured property was burned March 25, 1877. King died in the fall of that year. Erom the foregoing facts, the inference seems very plain, that Gallatin believed, and had the right to believe, that Lawson consented to the further insurance. If Lawson was of the opinion that the property was already fully insured, it was his plain duty to express that opinion to Gallatin. lie did not do so, but so dealt with Gallatvn that the latter evidently thought he had his consent, and on the faith thereof incurred the trouble and expense of obtaining the Millville policy. Uor is this all. King, the agent of the defendant company, to whom Lawson referred Gallatin, evidently consented to the further insurance; certainly he assented to it soon after it was obtained. It is argued that the company is not bound by these acts of King, because he had no power to make contracts for it. We are inclined to think that there is nothing in the evidence tending to show that Gallatin had notice that King was only a surveying agent. The fact, standing alone, that the application for the insurance was forwarded to the office of the company for approval, to the knowledge of Gallatin, is not such evidence. Although that course must be pursued by a mere surveying agent, it may be pursued by a recording agent; — 46 — and it would be unreasonable to charge the insured with notice of the precise character and limits of the agent’s authority, merely because he knew that the agent thus forwarded the application for approval. We. conclude, therefore, that, quoad the insured, both Lawson and King must be regarded as general agents of the defendant company; that is, as agents having power to contract for the company. So regarding them, their consent, or the consent of either of them, to further insurance, is binding upon the company, and operates as a waiver of the stipulation in the policy concerning the manner in which consent to further insurance should be given. On the same grounds, acts in pais of either agent, which would estop the agent were he the principal, will in like manner estop their principal — the insurance company — from claiming a forfeiture of the policy under the stipulation. Had Lawson expressly consented to the further insurance, it is conceded that such consent would bind the company and operate as a waiver of the stipulation. Why should not the comjDany also be bound by the consent which may fairly be implied from the manner in which he treated the application of Gallatin for further insurance? And why is not consent thus given, which Gallatin accepted as consent, and acted upon in good faith, equivalent to express consent? No good reason is perceived why the company is not equally bound in either case. But if the acts of Lawson in the premises do not amount to a waiver, we think they raise an estoppel against the company. Had Gallatin applied at the office of the company in Chicago for further insurance, or for leave to obtain it, and had the general officers of the company in charge of its business there referred him to King, their agent, without expressly assenting to or dissenting from the application, and had King consented to further insurance, and directed the insured where to obtain it, making no objection when notified that he had obtained it, no court would hesitate — 47 — for a moment to hold that the company was estopped to claim a forfeiture of the policy because the consent of its secretary was not indorsed upon it. In this transaction Lawson represents the company, and the same results must follow his acts and omissions as would follow the same acts and omissions of its president, secretary, or board of directors. As regards the acts of King, we are satisfied that he expressly consented to the further insurance, and thereby waived the necessity for obtaining the written consent of the secretary. The grounds upon which we are inclined to hold his consent binding upon the company have already been stated. Holding, however, that the company is bound by the acts and omissions of Lawson, it would not change our judgment were we to hold the opposite views in respect to the acts of King. Our conclusion is, that the evidence shows conclusively that the plaintiffs were entitled to recover, and hence, that the court properly directed a verdict for them. The rules of law upon which our judgment is based, have been applied by this court in many cases, some of which will be found cited in the brief of counsel for the defendants in error. "We have determined the appeal without reference to chapter 13, Laws of 1871, sec. 1, which provides that a person performing certain acts in respect to an insurance company “ shall be held to be an agent of such company to all intents and purposes.” An argument has been based upon this statute to show that one who, before the act, was a mere surveying agent, becomes by the act, as to the public, a general agent; that such is the construction to be given the phrase “ to all intents and purposes;” and that under the statute the acts of King would bind the company as effectually as would those of Lawson, or any other recording agent. On the other hand, it is argued that the purpose of the — 48 — statute is to make agents like King amenable, as agents of the companies, to the requirements of the insurance laws of the state, and not to extend the liability of the companies for the acts or omissions of their soliciting or surveying agents. See, also, R. S., sec. 1977. "We do not on this appeal determine the construction'of the statute. Allusion is here made to it mainly for the purpose of saying that in the case of Fleming v. Ins. Co., 42 Wis., 616, our attention was not called to it, and it was not considered. It may be that a construction might properly have been given to the statute in that case; but none was given, and the question as to what is the true construction thereof must be considered open for future argument and adjudication. By the Court.— The judgment of the circuit court is affirmed. Ryan, C. .J., dissented.