Long Creek Building Ass'n v. State Insurance

Opinion by Mr. Justice Bean. 1. This action was commenced and tried in Grant County, and the notice of appeal served in an adjoining county upon an attorney of defendant who resided in the county in which the trial was had. The plaintiff moves to dismiss the appeal on the ground that service of a notice of appeal upon an attorney must be made in the county where he resides, but we do not so read the statute. Section 531, Hill’s Code, as construed by this court, authorizes the'service of notices of appeal upon either the party or his attorney, if the latter resides in the county where the action was tried; but it would be a strange construction of the statute to hold that service upon an attorney could be made only in the county in which he resides. The requirements of the statute are, in our opinion, satisfied if the service is made upon the resident attorney, whether made in or out of his home county. The motion to dismiss is therefore denied. — 573 — 2. The next question we are called upon to consider is one of pleading and practice. The complaint avers that plaintiff furnished proof of loss as required by the policy, but, instead of attempting to sustain this allegation at the trial, it offered and was permitted, over defendant’s objection, to give in evidence facts which it claimed, and the court ruled, tended to show a waiver of such performance by defendant. This was error. The furnishing of proof of loss is made by the policy a condition precedent to plaintiff’s right of recovery. It was, therefore, essential to the sufficiency of the complaint that it should affirmatively show either a performance of such condition, or that it had been waived. It averred' performance, and, this being denied, the proof should have been confined to' the issue thus made. The rule is well settled that a plaintiff can not plead performance of a condition precedent, and recover under proof of a waiver of such performance: See 4 Enclycopedia of Pleading and Practice, 631, for authorities. It is true that in some jurisdictions an exception to this rule seems to have been made in actions on insurance policies, (McCullough v. Phœnix Insurance Company, 113 Mo. 606, 21 S. W. 207,) but it does not commend itself to us as founded upon either reason or authority: 2 Wood on Fire Insurance, 1134; Home Insurance Company v. Duke, 43 Ind. 421; Indiana Insurance Company v. Capehart, 108 Ind. 270 (8 N. E. 285); Fayerweather v. Phœnix Insurance Company, 118 N. Y. 324 (6 L. R. A. 805, 23 N. E. 192); Western Home Insurance Company v. Thorp, 48 Kan. 239 (28 Pac. 991); McCormack v. — 574 — North British Insurance Company, 78 Cal. 468 (21 Pac. 14); Edgerly v. Farmers’ Insurance Company, 43 Iowa, 587. A condition, which qualifies or defeats the plaintiff’s claim, being a condition subsequent, may be safely ignored by him in his complaint, because it is a matter of defense, and waived unless pleaded by the defendant; but he is required to show affirmatively either a substantial performance of a condition precedent to his right of action, or that such performance has been waived, and before he can do either he must plead it. Under our statute it is not necessary to state the facts showing performance as at common law, but a plaintiff may plead generally that he has duly performed all the conditions on his, part (Hill’s Code, § 87); but this statute in no way changes the rules of evidence, or permits a plaintiff to plead performance and recovery by showing a waiver. It is elementary law that the proof must correspond to the allegations, and there is no reason why this rule, found by long experience to be necessary to the orderly administration of justice, should not apply in actions on insurance policies as in all other cases. It imposes no hardships upon the plaintiff, and is but evenhanded justice to the defendant. A waiver of a mere defect in a proof of loss as furnished may, however, be shown without pleading it, because an omission to notify the assured of such a defect promptly and specifically estops the company from claiming that the proof furnished does not comply with the provisions of the policy, and it is therefore deemed to be due proof of loss, and sustains an — 575 — allegation of performance. But where no attempt whatever is made to comply with the provisions of the policy in that regard, but reliance is had entirely upon a waiver of performance, the waiver must be pleaded before it can be proved. 3. The principal question of fact on the trial was whether the promissory note had been paid before the fire. It is admitted that prior to that time the plaintiff paid the amount thereof to a clerk of-the local agent or solicitor through whom the insurance was effected, but who was not in possession of the note, and the contention for the defendant is that the agent had no authority to receive such payment, and this was the , important question for the determination of the court and jury. Upon this issue the court charged the jury that “Insurance agents act mainly in soliciting insurance, receiving and forwarding the application of the insured, delivering the policy to him, and receiving the premiums. Where the agent can take premiums, he can use his discretion as to the mode; he can take a check, and notice to the agent of a material fact is notice to the principal whether communicated or not. In short, the agent represents his principal, and his acts and transactions had with him are the acts of the company and transactions had with the company, provided said acts and transactions be within the scope of his authority. So that you must find first whether Patterson was the authorized agent of the company, and you must find it like any other fact, from the — 576 — evidence and under the same rules; and if you find he was, then you must find in the same way if the transactions had with him by plaintiff were within the scope of his authority; and if they were, then it has the same force as they would have, had plaintiff dealt with the company itself, otherwise, not.” By this instruction, as well as throughout the entire charge of the court, it was left to the jury to determine both the fact of Patterson’s agency and whether by virtue thereof he was authorized to receive payment of the promissory note. This was manifest error. While the existence of an agency is always a question of fact, what may be lawfully done thereunder is a question of law: Glenn v. Savage, 14 Or. 567 (13 Pac. 442). Where the fact of the appointment and authority of an agent is not in controversy, it is the duty of the court to declare, as a matter of law, whether or not it empowers him to perform the particular act in question, but where there is a dispute as to the appointment or authority conferred upon an agent by his principal, the jury must find the facts; but when they have done so, they must take the law from the court as to whether a given act comes within the scope of the agent’s authority. In this case, however, the court erroneously submitted both the facts and the law to the jury. 4. We were urgently requested at the argument to decide whether Patterson had authority to receive payment of the note in question, as that seems to be the principal matter of controversy be — 577 — tween the parties to this litigation. But we are precluded from doing so, because no such question was raised or passed upon by the court below; nor could we, if it had been, because the bill of exception does not contain or purport to contain all the evidence bearing upon his authority. 5. The fact that the note by its terms is payable at the home office of the company did not preclude it from receiving payment elsewhere through an authorized agent, but, the plaintiff having made such payment to an agent not in possession of the note, the burden of proof is upon it to show that he had authority, either express or implied, from the company to receive the same: Paris v. Moe, 60 Ga. 90. 6. And it is also true that a mere authority to receive applications for insurance, countersign and deliver policies, and receive and transmit premiums is insufficient for that purpose: Bouton v. American Mutual Life Insurance Company, 25 Conn. 542; Critchett v. American Insurance Company, 53 Iowa, 404 (36 Am. Rep. 230, 5 N. W. 543). When such an agent delivers the policy, receives and forwards the premium note to the home office, his power of molding or changing the terms of the contract or receiving payment of the premium ceases, unless authority to do so is expressly delegated or sanctioned by known or permitted usage: May on Insurance, § 138. If, therefore, Patterson had no authority from the company, either express or implied, — 578 — except “to solicit and receive applications for insurance on such property in such amounts and at .such rates as are permitted by the rules and instructions furnished by said company, and not otherwise, to receive and transmit the premiums therefor,” we think it clear that the payment of the premium note to him was not a payment to the company, unless the act was afterwards ratified and approved by it. Whet1 'r he had any further authority, or whether 1 s acts were ratified and approved by the company, are questions to be hereafter determined. 7. The defendant gave evidence on the trial tending to show that about a month before the premium note became due it notified the plaintiff in writing of the date when the same would become due, and that no agent or other person had authority to collect or receive payment thereof unless he had the note in his possession at the time, and that any payment made to such agent or person would not be recognized by the company. But' the court charged the jury that plaintiff was not bound by this notice, unless the defendant proved to their satisfaction that its terms had been accepted and acquiesced in by the plaintiff. Upon what theory this instruction can be sustained or was given we are at a loss to understand. The notice in no way affected the terms of the contract between the plaintiff and defendant. There was no stipulation therein that plaintiff should be permitted to pay the note to some agent of the company who did not have it — 579 — in his possession, but on' the contrary it was expressly agreed that it should be paid at the home office. This being so, it would be strange indeed if the defendant could not warn the plaintiff against the consequences of paying it to some agent who did not have it in his possession, or that it could not by notice to the maker revoke any authority, real or apparent,' it had previously given to the agent to receive such payment. If the notice in question was received by the plaintiff prior to the payment to Patterson, it is clear that the payment was not binding on the company, whatever authority Pattérson may have had prior to that time. It is admitted he did not have the note in his possession, and therefore, according to the terms of the notice, had no authority to receive payment thereon. The rule does not prevail that once an agent always an agent, as seems to have been the impression of the trial court as indicated by the instruction referred to. Whether Patterson had authority to receive payment of the promissory note we do not undertake to decide at this time, but we have no hesitancy in saying that if he ever had such au. thority the receipt by plaintiff of the notice referred to would certainly be in effect a revocation thereof. The judgment is reversed and a new trial ordered. Reversed.