Armstrong v. State Ins.

Day, Ch. J. — I. The plaintiff insists that the application, note and receipt set forth in the petition, constituted a valid and binding contract of insurance pending the issuance of a policy, or until the same had been acted upon by the company. The referee has found that Easton was the agent of defendant, with authority to take applications for insurance, and receive and receipt for premiums, and forward applications and premiums, and receive from the company policies of insurance, when issued, and deliver them to the assured, and that he had no other or further powers, real or apparent. The evidence abundantly sustains this finding of the referee. Such an agent has no authority to bind the company by a contract of insurance. Such a contract would be beyond the scope of his powers. Dickinson County v. The Miss. Valley Ins. Co., 41 Iowa, 286; Critchett v. American Ins. Co., 53 Iowa, 404; Ayers v. Hartford Fire Ins. Co., 17 Iowa, 176; Ayers v. Home Ins. Co., 21 Iowa, 185; Morse v. St. Paul F. & M. Ins. Co., 21 Minn., 407; Security Ins. Co. v. Fay, 22 Mich., 467; Reynolds v. Continental Ins. Co., 36 Mich., 131. It is clear to our minds that the application, note and receipt do not constitute a contract of insurance, and that they were not so understood or intended by the plaintiff or the defendant’s agent. It is evident that the application was understood and intended merely as an application for insurance, to be perfected by the issuance of a policy by the company, if the application should .be accepted. This is apparent from' the application itself. It states: “ Application is made by J. B. Armstrong for insurance against loss or damage by fire by the State Insurance Company,” and further, “the undersigned applicant for the proposed insurance hereby covenants and agrees to accept [216] of the policy issued upon this application and survey, if in accordance therewith.” The receipt is in the following form: “Received of J. B. Armstrong an application for insurance against loss or damage by fire or lightning,’ by the State Insurance Company, of Des Moines, Iowa, for the sum of $500, for six months, on property mentioned in his application; and he has paid in cash $2.00, and given a note for $8.00, payable May 1st, 1880.” Attached to this receipt is the following: “The company will not recognize any understanding between yourself and the agent about your insurance that is not fully stated in yrour application over your own signature.” The note is simply an ordinary note for $8.00, with a stipulation that if not paid at maturity “said policy shall then cease and determine, and be null and void.” To treat these papers as a contract of insurance would clearly, it seems to us, be to give them an effect never intended nor contemplated by the parties. . The case, we think, falls fully within the principle of Walker v. The Farmer’s Insurance Company, 51 Iowa, 679. II. The plaintiff offered in evidence an advertising card of the defendant, furnished Easton as a part of his agency supplies, and upon which his name was planted as agent. The defendant objected to this evidence on the ground of immatériality, in that, the fact of Easton’s ’ having a soliciting agency being admitted, this card does not tend to explain it. The objection was sustained, and of this ruling the plaintiff complains. The rejection of this evidence worked the plaintiff no injury. The evidence would have been of no avail, unless it would establish the fact that Easton had power to bind the company by a contract of insurance. It is clear to us that it could not have that effect. III. The plaintiff offered to prové that all mercantile policies issued by defendant on application sent by N. B. Eas-' ton, as company’s agent, contained this clause: “But the same: shall not be valid until countersigned by the authorized agent [217] at Shenandoah, Iowa.” Also the following: “Countersigned at Shenandoah, Iowa, the —'day of —■ month, of year, 1879, N. B. Easton, agent.” That a large number of such policies had been issued by the company on applications sent .by N. B. Easton, agent. This evidence was objected to as incompetent and immaterial, not tending to show the character of-the agent. Upon the statement of plaintiff’s counsel that he desired by said testimony to show the authority of the agent to bind the defendant from the time of making the application, the objection was sustained, and the evidence was excluded. The plaintiff complains of this action. In this ruling there was no error. The evidence shows that Easton was not supplied with policies, and that he had no power to issue them. The fact that he was required to countersign policies issued by the company, would not confer upon him any power to bind the company to a contract of insurance before any policy was issued. IY. It is claimed that the second conclusion of law of the referee, that the application of plaintiff was not arbitrarily rejected by the defendant, is not supported by the evidence. The evidence shows that the application was rejected by the defendant on the fifth day of February, before it had any notice of tHe loss, because it already had more insurance in the row than it could carry. There is nothing at all in the case to show that the company did not act in good faith. If it considered the risk an undesirable one, it had a clear legal right to reject it. The record discloses no error. Affirmed.