Duncan v. Michigan Mutual Liability Co.

Per Curiam. Plaintiff seeks to recover under a binder of insurance issued through Continental Underwriters, Inc., by its representative John Issitt, naming defendant as the insurer. Continental Underwriters, Inc., is an agent of defendant, and Mr. Issitt was a solicitor for Continental. On April 24, 1974, Issitt, as a representative of Continental, met with the plaintiff, solicited insurance for Continental, collected payment toward the premium, and delivered a binder of insurance. On May 16, 1974, plaintiff suffered a loss. Defendant claims no liability since Continental only had the authority to bind insurance on "acceptable business”, which defendant claims plaintiff was not, and because Issitt was not authorized to issue insurance binders. Both parties moved for summary judgment. The trial court denied defendant’s motion for summary judgment, and in ruling in plaintiff’s favor, determined that Mr. Issitt’s actions were within the scope of his apparent authority and, therefore, were binding upon Continental and defendant. On appeal, defendant argues that the trial court erred in ruling as a matter of law that apparent authority existed, and asserts that the question is for the trier of fact. We disagree. Where there is no genuine issue as to any material fact, summary judgment may be granted. GCR 1963, 117.2(3). While defendant’s contention is usually applicable, where the facts are either admitted or undisputed as to the existence of the principal-agent relation [389] ship and as to the scope of the agent’s authority, the trial court may properly rule on the existence of apparent authority. In Coverdill v Northern Insurance Co of New York, 243 Mich 395; 220 NW 758 (1928), the Michigan Supreme Court stated: "An insurance company which has received the premium of the insured under circumstances leading the insured to believe he is receiving, in consideration of the payment of such premium, a valid contract of insurance, is estopped from afterward repudiating the contract. Michigan State Ins Co v Lewis, 30 Mich 41 [1874], Peoria Marine & Fire Ins Co v Hall, 12 Mich 202 [1864], Aetna Live Stock, Fire & Tornado Ins Co v Olmstead, 21 Mich 246 (4 Am Rep 483) [1870], North American Fire Ins Co v Throop, 22 Mich 146 (7 Am Rep 638) [1871], "The insured is not interested in the solicitor’s license from the State. The question is whether the solicitor acted within the apparent scope of his authority. When, as in this case, the solicitor solicits the insurance, collects the premium, and delivers the policy, he clearly acts within the apparent scope of his authority, especially where the insurance company receives and keeps the premium. Gore v Assurance Co, 119 Mich 136 [77 NW 650 (1898)]. That the solicitor who delivered the policy and collected the premium was not an authorized agent did not invalidate the insurance. Insurance agents generally transact their business by and through employees, and when they do so the acts of these employees are as binding upon the insurance company as though done by the agents themselves. Steele v Insurance Co, 93 Mich 81 (18 LRA 85) [53 NW 514 (1892)], Pollock v [German Fire] Insurance Co, 127 Mich 460 [86 NW 1017 (1901)], Pelican Assurance Co v Schildknecht, 128 Ky 351 (108 SW 312) [1908], 2 Wood on Insurance (2d ed) § 414, p 852, 32 CJ p 1069.” (Emphasis added.) In State Automobile Mutual Insurance Company [390] v Babcock, 54 Mich App 194; 220 NW2d 717 (1974), this Court said: "Insurance companies are bound by all acts and contracts made by their agents which are within the apparent scope of authority conferred upon them; such authority, while not actually granted, is that which insurance companies knowingly permit agents to exercise or which is held out to the public. 43 Am Jur 2d, Insurance § 156, p 212, 12 ALR3d, Temporary Automobile Insurance § 3, p 1309. In Ames v Auto Owners Insurance Co, 225 Mich 44, 49; 195 NW 686, 687 (1923), the Court wrote: " 'The general public transact their business with insurance companies through representatives of such companies without actual notice of any limit upon the authority of such representatives. The agent is usually clothed with at least apparent authority to transact the business in hand, i.e., the effectuating of insurance. In Tubbs v Insurance Co, 84 Mich 646; 48 NW 296 (1891), we quoted with approval the following language from Insurance Co v Wilkinson, 80 US (13 Wall) 222; 20 L Ed 617 (1871): " ' "The powers of the agent are prima facie coextensive with the business intrusted to his care, and will not be narrowed by limitations not communicated to the person with whom he deals.” " 'See also, Pollock v [German Fire] Insurance Co, 127 Mich 460; 86 NW 1017 (1901), Greenwich Ins Co v Waterman, 54 F 839 (CA 6, 1893), Walsh v Insurance Co, 30 Iowa 133, 145; 6 Am Rep 664 (1870). In the last cited case it was said: "' "The defendant cannot be permitted to escape liability from the acts or representations of an agent in the course of its business which he is authorized to transact, whereby a party dealing with it is induced to pay money in the belief that he will receive security in return. The agent of defendant, as we have seen, was empowered to receive payments made to defendant in the course of its busiuess. Plaintiff could well rely upon the representations of the agent that the payment to him was the regular course to pursue in order to obtain [391] the permit required. If the acts of defendant and its agent induced the belief on the part of plaintiff that the permit was issued upon the payment of the money to the agent, defendant is estopped to deny it.” ’ ” The undisputed facts show: 1) Continental Underwriters, Inc. was an agent for Michigan Mutual Liability Insurance Company at all pertinent times. 2) Their written agreement (entitled Commission Agents’ Agreement) authorizes the policy holder to pay to the agent, or to anyone representing him, premium payments. 3) The Michigan Department of Commerce certificate certifies that the records of the agency— licensing section of the Michigan Department of Commerce, Insurance Bureau — disclosed that Continental Underwriters, Inc. was licensed to represent Michigan Mutual Liability Company on the date of the fire loss in question. 4) John E. Issitt was appointed solicitor for Continental Underwriters, Inc. and licensed by the Department of Insurance as such on the date he issued the binder and on the date of the fire loss in question. 5) John E. Issitt was authorized to solicit business for Michigan Mutual Liability Company. 6) John E. Issitt issued a binder for insurance covering the fire loss in question on Continental Underwriters, Inc. printed forms and spelled out thereon that the insurance was covered by Michigan Mutual Liability Company. 7) A $350 premium was paid by plaintiff to John E. Issitt for coverage of the premises in question. 8) John E. Issitt had no authority to issue a binder without approval but such information was never communicated to plaintiff. [392] All of the above facts delineate that John E. Issitt’s issuance of the binder of insurance was within the scope of his apparent authority. The trial judge properly granted summary judgment. Affirmed.