Zell v. Herman Farmers' Mutual Insurance

TayloR, J. The learned counsel for the appellant contend that the evidence introduced on the part of the plaintiff fails to show that he had any insurance upon the threshing machine at the time it was destroyed. The contention of the learned counsel is that the agent of the company had no authority to make any contract for insurance on the part of the company, which could bind the company, until such contract was approved by the board of directors or other general officers of the company, or by the actual issuing.of a policy of insurance by the company; and as it is admitted that there is no evidence in the case showing any approval by the company of the alleged contract of its agent, or showing that the board of directors or other general officers had any knowledge of such alleged contract until after the loss, the company is not liable for the loss. The learned counsel for the compamr seem to contend that, under the by-laws and rules of the company, it cannot bind itself in any case except by issuing a policy of insurance. To sustain this proposition, they cite a by-law of the company which reads as follows: “ All applications for insurance shall, before the policy is is [526] sued, be examined and approved by the board of directors or by a committee appointed for that purpose.” They also cite a part of a by-law which provides that the secretary “ shall, after the applications have been approved, issue and deliver all policies, and keep a list of the same:” They also cite from the instructions given to regulate the conduct of their agents the following: “ Policies are issued in the office of ■this company, signed by the president and secretary. As soon as the application is approved by the respective committees it shall be in force from twelve o’clock at noon of the same day, unless a separate date is fixed in the application.” V& believe these are the only provisions in the bylaws of the company, or in its instructions, which are claimed to restrict the company from making a contract of or for insurance except by the issuing of a policy or by the approval of a written application. The testimony of the agent shows that the custom of the company has been to issue new policies, covering the same risk, when desired, without any new written application therefor, and upon the request of the agent through whom the original insurance was effected. The evidence also shows that, as a general rule, the secretary issues the policies without any approval of the application therefor by a committee. The secretary himself testified that “ the secretary has power to issue insurance and renew it.” On bis further examination, he testified: “ In the first place, if it’s satisfactory to the secretary, he issues the polic}?-. Don’t pay any attention to the committee. The committee have quarterly meetings, and examine the policies, and if they find any one they do not like it is canceled.” The act of incorporation of the company (ch. 372, Laws of 1856) authorizes the company to make contracts for insurance, and in no way restricts the company to contracts which are evidenced only by a policy of insurance. We think there can be no doubt that, under the rules and practices of the company, the sec [527] retary of the company would not only have had full authority to have issued a new policy to the plaintiff continuing his insurance on the threshing machine for another year without any new written application therefor, but also that he would have issued it had the agent requested the same in the usual way. As it must be held that the company could bind itself by a contract'of insurance without issuing a written policy, we hold that, under sec. 1977, R. S. 1878, the company must be held bound by the contract of its agent. The agent having received the premium in payment of the insurance, and declared that the plaintiff was insured from the termination of the first policy for another year, and the company or its agent having retained the premium paid until after a loss has occurred, it would be a fraud upon the plaintiff to permit the company to now say that it was not bound. The facts in this case bring it clearly within the statute, aüd under the statute we must hold that the company is bound by the act of its agent. The agent having for years acted on behalf of the company, with its sanction, it cannot now be heard to say that be exceeded his power, especially in a case, where there is no evidence -which tends to show that the plaintiff had any knowledge that he ivas exceeding his authority, if he had in fact exceeded it. The following cases, giving a construction to said sec. 1977, R. S., clearly bring this case within the statute: Schomer v. Hekla F. Ins. Co. 50 Wis. 575, 582, 583; Knox v. Lycoming F. Ins. Co. 50 Wis. 671, 676; Alkan v. New Hampshire Ins. Co. 53 Wis. 136, 143; Body v. Hartford F. Ins. Co. 63 Wis. 157; Hankins v. Rockford Ins. Co. 70 Wis. 1; Renier v. Dwelling House Ins. Co. 74 Wis. 89. It is contended by the learned counsel for the appellant that sec. 1977, R. S., is not applicable to the agent of a mutual insurance company. The language of the statute is, “ any insurance corporation.” The words used include [528] mutual as well as stock corporatious, and we see no reason for holding that mutual companies are not included in the words “ any insurance corporation.” In addition to that, the evidence in this case does not disclose that the appellant is a mutual company, except in name. It is also insisted that the plaintiff ought not to be allowed the benefit of the statute, because it is said he knew or was chargeable with notice that the agent did not have the authority which he assumed to have in making the contract of insurance. This claim is based solely on the fact that the plaintiff at the time held a policy or policies in said company, which on their face disclosed the want of authority to make'the contract in question. If it be admitted that the plaintiff was presumed to know the contents of such policy or policies, we think theré was nothing in them that clearly negatived the authority of the agent to make the contract he did. The clause in the policy relied upon as giving notice to the plaintiff of a want of authority reads as follows: “ The company is not liable for contracts made by agents before such contracts have been approved and certified to in writing by the secretary.” It was held by this court in Hankins v. Rockford Ins. Co. 70 Wis. 1, and Renier v. Dwelling House Ins. Co. 74 Wis. 89, that a condition of this kind in a policy relates only to contracts made by the agent with the assured after the execution and delivery of the policj7, and does not prevent the agent from waiving, at the time of making the contract of insurance, any stipulations in the policy as to the condition of the property insured, or other matters in regard to the risk which the company might deem important. Justice Cassoday, in the case last above cited, says: “ It is wholly unlike the attempt of such local agent without authority to waive conditions in a policy subsequently to the time when the contract of insurance has become complete and binding upon both parties, as in Hankins v. Rockford Ins. Co., supra. In other [529] words, under our statute an insurance company cannot, through the aid of a local agent, secure a contract of insurance and the premium therefor, and at the same time disclaim the authority of such agent to waive stipulations in such contract respecting the then existing conditions of or incumbrances upon the property insured to the knowledge of such agent.” In the case at bar the local agent received the premium for insurance, and agreed on behalf of the company that the insurance should be. in force from the time of the receipt of such premium, although the policy was not then issued. Under our statute, we think the agent could clearly bind the company by such a contract. In fact the evidence shows that it was the custom of the company to issue policies upon applications, insuring from the date of the application or of the approval thereof by the committee, and not from the date of the policy, unless in pursuance of some special agreement. The local agent having agreed to insure the plaintiff from the date of his application and the payment of the premium, the company cannot, under our statute, avoid the effect of such agreement for insurance on the ground of a lack of authority to bind the-company by such contract, unless such contract be repudiated by the company before a loss thereunder. By the Court.— The judgment of the circuit court is affirmed.