London Guarantee & Accident Co. v. Missouri & Illinois Coal Co.

REYBURN, J. (after stating the facts as above) — Prom the preceding recapitulation of the facts, it is obvious that the sole question in issue was the premium rate to be paid. An eminent author, in his treatise upon the law of fire insurance, which is recognized as a leading authority upon the subject, enunciates the rule, that in order to create a valid contract of insurance the following elements must coexist, namely: the subject-matter, to which the policy is to attach; the risk insured [545] against; the amount of indemnity definitely fixed, the duration of the risk and the consideration to he paid for the insurance agreed upon. Wood, Fire Ins., 1 vol. (2 Ed.), sec. 5. This court, in Worth v. Ins. Co., 64 Mo. App. 583, approved and adopted the foregoing rule. The appellant with plausible, if not convincing, reasoning submits that the respondent has failed to establish a contract of insurance embracing the concurrence of these essential conditions, but it is content to waive such position, if tenable and confine its reliance for reversal to the proposition that the rate of premium was established at forty cents per $100 of the pay roll. The ultimate question, sharply defined and controlling this controversy, is whether the sub-agent, Moreton, had authority to modify the terms of the proposed contract by a reduction in the rate of the insurance premium. A.s a general rule such indemnifying agreement is perfected and becomes valid, upon the acceptance, by the company, of the application by the insured, and the execution of the policy embodying the contract. Keim v. Ins. Co., 42 Mo. 38. The policy issued to appellant by respondent conformed to the application, and by its provisions the latter constituted a part of the policy, and both were based upon the higher premium rate, at which the cash installment was computed, and paid by appellant without protest or comment. If, therefore, the contract was not consummated at the rate fixed, alike by the application and the policy issued thereunder, the original proposition was impliedly abandoned or declined by respondent, and a counter and new proposition, differing from the contract first contemplated by the parties in the material respect of a substantial reduction of the premium rate, was submitted to appellant and accepted by it, and the question is resolved into the inquiry whether More-ton either was deputized with the express power, or was held out by respondent to have the authority to negotiate, consummate and substitute such new agreement in lieu [546] of the first contract. There is no room to infer from the evidence, that any snch right to so obligate respondent existed, unless by implication resulting from the conduct of respondent. No such authority could justly be deduced from the mere knowledge by Webb, that More-ton was acting as a sub-agent under Case, soliciting risks for respondent, or that risks, accepted by the respondent through Webb, had been secured by Moreton. No issue is presented affecting the range of the authority of Case, express or implied, for there was no proof that Moreton had any authority to sign Case’s name to the letter, and the letter is entitled to no greater weight or consideration than if it bore Moreton’s signature alone. The ultimate test is not whether Moreton had power to modify the terms, or waive performance of conditions of a pre-existing contract, but the issue is whether Moreton was authorized to set aside, and ignore the premium rate named in appellant’s application, formally accepted by and carriéd into the policy delivered to appellant, and substitute a much lower rate. If Moreton’s agency was sufficient to warrant a departure from the provisions of the policy by a reduction of the premium rate, then his power could not be denied to vary the terms of the contract in any other material direction, and not merely modify a single provision, but deviate therefrom as far as he chose, and in effect obligate the plaintiff to any form of liability he saw fit to impose. ■ It may be conceded, as appellant contends, that the courts of this State have construed the authority of agents of foreign insurance corporations quite broadly, and even to the length of transmitting a greater measure of power than possessed by agents of companies organized in this State. Schmidt v. Ins. Co., 2 Mo. App. 339; Franklin v. Ins. Co., 42 Mo. 456; Burdick v. Ins. Co., 77 Mo. App. 629. Nor has been disregarded the full extent, to which the scope of the agency of general agents of insurance companies has been expansively interpreted by the courts of this State, in the decisions cited by appellant, [547] and other eases that might be invoked; amongst the latest additional expressions of the appellate courts, the cases of Ross-Langford v. Ins. Co., 97 Mo. App. 79, and Thompson v. Ins. Co., 169 Mo. 12, may be adverted to, in both of which, after elaborate discussion and review of the authorities, it was ruled that insurance corporations like individuals, may by parol or in writing, modify or enlarge the powers of their agents, or by their conduct and course of business dealings estop themselves from denying the power of such agents to waive forfeitures, proofs and the like, notwithstanding limitations of authority in the appointments, and in general, that the acts of the insurance agent will bind his principal within the bounds of the apparent authority, which the company appears to have committed to him. But these cases relate to existing contracts, the original validity of which were not impeached or assailed, and an examination of this line of authorities will also reveal that the agents whose conduct was relied upon as waiving the requirements of the policies, are usually policy-writing or general agents of the companies affected. We have found no decision, nor have we been referred to any case in this State or elsewhere, holding that an agent of such circumscribed power may alter or waive conditions of such a contract. The person whose action is here involved, is not declared to have either the title or powers of a policy-writing or general agent; the record discloses that his duties extended no farther than to solicit risks and deliver policies, and that he manifestly had no right to pass upon applications, countersign or issue policies, nor even to collect the accruing premiums. Given the greatest weight deserved, the title in the letter-head was but a circumstance to be considered in connection with the other evidence, and not a fact conclusive of unlimited authority. The power of a principal, corporate or individual, to restrict the authority of an agent, and to define the limits of his agency has been recognized and upheld by the courts of this State in Lama v. Ins. Co., [548] 51 Mo. App. 447; and in what is probably the most recent case upon the subject from the Supreme Court, the opinion expressly disavows that the rule alluded to above and now firmly established in this State, as well as other States, impairs the power of the principal to limit the authority of his agent, and expressly disclaims that it tends to bind the principal for the unauthorized acts of the agent in excess of the power conferred, but declares, on the contrary, that it holds the principal liable only so far as he has made himself responsible, but measures the responsibility of the principal for the acts of the agent, not alone by the terms of the original power but also by subsequent express authority or powers implied from the conduct of the principal or of his agent, with his knowledge, and from their course of business with third persons, which estop the principal from repudiating the right of the agent to perform the particular act relied on, although the power to take such action was not only not conferred but expressly denied by the terms of the original agency. Thompson v. Ins. Co., 169 Mo. 12. The eighth finding of facts by the trial court is to the effect that the clause of the policy fixing the premium rate at sixty-five cents per $100 of wages, was never waived or altered by the parties. This finding, as well as those anterior, imports that the court found against the theory that Moreton had been held out by the insurance company as an agent with power to do more than solicit insurance and deliver the policies therefor. This conclusion finds abundant support in the evidence, although the testimony might be deemed conflicting, and will not be distrubed. The judgment is affirmed. Bland, P. J., and Goode, J., concur.