BROWN v. INSURANCE CO

Jeremiah Smith and Wheeler, for the defendants.

A nonsuit should have been ordered. The advance premium was not paid during the lifetime of the alleged insured. That premium was payable partly in cash and partly by note. Neither part was paid. The cash portion of the premium was not paid in full. The note was never delivered or tendered to the company, or their agent, during the lifetime of the alleged insured. The cash part of the premium was $61.20. There is no pretence that the plaintiff paid more than $50 towards the amount. The only semblance of payment alleged by the plaintiff consists in his relinquishment of a claim against the company to recover back $50 which he had paid on a former policy. But $50 does not pay in full a premium of $61.20. It falls short $11.20. And, even if interest (which the plaintiff never claimed) is allowed on the $50 from the date of the former policy (September 10, 1872) to the date of the policy in dispute (December 31, 1874), the entire amount is only $56.92, still leaving $4.28 of the cash portion of the premium unpaid. The plaintiff does not testify to an agreement with Hodgdon that Hodgdon should pay the balance of the cash premium to the company, and make the plaintiff his debtor for that amount. If that agreement had been made between the plaintiff and Hodgdon, we submit that it would not avail the plaintiff unless carried out by Hodgdon, but would be the mere personal agreement of Hodgdon in his private capacity, for the performance of which the company were not responsible. Buffum v. Fayette M. F. I. Co., 3 Allen 360; Hoyt v. Mutual Benefit L. I. Co., 98 Mass. 539, 544. But no such agreement was made. On the contrary, the plaintiff's testimony is explicit that it was agreed that the first six months premium he had paid Butler, which was $50, "should pay the first six months premium on new one.

But if the sum of $61.20 had been paid, this could not avail the plaintiff, because the alleged insured did not complete the payment of the premium. The delivery of this note to the company or their agent, in the lifetime of the alleged insured, was just as requisite to the effecting of a contract as the delivery of the cash part of the premium. The failure to deliver the note was enough of itself to prevent the completion of the proposed contract of insurance Lewis v. Phoenix M. L. I. Co., 14 Conn. 72. It is admitted that the note was never delivered, nor tendered, during the lifetime of the alleged insured. The fact that it was signed by him is utterly immaterial. Delivery was essential to make the paper a valid note, and until delivery the signer was "under no obligation whatever" by reason of his signature. 1 Pars. Notes and Bills (1st ed.) 48.

The company were not estopped from showing non-payment of premium. A receipt is but an admission, and may be contradicted. Baker v. Union M. L. I. Co., 43 N.Y. 288; Sheldon v. Atlantic Co., 26 N.Y. 460. "There can be no estoppel in behalf of one having full knowledge of all the facts." Brown knew that he had not completed the payment of the premium, and consequently could not have been misled by the receipt. The usage of the company to charge the premium to the agent at the time of sending the policy cannot operate as a payment of the premium by the applicant for insurance, nor as an admission of the completion of the contract. It was a mere private arrangement (of a temporary and provisional nature) between the company and the agent, for the purpose of securing the due payment to the company of all moneys which might thereafter be received by the agent. It could, at the utmost, have only the effect of imposing a conditional penalty on the agent. Third persons could not take advantage of it. Acey v. Fernie, 7 Mee. W. 151. This charge on the company's books was never known to Brown, or relied upon by him.

The plaintiff is understood to claim that the agent, Hodgdon, waived or varied the terms and conditions of contract announced by the company. To this position there are two answers: —

1. The alleged arrangement as to the cash part of the premium was not within the apparent power of the agent, even supposing the policy to have contained no limitation of his authority. Hoffman v. Ins. Co., 92 U.S. 161.

2. Even if the alleged agreement with the agent had been simply for delay, it could not have bound the company. Whatever apparent authority the agent might otherwise have had to make such an agreement was completely taken away by the restriction which the policy made known to the other party. The policy itself gave notice to the applicant that no agent could "make any contract binding the company, nor alter or change any condition of this policy, nor waive forfeiture of this policy." The power of the agent to vary the terms of the contract had been taken away, and the prohibition of the agent's exercise of such a power was made known to the alleged insured. When Brown received the policy, he received notice that it did not constitute a contract of insurance. He knew that he had not paid the premium; he knew that Hodgdon "had no authority to waive prepayment;" and hence he knew that "the policy had not become effectual." There is no doubt of the power of a company to limit the authority of its agent, and there can be no doubt of the effect of such a limitation when notice of it is given to the other party. The following cases sustain the defendants on this point: Davis v. Mass. Mutual L. I. Co., 13 Blatchf. 462; Franklin L. I. Co. v. Sefton, 53 Ind. 380 — S.C., 6 Ins. Law Journal 95; Union Mutual L. I. Co. v. McMillen, 24 Ohio St. 67; Catoir v. Am. Co., 33 N. J. Law 487; Merserau v. Phoenix M. L. I. Co., 66 N.Y. 274.

In Bliss on Life Insurance (2d ed.), s. 298, it is said, — "An agent without authority to contract has authority to waive payment of the premium, and to deliver the policy, giving a credit for the amount, though the policy provides that no policy shall be binding till the premium is paid; and this, even though the policy provides that the agent has no power to waive any condition in it." As authority for this statement, the author cites in a note four cases, viz., Boehen v. Williamsburgh Co., 35 N. Y. 131; Sheldon v. Atlantic Co., 26 N.Y. 460; Wood v. Poughkeepsie Co., 32 N.Y. 619; Post v. AEtna Co., 43 Barbour 351. We have looked at the reports of these cases. In not one of them is there the slightest intimation that the policy contained any restriction upon the agent's power of waiver. On the contrary, in two opinions stress is laid upon the doctrine that the agent's apparent authority cannot be restricted by his secret instructions. Further comment on Mr. Bliss seems unnecessary; but we would just remark, that his statement, even if it had been supported by his authorities, would not cover the present case. The restrictive clause here is not confined to prohibiting the agent from waiving any condition in the policy. It also provides that no agent "shall make any contract binding the company * * * *."

There are other cases where a waiver has been held effective, notwithstanding a clause in the policy restricting the authority of agents. But those cases, so far as we have examined them, are all distinguishable from the present. They maybe divided into three classes: —

1. Cases where the company, by their own dealings with the alleged insured, or by their knowledge and recognition of the agent's dealings, have impliedly assented, or authorized the agent to assent, to the varying of the terms and conditions of the policy. These cases do not apply here. It is claimed that Hodgdon had made agreements for delay in other cases. But it is not shown that his action in this respect was brought to the notice of the company during his agency; and hence there is no room to imply their approval. Any claim which Hodgdon made upon the company after leaving their service is immaterial unless it was acceded to, of which there is no evidence.

2. Cases where the alleged waiver was made by a general agent of the company. These decisions, even if correct, are inapplicable, because Hodgdon was not a general agent, and did not hold himself out as such.

3. Where the policy provides that there shall be no waiver or alteration by any agent unless such waiver shall be indorsed in writing on the policy, it has been held that a verbal waiver by the agent is effectual. But this decision, whether right or wrong, does not affect the present inquiry. In that case the proviso does not prohibit the agent from waiving, but is regarded as merely directing the way or manner in which the waiver shall be evidenced, and hence is not considered matter of substance essential to be strictly followed. But the restrictive clause in the present policy is not a mere formal direction as to the mode of exercising an admitted power. It is an absolute and unqualified prohibition.

Copeland (with whom were Dodge and Edgerly), for the plaintiff.

I. The motion for nonsuit was not seasonably made. Such a motion should have been made at the close of the plaintiff's testimony, and not after. In this case the motion was made after all the evidence had been introduced on both sides. This appears from the order in which the points appear in the case drawn. The burden is upon the defendants to make it appear affirmatively that the motion was seasonably made. It does not "appear" to have been made in season, and "that which does not appear does not exist." The case does not show when the plaintiff stopped. A nonsuit will not be ordered upon evidence introduced by the defendant. The plaintiff has a right to have it weighed by the jury. Pillsbury v. Pillsbury, 20 N.H. 90; Rose v. Learned, 14 Mass. 154; Bowman v. Sanborn, 25 N.H. 108; Oakes v. Thornton, 28 N.H. 44; Prescott v. Hayes, 43 N.H. 598; McGregory v. Prescott, 5 Cush. 67; Page v. Parker, 43 N.H. 363.

II. There was direct evidence of delivery of the policy, and the case shows that the receipt for premium was delivered with it. The policy acknowledged payment of the premium. It was a written admission that the premium had been paid. Sheldon v. Atlantic Co., 26 N.Y. 460. Whether the admission was conclusive or not, it was, at least, prima facie, and a nonsuit could not be ordered. The cases cited by the defendants show that the receipt in the policy is evidence; but he claims that it is not conclusive. But in those cases it is expressly stated that the evidence was not received to render the policy originally void. The acknowledgment may be explained, but not to defeat the policy ab initio. Hodgson v. Marine Ins. Co., 5 Cranch 100; Hemmenway v. Bradford, 14 Mass. 121; Providence Co. v. Fennell, 49 Ill. 180; N. Y. C. I. Co. v. National Ins. Co., 20 Barb. 468; 3 Kent Com. 260; Boehen v. Ins. Co., 35 N.Y. 131; Madison Ins. Co. v. Fellowes, 1 Disney 217; Fire Ins. Co. v. Cashow, 41 Md. 59; Teutonia L. I. Co. v. Mueller, 77 Ill. 22; Same v. Anderson, 77 Ill. 384; Troy Fire Ins. Co. v. Carpenter, 4 Wis. 20; Prince of Wales Ins. Co. v. Harding, El. B. E. 183; Dalzell v. Mair, 1 Camp. 532; De Gaminde v. Pigou, 4 Taun. 246; Anderson v. Thornton, 8 Exch. 425.

The evidence showing that the policy and receipt were delivered and came into the possession of the plaintiff, it was sufficient prima facie evidence of title under them. Reddin v. Shute, 1 Dane Ab. 575; Bliss on Life Insurance (2d ed.) 248; Whitaker v. Salisbury, 15 Pick. 534. Possession of land, chattels, money, notes, bills, and contracts is prima facie evidence of title. Possession of a deed by the grantees is presumptive evidence of a delivery. Canning v. Pinkham, 1 N.H. 353. Thus it follows, that the plaintiff having had possession, the fact of possession is evidence of a lawful delivery, and casts the burden upon the defendants to attack it. The plaintiff submits that for the foregoing reasons a nonsuit should not have been ordered.

III. The evidence showed that Hodgdon was agent. There was no evidence that he had not all the power of a general agent. In the absence of such evidence an agent is presumed to have full powers. Methuen Co. v. Hayes, 33 Me. 169. That notwithstanding the limitation in the policy pre-payment may be waived by a general agent, is sustained by the adjudged cases; and we repeat, that the presumption is that H. had all the powers of a general agent. The assent or authority may be implied, and, like all other questions, it may be implied or inferred from the circumstances. It may be inferred from the previous dealings. In this case the dealings with the defendants' agents, Butler, Merrill, and Hodgdon, were all competent evidence upon that point. All either made, or offered to make, some deductions from premiums. 2 Kent Com. 614-615; 2 Gr. Ev., s. 65; 1 Hare W. 398-404. The evidence as to the usage of Hodgdon was competent on the question of authority. Baxter v. Massasoit Ins. Co., 13 Allen 320; Kent v. Tyson, 20 N.H. 125; Wendell v. Abbott, 45 N.H. 350-353.

IV. The failure to deliver Hodgdon the premium note did not invalidate the policy. The note was made by R. Brown, the assured, and left by him with A. H. Brown, by the direction of the defendants' agent. The possession of A. H. B. was the possession of the defendants. It was just where the defendants' agent directed it to be. Sheldon v. Ins. Co., 25 Conn. 207; Mayo v. Pew, 101 Mass. 555.

V. The custom of the defendants to charge Hodgdon with the premiums at the time of sending policies was evidence tending to show his authority to give credit, make discounts, and accept payments as he pleased. He was the debtor of the company for the premium. He had both commissions and salary. He was not bound to send to the defendants the specific money received by him from any policy. Whatever he received during the month, so far as was necessary to pay him his salary, he received for himself. He made payments on account in gross. He could pay from the money received from policy-holders, or from other funds. Suppose, during a given month, he received money from ten policy-holders; that his commission and salary amounted to all he received from three of them: he could lawfully retain for his own use the amount received from those three; and, if he could lawfully retain it, he could lawfully loan or give the whole or any part to the assured. The doctrine contended for by the defendants would invalidate all the policies, both fire and life, where the agents had in whole or in part discounted their commissions to the assured. By charging the premium to the agent, the agent was thereby authorized to give credit: by the custom, the premium was treated as paid to the company: they could appropriate any sums due the agent for salary and commissions to its payment. Sheldon v. Ins. Co., 25 Conn. 207; Train v. H. P. Ins. Co., 62 N.Y. 598.

It is not contended that the company may not, notwithstanding the notice, authorize an agent to waive prepayment; — whether or not they have, as a question of proof, any fact or circumstance tending to show authority or acquiescence, is admissible. The notice does not change the law of evidence or the law of agency. An agent, who is authorized to waive conditions, may still do so; the company may still authorize him to do so; they may impliedly, by acquiescence, be held to have assented to his usage in doing so. That an agent authorized to deliver a policy is authorized to waive prepayment, is sustained by the following authorities: Ins. Co. v. Colt, 20 Wall. 560; Marsh v. N.H. Ins. Co., 3 Bliss 351; Sheldon v. Ins. Co., 26 N.Y. 460; Boehen v. Ins. Co., 35 N.Y. 131; Hodsdon v. Guardian Ins. Co., 97 Mass. 144; Chickering v. Ins. Co., 116 Mass. 321; Lycoming Co. v. Schollenberger, 44 Pa. St. 259; Heaton v. Manhattan Co., 7 R. I. 502; Rix v. Mutual Ins. Co., 20 N.H. 198; O'Reilly v. Co., 3 N. Y. (S.C.) 487; Shear v. Phenix Co., 4 Hun 800; Buckbee v. U.S. Co., 18 Barb. 541; Helme v. Philadelphia Ins. Co., 61 Pa. St. 107; Thompson v. St. Louis Co., 15 Mo. 279; Mutual Co. v. Robertson, 59 Ill. 123; Mayer v. Mutual Ins. Co., 38 Iowa 304.

VI. The notice in the policy could not affect the plaintiff's rights in transactions before notice was given; there was no such notice in the transactions with Butler, none in the application made to Butler, no such notice in the policy procured through Butler, and none in the correspondence with Morrill. Having once had a policy issued by the defendants before he commenced negotiating with Hodgdon, he had a right, in the absence of notice, to suppose that the policy to be issued through Hodgdon would be similar in its conditions. The amount of premium was fixed and accepted as paid by Hodgdon before notice. The $50 was received and adjusted by Hodgdon, and agreed by him to be in full of the six months premium before notice. The policy was delivered unconditionally before, and whatever effect the notice in the policy may have had upon future transactions, it would have none upon those already past, prior at least to the delivery of the policy; and, including the delivery, the plaintiff had a right to presume that Hodgdon had all the authority he exercised, and giving notice then did not limit the effect of his acts already past.