Insurance Company v. Cain
| Decision Date | 01 October 1877 |
| Citation | 96 U.S. 84,24 L.Ed. 653 |
| Parties | INSURANCE COMPANY v. McCAIN |
| Court | U.S. Supreme Court |
ERROR to the Circuit Court of the United States for the Southern District of Alabama.
This was an action on a policy of insurance issued by the Southern Life Insurance Company, a corporation created by the laws of Tennessee, upon the life of Adam S. McCain, commencing on the tenth day of December, 1868. The insurance was for the sum of $5,000, and was effected by the wife of the insured, for the sole use of herself and children. The policy was received from an agent of the company, one B. F. Smith, who was appointed to solicit applications for policies and collect premiums for a district of country embracing a part of Mississippi and also a part of Alabama, in which the insured resided. To him the first premium was paid. The second premium, due on the 10th of December, 1869, was paid on the 5th, of that month, to his sub-agent, who, before the 10th, handed him the amount, and it was credited in his account rendered to the company in April following. The account disclosed the fact that the amount was received upon the policy in question. After its receipt, no communication was made by the company to the assured that Smith was not its agent at the time of the payment, nor was any objection made to the sufficiency of the payment. The insured died in June, 1870, and this action was commenced in January, 1873, in a State court, and, on application of the defendant, was transferred to the Circuit Court of the United States. The proper preliminary proof of the death of the insured was made, and the case turned upon the sufficiency of the second payment.
The company, in its defence, denied the authority of Smith to receive the premium, contending that his agency had previously ceased, under the rules and regulations of the company, by his accepting the agency of another insurance company; and, further, that its agents were only empowered to collect renewal premiums upon special receipts, sent out from the office of the company for each case, signed by its president and secretary, and countersigned by the agent. The evidence established the existence of such regulations, and tended to show that the agent had resigned his agency previous to the 1st of December. It appeared also that no renewal receipt, signed as required, was given in the case. But the court held, and in substance instructed the jury, that if Smith was the general agent of the company, and as such had authority to bind...
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...but the ineffectiveness of such termination as to assureds who had no notice thereof is well settled. See Southern Life Ins. Co. v. McCain, 96 U.S. 84, 85, 24 L.Ed. 653, 654 (1878); Hall v. Union Indemnity Co., 61 F.2d 85, 91 (8 Cir., 1932), certiorari denied 287 U.S. 663, 53 S.Ct. 222, 77 ......