Anderson v. Nw. Fire & Marine Ins. Co.

• Decision Date: 06 December 1924
• Citation: 51 N.D. 917,201 N.W. 514
• Parties: ANDERSON v. NORTHWESTERN FIRE & MARINE INS. CO.
• Court: North Dakota Supreme Court

51 N.D. 917

201 N.W. 514

ANDERSON

v.NORTHWESTERN FIRE & MARINE INS. CO.

Supreme Court of North Dakota.

Nov. 1, 1924.

Rehearing Denied Dec. 6, 1924.

Syllabus by the Court.

A person in this state, licensed as an insurance agent by the commissioner of insurance, who solicits insurance in behalf of a foreign insurance company, or transmits applications for a policy of insurance, or collects a premium, or in any manner aids in doing either, or in transacting business of a like nature, is, under section 4959, C. L. 1913, an agent of the insurance company to all intents and purposes, and may enter into an oral agreement to renew a policy of fire insurance which contains a stipulation that it may be renewed on the same conditions if the hazard has not increased, and such oral agreement is binding on the corporation, notwithstanding the original policy had expired several days before the renewal agreement was made.

Section 4959, C. L. 1913, controls contrary stipulations in the policy.

Appeal from District Court, Ramsey County; A. G. Burr, Judge.

Action by Julius Anderson against the Northwestern Fire & Marine Insurance Company. From a judgment for defendant, plaintiff appeals. Reversed, and new trial granted.F. R. Stevens, of Crary, and W. M. Anderson, of Devils Lake, for appellant.

Fowler, Green & Wattam, of Fargo, for respondent.

JOHNSON, J.

This is an action in which the plaintiff seeks to recover under an insurance policy which he claims was renewed. The policy was dated February 24, 1920, for three years, covering certain property. The plaintiff alleges that on or about the 14th of March, 1923, it was agreed between him and an agent of the defendant that the policy should be renewed for a period of three years upon the same terms and conditions and for the same premium as the original policy; that on the 15th of March, 1923, the property covered in the policy was destroyed by fire; and that the defendant had refused to make an adjustment or pay the loss, pursuant to the contract. The defendant answers, denying in substance that the policy was renewed; and alleges that the agent alleged to have entered into the renewal agreement was “only authorized to transmit to this defendant applications for insurance, and that insurance upon said class of property could only be issued by the home office of the defendant corporation. Defendant further alleges that no application for insurance on the part of the plaintiff was ever transmitted to defendant corporation at any time subsequent to February 24, 1923.”

At the trial, plaintiff called one Kavanaugh for cross-examination under the statute on the theory that he was an agent, or a managing agent, of the defendant, with offices at Crary in this state. It was he who made the alleged renewal agreement. Kavanaugh testified that he held a license from the commissioner of insurance, as agent of the defendant at Crary; that he had been acting as local agent of the company for 20 years; that his duties as agent were “to solicit insurance, to take applications and issue polices on city property, and to take applications for farm property,” and to accept premiums paid and remit the proceeds, less his commissions. Witness was then shown Exhibit 2, being the policy of insurance dated February 24, 1920, issued to the plaintiff, and, after identification, it was offered and received in evidence. The policy bears upon its back the indorsement “M. D. Kavanaugh, Agent, Crary, N. D.” The policy is also countersigned by the same person as agent, the countersignature being dated February 25, 1920. The concluding sentence of the policy is that “this policy shall not be valid until countersigned by the duly authorized agent of the company at Crary, N. D.” The application on which the policy was issued is dated February 23, 1920, and the policy stipulates that the insurance runs from the 24th of February, 1920, at noon, until the 24th of February, 1923, at noon. The policy contains this provision:

“In any matter relating to this insurance, no person, unless duly authorized in writing, shall be deemed the agent of this company. This policy may by a renewal be continued under the original stipulation, in consideration of premium for the renewal term, provided that any increase of hazard must be made known to the company at the time of renewal, or this policy shall be void.”

When the policy was issued, the premium was not paid until some time in June following, by agreement between the agent and the insured. Plaintiff testified that on the 14th of March, 1923, the agent Kavanaugh called at his home, and that there was some conversation with reference to the policy. The court did not permit the plaintiff to state this conversation, on objection being made thereto by counsel for the defendant. The main objection was that the agent did not have authority, with respect to the class of insurance involved, to bind the company by any conversation, and that until the authority was shown the conversation was hearsay and incompetent. Kavanaugh was then recalled and testified that he had received a notice from the company some time before he called at the home of the plaintiff, in which they asked him, with reference to the policy, “May we expect a renewal?” or words to that effect. The plaintiff made several efforts to prove the conversation between the agent Kavanaugh and the plaintiff, in which it was claimed that the policy was renewed, but on objection the court did not permit the conversation to be shown either by the plaintiff himself or through the cross-examination, under the statute, of the witness Kavanaugh. The plaintiff thereupon made several offers of proof. Plaintiff Anderson offered to prove the delivery to him of the policy which expired on the 24th of February, 1923, and the amount of the insurance; that on the 14th of March, the agent, Kavanaugh, visited the plaintiff's residence, “informed him that his policy had expired, and asked if he did not want him to renew the same. The plaintiff said that he would on the same terms and conditions as the policy contained; that the said agent then agreed to renew said policy”; that the property was destroyed by fire on the 15th of March, and that the defendant had refused to make any settlement on account of the loss. The plaintiff further offered to prove through the agent, Kavanaugh, substantially the same facts with reference to the alleged agreement of renewal, pursuant to the conversation on March 14, 1923. In addition, through this witness, plaintiff offered to prove that the agent agreed to waive the condition of the policy that the premium be paid in cash, but had agreed to extend payment thereof until the month of June, 1923, and that upon the said proposition having been made to the plaintiff, he accepted the same and renewed the policy. Other offers of proof were made, not material to be noticed in the view we take of the case. The court excluded the offers tending to show the agreement to renew and instructed the jury, in substance, that recovery could not be had unless the authority of the agent Kavanaugh to renew the policy after it expired was established, but that there was no evidence showing such authority. The jury returned a verdict for the defendant, and the plaintiff appeals.

[1] Numerous errors are assigned, but it is not necessary to discuss them in detail. The case turns upon the sufficiency of the evidence, and the offer of proof to make an issue of fact for the jury, as establishing authority in the agent, Kavanaugh, to enter into an agreement to renew the policy which expired by its terms on February 24, 1923. The defendant contends that the policy expired on February 24; that thereafter it could not be renewed; that a new application would have to be made and acted on by the home office; and that the agent had no authority to bind the company by agreeing to a renewal after the policy had expired.

[2] Section 4926, C. L. 1913, provides that:

“No insurance company shall do business in this state, except through its authorized agents who must be residents of and have their office or place of business in this state. All policies not written in accordance with the foregoing provisions shall be deemed a violation of this article.”

Section 4959, C. L. 1913, reads as follows:

“Whoever solicits insurance on behalf of any insurance corporation or person desiring insurance of any kind, or transmits an application for a policy of insurance, other than for himself, to or from any such corporation, or who makes any contract for insurance, or collects any premium for insurance, or in any manner aids or assists in doing either, or in transacting any business of like nature for any insurance corporation, or advertising to do any such thing, shall be held to be an agent of such corporation to all intents and purposes, unless it can be shown that he receives no compensation for such services. This section shall not apply to fraternal, assessment or beneficiary associations.”

It will be noticed, first, that no insurance company may transact business in this state except through resident agents; secondly, that any person who solicits insurance in behalf of any company or transmits an application for a policy for a person other than himself, or who makes any contract for insurance, or who collects any premium for insurance, or who in any manner aids or assists in doing either, or in transacting any business of a like nature for an insurance corporation, is an agent of such company “to all intents and purposes,” unless it appears that he receives no compensation for the service. The evidence and the offer of proof, if true, clearly show that Kavanaugh was a resident agent of the defendant; that he solicited insurance, transmitted applications, collected premiums, and otherwise transacted an insurance business for and in behalf of the defendant. Under the statute, therefore, he would be an agent of the defendant “to all...