Critchett v. Am. Ins. Co.
| Decision Date | 22 April 1880 |
| Citation | 53 Iowa 404,5 N.W. 543 |
| Parties | CRITCHETT v. THE AMERICAN INSURANCE COMPANY. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Mahaska district court.
Action upon a policy of insurance. The defendant alleges that the plaintiff was in default at the time of the loss, by reason of the non-payment of an instalment of the premium. For a portion of the premium the company had taken the plaintiff's note, whereby he had obligated himself to pay the company three dollars, upon the first day of November, 1876, and the same amount upon the first day of November in each of the three succeeding years.
The policy contained a provision in these words: “If default shall be made by the assurred in the payment of any instalment of premium upon the instalment note given for this policy for the space of 30 days after such instalment shall become due by the terms of such note, then this policy shall be null and void, and this company shall not be liable to pay any loss happening during the continuance of such default in payment of such instalment, but on payment by the assured or his assigns of all instalments of premium due under this policy, or upon the instalment note given therefor, the liability of the company under the policy shall attach, and this policy be in force as to all losses happening after such payment, unless it shall be inoperative from some other cause.” The instalment falling due November 1, 1876, was not paid. The loss occurred March 9, 1877. There was a trial by jury, and verdict and judgment were rendered for the plaintiff. The defendant appeals.Lafferty & Johnson, for appellant.
John F. Lacey and M. E. Cutts, for appellee.
The plaintiff claims that he was not in default at the time the loss occurred, notwithstanding the nonpayment of the instalment which, by the terms of his note, fell due on the first day of November, 1876. He claims that the company had extended the time of payment. As evidence of such extension, he testified that one Kennedy, the agent of the company at Oskaloosa, near where he resided, agreed with him, after the instalment became due, to extend the time of payment until he (plaintiff) should receive a certain pension; that he received his pension March 8, 1877, and on the same day went to Kennedy's office to pay the instalment due upon his insurance note, but did not find him, and the next day, about 4 o'clock in the afternoon, the property insured was destroyed by fire.
The defendant denies that any agreement for extension was made between the plaintiff and Kennedy, and introduced Kennedy as a witness, who testified that none was made. Upon this point the jury found against the defendant, and, the evidence being conflicting, their finding must be taken as conclusive. But the defendant insists that, conceding that Kennedy agreed to an extension, the defendant would not be bound by it, because Kennedy had no authority to bind the company in that respect; and further, if he had, that the plaintiff cannot recover because the loss occurred after the time as extended, and the plaintiff had not paid even then. Kennedy's authority was shown by the certificate of his appointment, introduced in evidence. From it it appears that he was authorized to receive applications for insurance, and collect and transmit premiums. Kennedy testified that he was not authorized to issue policies, and it is not pretended that he was.
The court instructed the jury, in substance, that the plaintiff would be entitled to recover if they found that Kennedy agreed to extend the time of payment, and that the loss occurred within such time. The giving of this instruction is assigned as error.
According to the terms of the policy the company ceased to carry the risk at the end of 30 days from the time the instalment became due. If the company continued to carry it it was by reason of a contract not contained in the policy, and that contract must have been the alleged contract with Kennedy. Now, what precisely was that contract, taking the plaintiff's statement as to what it was? He says: “He (Kennedy) agreed he would give me time to get my pension.” From this it will be seen that Kennedy did not undertake to contract that the company would, without payment, continue to carry the risk after it had ceased by the terms of the policy. It is doubtful, indeed, whether he even meant to bind the company not to enforce payment of the instalment before plaintiff could get his pension. The words do not necessarily mean more than that he would not himself enforce it. But we are of the opinion that if Kennedy had expressly contracted that the company should carry the risk, without payment, after it had ceased by the terms of the policy, such contract would not have bound the company.
There is no pretence that Kennedy had any express authority to bind the company by any contract whatever. He belonged to an extensive and well recognized class of insurance agents, from whom the power to make contracts is withheld. If he had the power to contract in the name of the company to carry the risk without payment, after it had ceased by the terms of the policy, it is because the law would imply such power from the fact that he was authorized to collect and transmit premiums. But an agent employed to collect a claim does not thereby have authority to bind his principal even to grant an extension of time. Hutchings v. Munger, 41 N. Y. 155;Kirk v. Hiatt, 2 Carter, (Ind.) 322; Coming v. Strong, 1 Carter, (Ind.) 329. Still less would such agent have authority to bind his principal by a contract of insurance.
We have seen no case where the doctrine contended for by plaintiff has been held. We do not say that where a policy is delivered by an agent without the prepayment of the premium it will not take effect even though the agent have no authority to pass upon and accept the risk, and even though the policy provides that it shall not take effect unless the premium is prepaid. Where an agent is entrusted with a policy for the purpose of delivering it, and does deliver it, though in violation of a provision of the policy as to prepayment, it has been held that the assured has a right to assume that prepayment has been waived. Young v. Hartford Fire Ins. Co. 45 Iowa, 377;Bowman v. Agricultural Ins. Co. 59 N. Y. 521;Mississippi Valley Ins. Co. v. Neyland, 9 Bush. 430;Sheldon v. Conn. Ins. Co. 25 Conn. 9. But the waiver rests, not simply upon something said by the agent, which could be construed into an agreement of waiver, but upon something done by the agent which he was employed to do. The authorities all agree that a mere agreement to waive prepayment will not put a policy in force where it is not delivered. It is, therefore, the delivery of the policy which constitutes the ground of waiver.
It is true that in Hallock v. Commercial Ins. Co. 2 Dutcher, 268, a recovery was allowed, although the premium had not been paid, nor the policy delivered. But the agreement for the insurance had been made and the premium tendered, which the agent declined to receive because the policy was not made out. In Trustees of Baptist Church v. Brooklyn Ins. Co. 19 N. Y. 305, there was a parol contract for a renewal, but no payment of the renewal premium. It was held that the plaintiff was entitled to recover. That case was substantially like the case at bar, except that the contract was made by the officers of the company, and not by an agent. The principle decided, therefore, was materially different. Nor does the case at bar come within the rule held in Viele v. Germania Ins. Co. 26 Iowa, 9. That was a case where the risk was increased by the act of the assured contrary to the provisions of the policy. It appeared, however, that the agent assented to the use of the premises, by reason of which the risk was increased. Such assent was held to be a waiver of the forfeiture.
The doctrine of that case is unquestionably correct, but it rests upon the fact that the agent is made the judge as to whether a given use is an increase of risk or not. Mr. Justice Beck, who wrote the opinion, said:
In our opinion there is nothing in this doctrine that affords support to the proposition that an agent who has not the power to make the contract of insurance can bind the company by his contract to an indefinite postponement of the payment of a renewal premium, and keep the policy in force in contravention of its provisions. In Bonton v. The American Mutual Life Ins. Co. 25 Conn. 542, the premium was actually paid to the agent, though after the day it fell due. It was held that though the agent had power to make the contract of insurance, and had power to receive the premium when due, he had no power, without an express authorization, to bind the company by receiving it after it was due. Substatially the same doctrine was held by implication in Ins. Co. v. Norton, ...
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