German Ins. Co. v. Independent School Dist. of Milford, Dickinson County, Iowa

• Decision Date: 12 April 1897
• Docket Number: 860.
• Citation: 80 F. 366
• Parties: GERMAN INS. CO. OF FREEPORT, ILL., v. INDEPENDENT SCHOOL DIST. OF MILFORD, DICKINSON COUNTY, IOWA.
• Court: U.S. Court of Appeals — Eighth Circuit

80 F. 366

GERMAN INS. CO. OF FREEPORT, ILL., v. INDEPENDENT SCHOOL DIST. OF MILFORD, DICKINSON COUNTY, IOWA.

No. 860.

United States Court of Appeals, Eighth Circuit.

April 12, 1897

George F. Henry, for plaintiff in error.

J. W Cory, for defendant in error.

Before SANBORN and THAYER, Circuit Judges, and LOCHREN, District Judge.

LOCHREN District Judge.

The plaintiff below, an Iowa school-district corporation recovered judgment against the defendant, a fire insurance company of Illinois, upon an alleged oral contract of insurance, claimed to have been made September 17, 1894 whereby the defendant, through its authorized agent, for the premium of $56.25, then in the hands of such agent, insured the plaintiff's schoolhouse and contents and appurtenant buildings from loss by fire in amounts aggregating $2,500 for the term of five years from October 11, 1894, at noon, when a previous written policy of the defendant company, covering the same schoolhouse, but with some differences as to the other property, would expire. Up to November 2, 1894, when said schoolhouse and all the property so claimed to have been insured, was wholly destroyed by fire, said agent had neglected to report such insurance to the defendant, and had not obtained or delivered any written policy of such insurance. Blackert, the agent of defendant, with whom, as such agent, the oral contract of insurance was alleged to have been made, was at the same time one of the directors of the plaintiff school district, and the ruling by the circuit court that this fact did not disqualify him from binding the defendant by such contract is claimed as error.

The rule that an agent cannot bind his principal by contract when the agent is personally, or as representing another interested adversely in the subject-matter, is founded upon plain reason, and is applied whenever the adverse interest of the agent is real and substantial, presenting a temptation to the agent to sacrifice the interest of the principal. But a merely nominal interest, offering no such temptation, will not disqualify the agent. 1 Mor.Corp. § 521; Northrup v. Insurance Co., 48 Wis. 420, 4 N.W. 350. Blackert was not, as school director, personally interested in the property insured, more than any other resident of the district. The power of an agent of an insurance company to bind his principal by a contract of insurance covering the public buildings of a municipality wherein the agent resides would not be questioned. In this case the board of directors, of which Blackert was but one, by vote at a regular meeting selected and empowered its president to act for the district in making the contract of insurance. Blackert acted solely as agent of the defendant, and was...