Greenough v. United States Life Insurance Co

• Decision Date: 02 May 1922
• Parties: EDWARD GREENOUGH, JR. v. UNITED STATES LIFE INSURANCE CO
• Court: Vermont Supreme Court

117 A. 332

96 Vt. 47

EDWARD GREENOUGH, JR. v. UNITED STATES LIFE INSURANCE CO

Supreme Court of Vermont

May 2, 1922

February Term, 1922.

ACTION FOR TORT to recover for fraud of defendant's agent. Plea the general issue. Trial by court, Special Term, July, 1921 Chittenden County, Chase, J., presiding. Judgment for plaintiff. The defendant excepted. The opinion states the case.

Judgment affirmed.

Charles F. Black for the defendant.

Warren R. Austin and Allen Martin for the plaintiff.

Present WATSON, C. J., POWERS, TAYLOR, MILES, and SLACK, JJ.

OPINION

SLACK

This is an action to recover damages occasioned by the fraud of defendant's servant. Judgment was rendered for plaintiff on facts found by the court and the case comes here on defendant's exceptions. The exceptions briefed are to certain of the findings, to the failure of the court to find as requested, and to the judgment.

The defendant is a life insurance company. It appears from findings not excepted to, that, at the time the acts complained of were committed, one William J. Power was in the employ of defendant and acting as its agent in this State; that, while defendant never expressly gave Power the title of state manager, he held himself out to the plaintiff and to the public as such, and defendant knew, or ought to have known, that fact; that, by allowing him to do this, defendant gave plaintiff reason to believe, and he did believe, that Power represented defendant in the capacity of managing its business in this State; that Power had authority under his contract with defendant to employ subordinates to solicit insurance and collect premiums, and was required to take a bond from each subordinate who was permitted to collect premiums, conditioned for the faithful performance of such subordinate's duties, which bond was to run to Power and was to be assigned by him to defendant; that on September 14, 1920, plaintiff, in response to a newspaper advertisement, wrote the U.S. L. Co. (which meant defendant), Burlington, Vermont, applying for a position, and in reply received an application blank from Power; that the day following, plaintiff, at the request of Power, called at defendant's office in Burlington where he met Power for the first time; that Power then told plaintiff that he was defendant's state manager for Vermont and gave plaintiff his business card from which it appeared that he was defendant's state manager for Vermont and northern New York; that Power, acting within the scope of his authority from defendant, then and there employed plaintiff as a subordinate to solicit insurance and collect premiums, in accordance with the terms of a written contract entered into between them; that this contract was not on the blank which defendant furnished Power to be used in such cases, but was on a form prepared by Power, and contained a provision for a cash bond, so-called, a provision not in the form furnished Power by defendant; that Power used the form prepared by him without the authority or knowledge of defendant; that during the negotiations which resulted in the contract between Power and plaintiff, Power represented to plaintiff that defendant required a cash bond, for reasons stated by him, and that it would not accept any other bond, all of which Power knew to be false; that relying upon this representation, and because of it believing the defendant in fact required him to make a cash deposit, and in order to obtain employment, the plaintiff procured a draft for one thousand dollars, which was equivalent to cash, and delivered it to Power and took his receipt therefor; that in turning this money over to Power, plaintiff thought he was complying with the regulation of defendant concerning a bond; that defendant did not receive any part of this money, and did not know Power had taken it from plaintiff until it received a letter from the latter in October, 1920; that it then took steps, immediately, to terminate its contract with Power; that soon after, Power converted the entire amount to his own use.

The following findings were severally excepted to on the ground that they were not supported by the evidence:

1. "The plaintiff believed, and from the way in which the defendant permitted Power to hold himself out as its representative, had reason to believe, that statements made by Power as to his employment and what he had to do to obtain employment were the same as though made by the defendant. He also took the receipt believing that his money was being taken in behalf of the defendant in accordance with its requirements."

2."The plaintiff would not have intrusted his money to Power if he had not believed that in doing so he was intrusting it to the defendant. "

3. "In employing the plaintiff and taking his money instead of a bond, Power was acting in part to further the business of the defendant by securing a subordinate to solicit insurance and collect premiums for it whose cash deposit could be held to make up any shortage which might result from such subordinate's failure to account for premiums collected, and in part to serve a purpose of his own which was to get the possession and control of the plaintiff's money to enable him to convert it to his own use if he saw fit to do so."

It is not our province to weigh the evidence, in considering these exceptions. The findings must stand if supported by substantial evidence. Gilbo & Swartz v. Merrill's Est., 92 Vt. 380, 104 A. 10, L.R.A. 1918F, 387.

We think there is evidence to support the first two findings. As to the third finding, the evidence tends to show that in hiring plaintiff to solicit insurance and collect premiums Power was acting within the scope of his employment and in furtherance of defendant's business. Indeed, defendant practically admits this in its brief. But there is no evidence to support that part of the finding that Power was so acting in taking plaintiff's money instead of the required bond. That the cash deposited "could be held to make up any shortage which might result from such subordinate's failure to account for premiums collected" is, of course, true. But that that was "in part" what Power took it for is purely conjectural. He could have secured plaintiff's services as readily by taking the required bond as by...