Hartford Accident & Indem. Co. v. Lougee

• Citation: 196 A. 267
• Parties: HARTFORD ACCIDENT & INDEMNITY CO. v. LOUGEE et al.
• Decision Date: 04 January 1938
• Court: New Hampshire Supreme Court

196 A. 267

HARTFORD ACCIDENT & INDEMNITY CO.

v. LOUGEE et al.

Supreme Court of New Hampshire. Strafford.

Jan. 4, 1938.

Transferred from Superior Court, Strafford County; Lorimer, Judge.

Proceeding by the Hartford Accident & Indemnity Company against Walter S. Lougee and others. The case was transferred to the Supreme Court on plaintiff's exceptions.

Judgment for plaintiff.

Petition, for a declaratory judgment, and brought to determine whether the plaintiff is chargeable as an insurer of the defendant Lougee's liability to the other defendants for his negligent operation of an automobile. For convenience he is herein called the defendant. The court (Lorimer, J.) found that insurance was in force as the result of a transaction between the defendant and an agent of the plaintiff who it was found had real or apparent authority to represent the plaintiff in the transaction. Rulings and other findings were made in support of the general conclusion. The plaintiff filed a bill of exceptions and the questions of law raised by it are transferred. So far as consideration of the exceptions is required, the pertinent rulings and findings appear in the opinion.

Hughes & Burns, of Dover (Stanley M. Burns, of Dover, orally), for plaintiff. Cooper & Hall, of Rochester, Errol S. Hall, of Farmington, and Leonard C. Hardwick and Guy Smart, both of Rochester (Gardner S. Hall, of Rochester, orally), for defendants.

ALLEN, Chief Justice.

I. The plaintiff requested rulings relating to the burden of proof and to the effect that it rested generally on the defendants, under the authority of Travelers Ins. Co. v. Greenough, 88 N.H. 391, 190 A. 129, 109 A.L.R. 1096. No rulings in respect thereto were made unless by somewhat doubtful implication, but the plaintiff was entitled to none in its favor. It voluntarily assumed the ordinary position of a plaintiff in opening the case and accepted the order for its closing. It thereby assumed the burden of proving it had not insured the defendant instead of requiring that action be taken in assertion of the claim of insurance. Travelers Ins. Co. v. Greenough, supra, 88 N.H. 391, 393, 190 A. 129, 109 A.L. R. 1096. It sought to make out a case of nonliability rather than to defend against a claim that it was liable. The trial was conducted with this apparent understanding by the court and all parties. It would be unfairly inconsistent for the plaintiff to take the advantages of the order of proceeding in the trial without submitting to the normally attendant burdens.

In Travelers Ins. Co. v. Greenough, supra, the only question raised was the result of a finding of equally balanced conflicting evidence on a decisive issue. The procedural course of the trial was not presented as a matter affecting the burden of proof, and the proper rule of the burden was therefore considered without regard to the order of introducing evidence. Here the question is whether the benefit of the rule was waived or lost by a course of the trial not only accepted without objection but apparently assumed as a matter of right.

II. The court found that one Canney had the "real or apparent" authority of a general agent for the plaintiff to insure. He undertook to insure the defendant for a longer period than was allowed without issuing a policy. Whether any insurance agent, general or special, may thus act without more definite and explicit authority to do so than is shown by his appointment as such an agent, seems extremely doubtful. No express terms of authority to do business in such a manner were given by the plaintiff to the agency with which Canney was connected or to him. But, as it is thought to be helpful in passing upon the issue of apparent authority, the character of Canney's position as an agent has received attention.

The claim advanced in support of his position as a general agent is based upon the statutes relating to licenses to insurance agents and upon the plaintiff's application for him to be licensed. By Laws 1913, c. 78, § 1, the insurance commissioner under specified conditions was required, upon written notice by a foreign insurance company of its appointment of an agent, to license him as its agent for doing in the state such business as it might do therein. By Laws 1917, c. 43, the commissioner was given discretionary authority to issue licenses in which the agent's authority might be "limited to the extent agreed upon with the company making application and set forth in the license." Section 1.

A license issued to Canney in 1921 set forth that he might transact the plaintiff's business of casualty insurance within the state "so far as he may be authorized to do" by it as its agent. The license was annually renewed in this form so that one was in force at the time of his transactions with the defendant. The plaintiff's application for his original license stated his appointment as an agent for the transaction of its business and requested the license to be issued to him as such agent.

The contention is made that the application set forth no limits of authority and therefore showed Canney to be a general agent, and that the license was equally unlimited in its grant of the right to exercise his authority. The contention is thought to be unsound and to overreach. Its adoption would mean that from 1913 to 1917 only general agents could be licensed, and that any agent might do business throughout the state, since that is what the insurer might do. No such strict meaning of the statute, with such an impractical result contrary to the well-known and customary methods of establishing insurance agencies, is to be found. No policy for the state to require such a comprehensive field of activity for every agent has been suggested. The Legislature is assumed to have contemplated the adoption of general business practices in the conduct of the insurance business, and the purpose that suitable persons be employed to deal with a foreign insurer's prospective and gained customers is predominant.

No unlicensed persons might act as agents. Laws 1899, c. 86, § 1, as amended by Laws 1911, c. 180, § 1, now Pub.Laws, c. 275, § § 18, 19. Other legislation (now in force as Pub.Laws, c. 275, § § 15, 16) was enacted prior to the 1913 statute with the same purpose of securing reliable agents. The 1913 statute was designed to more securely effectuate the purpose, in its demands for a finding of suitability before a license should issue, in addition to the informative requirement for the license to show the appointing insurer's right to do business as well as the agent's authority to represent it. The 1913 statute also contained a provision, section 1, that the insurer should be bound by the agent's acts within the apparent scope of his authority, thus strongly indicating that actual authority in a given case might be less than that of a general agent.

Read literally, the 1913 statute provided that the license should be to do as an agent what the principal might, and it is most probable that the 1917 statute was passed to clarify that of 1913 as between a strict meaning and one more consonant with reasonableness. In any event, an application made after 1917 for a license to an agent is not to be construed as showing that the appointee is a general agent, although it is silent in stating any exact definement of his authority. The law makes no order that the application shall state the limitations of authority. Nor does it require the commissioner to state them specifically in the license he issues. A license for one to act as agent so far as the principal authorizes him to act states the extent of authority, although indefinite in exact and complete specification, and is a compliance with the statute. The license sets forth the limits as being those agreed upon between the insurer and the agent, and, so far as the license gives notice to others, it shows that the agent has no more authority than has in fact been bestowed upon him by his principal. No one can be misled and entitled to treat the agent as having general authority, since he is thereby put upon inquiry to ascertain what the agent's real and exact authority may be. The terms and limits of authority are not expected to be rigid during the period of a license, but may be enlarged or narrowed. The Legislature did not require that on every change the license would be altered or a new one issued. The public protection was thought to be adequately secured if notice of possible limits was given without having the license show what they were. Residence and suitability were the sufficient requisites, with the enacted provision for holding the insurer responsible for...