Kilborn v. Prudential Ins. Co.
| Decision Date | 03 August 1906 |
| Citation | 108 N.W. 861,99 Minn. 176 |
| Parties | KILBORN v. PRUDENTIAL INS. CO. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Swift County; Gorham Powers, Judge.
Action by Nellie J. Kilborn against the Prudential Insurance Company. Judgment for defendant, and plaintiff appeals. Reversed, and judgment ordered for plaintiff.
When an applicant for insurance pays the first premium to the agent, the contract is consummated when the company accepts the application, executes a policy and deposits it in the mail directed to its agent for delivery to the applicant.
An agent is presumed to be acting within the scope of his authority.
The agent of a foreign insurance company who was authorized to solicit insurance in this state had authority by force of section 88, c. 175, p. 437, Gen. Laws 1895, to collect the first premium.
An agent of a foreign life insurance company authorized by chapter 175, p. 392, Gen. Laws 1895, to solicit insurance and collect the first premium, has apparent authority to take a promissory note for the first premium.
Unless the applicant for insurance has knowledge of express limitations upon the authority of the agent the acceptance by the agent of a note in payment of the first premium is binding upon the company. F. P. Olney, for appellant.
Geo. W. Champlin, for respondent.
This was an action to recover upon a policy of life insurance. The case was tried by the court without a jury and judgment ordered for the defendant. From this judgment the plaintiff appeals.
It appears from the stipulation of facts that during the time referred to the defendant was a corporation organized under the laws of the state of New Jersey for the purpose of writing contracts of insurance and was duly authorized to write such contracts of insurance within the state of Minnesota. Timberlake & Coan were the general state agents of the defendant for the state of Minnesota, for the soliciting of insurance and the delivery of policies, and Albert Kundtson was a soliciting agent for the company. On the 19th day of December, 1904, Clint Nixon made an application for insurance in the defendant company and delivered it to said Knudtson. Nixon was also examined by a medical examiner and the examiner's report was attached to the application. At the time the application was made, Nixon executed and delivered to Knudtson two promissory notes for the aggregate sum of $61.36; one for $30.66 payable in one month, and the other for the same amount payable in six months from date. The notes were payable to Knudtson and drew interest after maturity only. It is stipulated that no part of the first premium for said insurance was ever paid or tendered by said Nixon or any other person in his behalf unless the execution and delivery of these notes constituted payment. Knudtson, on the day the application was made and the notes given, forwarded the application with the medical examiner's report attached thereto, to Timberlake & Coan in Minneapolis. It was received by them on December 21, 1904, and at once forwarded by mail to the defendant at its home office in Newark, N. J. On December 23, 1904, the company executed a policy of insurance upon the application and mailed the same to Timberlake & Coan in Minneapolis, for delivery to Nixon. It was received by them on December 26, 1904. On December 24, 1904, Nixon was shot, and died at the village of Kirkoven. Timberlake & Coan learned of his death on December 26, 1904, and thereupon returned the policy to the company at Newark N. J. On December 26, 1904, Knudtson delivered the two notes to Timberlake & Coan, who, until that time, had no knowledge of their execution. They marked the notes void, and canceled and forwarded them on January 12, 1905, by mail to the plaintiff at her supposed address in St. Cloud, Minn. The letter was received and returned to Timberlake & Coan, who made other attempts to learn the whereabouts of the plaintiff, but were unsuccessful. No attempt was made to collect the notes, and nothing was ever paid thereon. Demand was made by the plaintiff for the usual blanks upon which to make the proof of death. The company refused to furnish such blanks for the reason as given that ‘no premium was ever paid upon this application, and therefore no liability exists.’ It is further admitted that plaintiff had an insurable interest in Nixon's life, and that Nixon was in good health up to the time he was killed. The court found upon these stipulated facts that the first annual premuim required by the application was never paid, and that the policy was never delivered.
1. We think that the only serious question of the case is whether the premuim was paid by the delivery of the notes in question. The application which was forwarded to the company stated that $61.32 had been paid in advance upon account. The policy was executed by the defendant with the understanding that the premium had been paid to the agent, and that the insured was therefore entitled to the immediate delivery of the policy. It is very well settled that where nothing remains to be done by the insured, the mailing of the policy duly executed to the insured or to an agent of the company for delivery to the insured constitutes a delivery. Yonge v. Equitable Life Ins. Soc. (C. C.) 30 Fed. 902;Mutual Res. Life Fund Ass'n v. Farmer (Ark.) 47 S. W. 850; Hallock v. Comm. Ins. Co., 26 N. J. Law, 268; N. Y. Life Ins. Co. v. Babcock (Ga.) 30 S. E. 273,42 L. R. A. 88, 69 Am. St. Rep. 134;Hartford, etc. Ins. Co. v. Lasher Stocking Co., 66 Vt. 439, 29 Atl. 629,44 Am. St. Rep. 859;Dailey v. Ass'n, 102 Mich. 289, 57 N. W. 184,26 L. R. A. 171. The contract is complete when the application is accepted, and the acceptance signified by mailing the policy. Tayloe v. Mer., etc., Ins. Co., 9 How. (U. S.) 390, 13 L. Ed. 187;Heiman v. Phoenix Ins. Co., 17 Minn. 153 (Gil. 127), 10 Am. Rep. 154; Article, 16 Western Jurist p. 337.
2. The policy contains no provision that the first premium shall be paid in cash only. Premiums are made payable at the home office in Newark, N. J., or to an agent of the company on or before due in exchange for official receipts signed by the president and secretary and countersigned by an authorized agent of the company. This provision manifestly has no application to the first premium, and if it had it would not be controlling, as the policy was issued with knowledge that the first premium had already been paid to the agent of the company who at the time could not have had possession of the policy or an official receipt. The application upon which the policy was issued recited that the applicant had paid already in advance on account, $61.32. The company, therefore, knew that the agent had received the first premium, and, after issuing the policy with this information, if could not be heard to deny the authority of the agent who received the premium had it been paid in cash. There is also a provision in the policy to the effect that no agent has power to extend the time of paying the first premium, but the insured never saw the policy and provisions in it of which he had no knowledge could have no application to matters which occurred before the policy was issued. Kausal v. Minn., etc., Ins. Co. 31 Minn. 17, 16 N. W. 430,47 Am. Rep. 776; Cont. Ins. Co. v. Ruckman, 127 Ill. 364,20 N. W. 77,11 Am. St. Rep. 121. It must also be remembered that there is no evidence in the record of any express limitations upon the authority of Knudtson or as to the manner in which he is to collect the premium. The agent assumed to have authority to accept the notes and there is a presumption that a person known to be an agent is acting within the scope of his authority. Inglish v. Ayers, 79 Mich. 516, 44 N. W. 942;Austrian, etc., Co. v. Springer, 94 Mich. 343, 54 N. W. 50,34 Am. St. Rep. 350:Bessemer Land & Imp. Co. v. Campbell, 121 Ala. 50,25 South. 793,77 Am. St. Rep. 17. It follows that if the delivery of the promissory notes to Knudtson constituted payment of the first premium the policy was in force when the insured died, and the plaintiff is entitled to recover.
3. The question is as to the authority of Knudtson. Where an insurance policy provides that it shall not be effective until the first premium is paid, it does not take effect even although delivered until this provision is complied with. But the manner in which payment is made is immaterial if it is at the time acceptable to the company. Hence, where the policy is silent as to the mode of payment, and the statute does not require it to be paid in cash (as in State v. Moore, 48 Neb. 870, 67 N. W. 876), and the company or its duly authorized agents delivers the policy and accepts the applicant's notes for the first premium, it is presumed that the notes are accepted as payment. Union Central Life Ins. Co. v. Taggart, 55 Minn. 95, 56 N. W. 579,43 Am. St. Rep. 474;Stewart v. Union Mut. Ins. Co., 155 N. Y. 257, 49 N. E. 876,42 L. R. A. 147;Stepp v. Nat. Life, etc., Ass'n, 37 S. C. 417, 16 S. E. 134;Insurance Co. v. Miller, 12 Wall. (U. S.) 302, 20 L. Ed. 398. In May on Insurance, § 134, it is said, ‘Where the agent is authorized to accept the payment of premiums, he may exercise his discretion as to the mode of payment.’ See, also, Richard, Insurance, § 93. The authorities very generally hold that an agent who is authorized to make contracts of insurance and deliver policies has implied authority to accept notes for the first premium. Tooker v. Sec. Trust Co., 26 App. Div. 372,49 N. Y. Supp. 814;Id., 165 N. Y. 608,58 N. W. 1093;Mut. Life Ins. Co. v. Logan, 87 Fed. 637, 31 C. C. A. 172;Newark Machine Co. v. Kenton Ins. Co. (Ohio) 35 N. E. 1060,22 L. R. A. 768; 1 Joyce, Insurance, § 77, and cases there cited. But this authority is sometimes denied to subagents of the general agents, and to what are known as special or soliciting agents. Penn. Casu. Co. v. Bacon, 133 Fed. 907, 67 C. C. A. 497;Insurance Co. v. Willets, 24...
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