Liberty Nat. Life Ins. Co. v. Staggs

• Decision Date: 19 February 1942
• Docket Number: 5 Div. 363.
• Parties: LIBERTY NAT. LIFE INS. CO. v. STAGGS.
• Court: Alabama Supreme Court

6 So.2d 432

242 Ala. 363

LIBERTY NAT. LIFE INS. CO. v. STAGGS.

5 Div. 363.

Supreme Court of Alabama

February 19, 1942

Gerald & Gerald, of Clanton, for appellant.

Reynolds & Reynolds, of Clanton, for appellee.

FOSTER Justice.

The suit here is founded on an alleged verbal executory contract to insure the life of plaintiff's infant daughter, then only a few days old, whereby it is claimed that the insurance was to be effective from the date of the verbal agreement when an application was taken for the sort of policy described in it, and which was later to be issued. That was approximately the middle part of March, 1939. The policy was agreed on and was issued dated March 27, 1939, effective from that date, and delivered on March 25. The child died the night of that day, after the delivery of the policy, and before its effective date. The weekly premium of ten cents was paid for two weeks before the death occurred. The suit was originally on the policy, but by amendment it is based on the verbal agreement, and the count on the policy was stricken.

The power to make such a contract and the nature of the suit based on it are discussed in American Life Ins. Co. v Carlton, 236 Ala. 609, 184 So. 171. The suit in the instant case is fully supported by that authority.

The question hinges upon the authority of the agent of defendant to make such a contract binding on defendant. His authority in this instance cannot be inferred from his course of conduct. He was shown to have been in the habit of collecting premiums on policies of this sort weekly and was doing so from this plaintiff as the holder of another policy, and on one of such collecting visits the instant agreement is alleged to have been made. His actual authority was in writing in a contract entitled "Your Agency Franchise," and recited:

"As holder of this franchise, you are an independent contractor engaged in building and operating your own business, in the pursuit of which you are authorized to sell and service this company's policies of life insurance. These are three kinds: weekly premium policies, special monthly policies and ordinary policies."

We have recognized the general rule that an agent whose authority is limited to soliciting insurance delivering policies and collecting premiums has no power to change stipulations in a contract of insurance: that to do so he must either be a general agent or be specially so authorized or his course of dealing to that extent have been ratified expressly or impliedly. Christian Benevolent Burial Ass'n v. Thornton, 241 Ala. 13, 1 So.2d 8; American Life Ins. Co. v. Aladdin Temple B Ass'n, 238 Ala. 512, 191 So. 903; Home Ins. Co. v. Scharnagel, 227 Ala. 60, 148 So. 596. And cannot waive the breach of any condition of the policy after its delivery. Home Ins. Co. v. Scharnagel, supra; Indemnity Co. of America v. Bollas, 223 Ala. 239, 135 So. 174; London & Lancashire Ins. Co. v. McWilliams, 215 Ala. 481, 110 So. 909.

And for like reason such an agent cannot make a binding contract of insurance or to insure. 29 Amer.Jur. 149, 150, section 133, note 13.

There was also in evidence a certificate from the State Bureau of Insurance whereby this person was said to be "duly appointed agent of the Liberty National Life Insurance Company, organized under the laws of the State of Alabama and that said agent is duly authorized within the authority conferred by the company to transact the business of life...