McCabe v. Ætna Ins. Co.

• Decision Date: 31 October 1899
• Citation: 9 N.D. 19,81 N.W. 426
• Parties: McCABE et al. v. ÆTNA INS. CO.
• Court: North Dakota Supreme Court

9 N.D. 19

81 N.W. 426

McCABE et al.

v.ÆTNA INS. CO.¹

Supreme Court of North Dakota.

Oct. 31, 1899.

Syllabus by the Court.

1. A parol agreement to renew a policy of insurance, entered into by an agent having authority to renew policies, held to be the agreement of the principal, and not of the agent.

2. An insurance agent, having authority to solicit insurance, to accept risks, to agree upon and settle the terms of insurance, and to issue and renew policies, has authority to make a preliminary parol contract binding upon his principal, to renew a policy about to expire. Certain provisions of the policy respecting renewals, waivers, etc., held not to apply to such preliminary contract.

3. Prepayment of premium for renewal term is not essential to the validity of such preliminary agreement to renew.

4. Where an amendment of the complaint at the trial is allowed on condition that defendant be given sufficient time to prepare to meet the issues as amended, and thereafter defendant announces himself ready, and proceeds to trial on the amended pleadings, he will not be heard to urge that he was prejudiced by reason of the allowance of such amendment.

5. Evidence of custom on the part of the agent to extend credit for premiums held admissible.

6. Evidence that plaintiffs relied upon the preliminary agreement to renew the policy, and that, had they not believed that the policy was renewed, they would have procured other insurance, also held competent.

7. The court's charge to the jury examined, and held to state the law correctly.

Appeal from district court, Pembina county; Sauter, Judge.

Action by McCabe Bros. against the Ætna Insurance Company. Judgment for plaintiffs, and defendant appeals. Affirmed.W. J. Burke and Kitchel, Cohen & Shaw, for appellant. Templeton & Rex and J. D. Stack, for respondents.

FISK, J.

This litigation arose out of a transaction wherein plaintiffs allege that defendant, through its authorized agent, orally agreed to renew a certain policy of insurance on certain property belonging to the plaintiffs. It is conceded that on November 13, 1896, the defendant, through its agent, William McBride, at St. Thomas, duly issued and deliveredto plaintiffs its certain policy of insurance, whereby it insured against loss by fire certain grain contained in plaintiffs' elevator at Glasston, in the sum of $2,000, for the period of one month. It is also conceded that after the expiration of said period of one month, and on December 24, 1896, said grain was totally destroyed by fire, and that plaintiffs' loss thereby exceeded said sum of $2,000. Plaintiffs contend that on or about December 5, 1896, they entered into a parol agreement with defendant, through its said agent, whereby the defendant promised and agreed to renew said policy, at its expiration, for the further period of one month, and that defendant, through its said agent's neglect, failed to renew said policy, and this action was brought to recover damages for the breach of said parol agreement. The defendant flatly denied the existence of such agreement, and there is considerable evidence in the record tending to corroborate defendant's contention; but the jury having found for the plaintiffs on this issue, and there being a substantial conflict in the testimony, this court must assume that such agreement was made. Counsel for appellant urge numerous assignments of error, which we will consider in the order in which they are presented.

1. They contend, first, that the alleged parol agreement, if made, was the agreement of McBride, the agent, and not the defendant, and in support of such contention they cite Shank v. Insurance Co., 4 App. Div. 516, 40 N. Y. Supp. 14. This case seems to be an authority in defendant's favor. The facts in that case were very similar to the facts in the case at bar. We have carefully considered the reasoning of the court in the case cited, and, with all due respect to that court, we are forced to the conclusion that the reasoning is unsound, and that it is opposed to the great weight of authority. The defendant is a foreign corporation, and can, of course, only act through an agent. The defendant concedes that the policy which was to be renewed under the terms of the parol agreement was the policy of the defendant, and that the same was issued by McBride as agent, with full authority to do so, and it seems unreasonable to suppose that the parties in making this parol agreement believed that they were dealing with McBride personally, instead of in his capacity as such agent. If the parol contract to renew had been fulfilled by McBride, it would have been done as agent. Plaintiffs having dealt with McBride as agent in the issuance of the policy in the first instance, which policy expressly provided for renewals thereof from time to time, it is but natural to suppose that in subsequent dealings, relating to the renewal of this identical policy, the parties contemplated that they were dealing with him in the same capacity. McBride was not engaged in the issuance of insurance policies or the renewal thereof on his own account, but simply as agent. This all parties knew. McBride was authorized by the company to issue renewals of its policies, and we must hold, under the evidence in this case, that in entering into the preliminary contract to issue such renewal he acted in his representative capacity as agent. Upon this point, see Commercial Union Assur. Co. v. State (Ind. Sup.) 15 N. E. 518, and cases cited.

2. Appellant's second contention is that even if McBride, in making such parol agreement, acted in his capacity as such agent, still his authority as such agent for the defendant did not include the making of executory contracts by parol to renew policies in futuro. This, to our minds, is the most difficult question in the case, and, in order to intelligently dispose of the same, it is necessary to examine into the authority conferred upon Mr. McBride by this insurance company. The authority of an agent is such as is expressly given him by his principal, and, in addition thereto, such as his appointment and duties necessarily imply. The commission appointing McBride as agent gave him “full power to receive proposals for insurance against loss or damage by fire; to act as surveyor, or to appoint surveyors, of buildings to be insured, or containing property to be insured, in St. Thomas and vicinity; and insurance thereon to make, by policies signed by the president, and attested by the secretary, of said Ætna Insurance Company, and countersigned by the said William McBride, agent.” The only other authority conferred upon McBride is such as is contained in the policy (Exhibit A), as follows: “In any matter relating to this insurance, no person, unless authorized in writing, shall be deemed the agent of this company. This policy may, by a renewal, be continued under the original stipulation, in consideration of premium for the renewed term, provided that any increase of hazard must be made known to this company at the time of renewal or this policy shall be void. * * * This policy is made and accepted subject to the foregoing stipulation and conditions, together with such other provisions, agreements, or conditions as may be indorsed hereon or added hereto; and no officer, agent, or other representative of this company shall have power to waive any provision or condition of this policy, except such as by the terms of this policy may be the subject of agreement indorsed hereon or added hereto; and, as to such provisions and conditions, no officer, agent, or representative shall have such power or be deemed or held to have waived such provisions or conditions, unless such waiver, if any, shall be written upon or attached hereto; nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the insured, unless so written or attached.” It appears from the agent's commission that he possessed express authority to receive proposals for insurance; to act as surveyor, and to appoint surveyors, for buildings to be insured; and insurance thereon to make, by policies signed by the president, and attested by the secretary, of said company, countersigned by said McBride, as agent; and, by the terms of the policy, the agent might renew the same in the manner therein provided. There is nothing in the commission or in the policy expressly authorizing McBride, as agent, to make a preliminary oral agreement to issue or renew policies; neither is there anything restricting the authority of the agent in this regard; and, if such authority was conferred upon him, it must have been so conferred by operation of law, from the express authority given him. It is well settled in this country that the agent of a foreign insurance company, invested with such authority as was conferred upon McBride by this defendant, is a general agent. Post v. Insurance Co., 43 Barb. 361;Lightbody v. Insurance Co., 23 Wend. 22;McEwen v. Insurance Co., 5 Hill, 105;King v. Cox (Ark.) 37 S. W. 877. It is also, we think, well settled that such agent, with similar authority, may enter into a binding executory contract by parol to issue or to renew a policy in the future. A leading authority involving this question is Post v. Insurance Co., 43 Barb. 351. It was contended by the plaintiff in that case that the defendant, either itself or through its agent, made a verbal agreement to renew the policy in question for a period of 60 days, which included the time when the loss occurred; defendant's contention being that the evidence was too indefinite to establish an agreement to renew the policy, and that it could only be renewed by an instrument in writing, and that the agreement, if made, was not binding on the defendant; and the court, in disposing of the question here involved, said: “When this agreement was made, however, the policy had expired, and, as the agreement was unwritten, the defendant claims that it...