Mut. Life Ins. Co. Of N.Y. v. Brown

• Decision Date: 20 September 1923
• Citation: 119 S.E. 142
• Court: Virginia Supreme Court
• Parties: MUTUAL LIFE INS. CO. OF NEW YORK. v. BROWN.

119 S.E. 142

MUTUAL LIFE INS. CO. OF NEW YORK.

v.BROWN.

Supreme Court of Appeals of Virginia.

Sept. 20, 1923.

Error to Law and Chancery Court of City of Roanoke.

Proceeding by motion by H. E. Brown against the Mutual Life Insurance Company of New York and another. Judgment for plaintiff, and the named defendant brings error. Affirmed.

Frederick L. Allen, of New York City, and Hall, Wingfield & Apperson, of Roanoke, for plaintiff in error.

C. S. McNulty, of Roanoke, for defendant in error.

BURKS, J. This is a proceeding by motion under section 6046 of the Code, instituted by Brown against the Insurance company and Brooks Marmon, to recover $700.18 alleged to have been paid to Marmon as agent of the insurance company for certain insurance in the defendant company, which was never furnished. There was a judgment against the insurance company for $604.30, to which the company assigns error.

There are four assignments of error, the first two of which are to the refusal of the trial court to set aside the verdict of the jury on the ground that it is contrary to the evidence. The trial court was without power to set aside the verdict on that ground, unless it was either without evidence to support it, or was plainly contrary to the evidence. The case made by the evidence as we must view it was as follows: Brooks Marmon had been the agent of the company at Roanoke, Va., for a number of years, and had authority to solicit insurance, to give information as to the character of the insurance written and the rates therefor, to collect the first year's premiums and "premiums or advance payments" on policies for a limited number of years, and to deliver policies to the insured. He was required "to pay over all premiums or advance payments as soon as collected." The plaintiff, Horace E. Brown, had two life policies in the defendant company, for $1,000 and $500, respectively, maturing, or upon which payment of premiums would cease, about May 20, 1920. He had borrowed money of the company on these policies, but they still had a further loan value of something over $700. Shortly before these policies matured, Marmon went to see Brown, and interviewed him on the subject of taking out new insurance in the defendant company. He represented to Brown that, by using the remaining loan value of his old policies and the dividends on all of his policies, he could procure $2,000 of insurance on the ordinary life plan, and that such loan value and dividends would pay the premiums on the $2,000 policy for a period of 10 years, and that thereafter his "dividends would practically carry it the rest of the time; he would hardly ever have very much to pay on it." Brown approved the suggestion of Marmon, and on May 8, 1920, stood the necessary physical examination, and filled out and signed an application for two policies, of $1,000 each, on the ordinary life plan, with premiums payable annually. This application was accepted, and the policies duly executed by the company and forwarded to Marmon, to be delivered on the payment of the premiums. In July, 1920, Brown applied to the company for the loan value of his old policies, and the company sent him, through Marmon, checka dated July 23, 1920, for such loan value, payable to Brown and his wife. One of these checks was for $466.77, and the other $233.41, aggregating $700.18, the amount sued for. These checks were properly indorsed and delivered to Marmon to carry out the contract Brown had previously made with Marmon. Marmon, testifying for the plaintiff, states that shortly thereafter he paid over to the company the first year's premiums, amounting to $95.98, and later on paid the company the balance of the $700.18, to be applied to premiums on Brown's policies. The latter payment is denied by the company. The rules of the company required settlement for policies to be made within 60 days from date of physical examination, or else a new certificate of health to be furnished. The premiums were not paid until about July 23, but Marmon wrote to Love, his immediate superior, under date of July 29, 1920, that he delivered the policies before the 60 days expired and took Brown's note, and the premium was accepted by the company by letter under date of August 3, 1920. Brown did not examine his policies until March, 1921, and then found that he had credit for only one annual premium. In the meantime Marmon had borrowed $5,000, and had given a deed of trust on property belonging to him, to secure and indemnify his sureties on the loan. What the financial condition of Marmon was at that time does not appear from the record. When the plaintiff discoveredthat only one payment had been made on his policies, and the company refused to give him credit for the "advance payments" made to Marmon and canceled his policies, he demanded a return of the money he had paid to Marmon, as its agent, for "advance payments." The company refused to return the money, and this action was brought to recover it

The gist of the plaintiffs action is that he paid to the defendant $700.18 as advance payments on $2,000 of life insurance, which would have paid the premiums for over 7 years, and that the defendant furnished the insurance for only one year, and then canceled the policies. The result of the transaction, if established, left the defendant with $604.20 of the plaintiffs money in its hands, for which it had furnished no consideration, and which ex æquo et bono belonged to the plaintiff. It was recoverable in an action of indebitatus assumpsit for money had and received to the use of the plaintiff, or on motion as in this case. Robertson v. Robertson (decided at this term) 136 Va. —, 119 S. E. 140.

It is undisputed that Marmon collected the $700.18 of Brown, to be applied to advance payments of premiums on the $2,000 insurance; but it is earnestly insisted by the company that Marmon was an agent of limited authority, and had no power to collect advance payments for the company, and that in receiving and collecting the checks from Brown he was acting as agent of Brown, and not of the company. Brown had no notice of any limitation upon the powers of Marmon, and had the right to deal with him upon the faith of his ostensible powers, whether his agency was general or special. Byrne v. Massasoit Packing Co., 137 Mass. 313; Butler v. Maples, 9 Wall. 766, 774, 19 L. Ed. 822; Reese v. Bates, 94 Va. 321, 26 S. E. 865; Huffcut on Agency, § 104. Marmon's employment by the company was by written contract, and whether or not he had authority, under that contract, to collect in advance more than one premium on any ordinary life policy, is not free from doubt. He thought and testified he had, and Love, the manager of the Richmond agency, which covers most of the state of Virginia, including Roanoke, while testifying for the company, admitted he had such authority provided he got the company's receipt therefor, duly signed, before making the collection. While clause 1 of the contract only authorized Marmon to collect "first year premiums, " clause 5 required him "to pay over all premiums or advance payments as soon as collected, " and by implication at least authorized the collection of "advance payments."

It was argued for the company that "advance payments" had reference to first year's premiums; but this cannot be a correct in terpretation, for not only is there a difference in the language used, but rule 137 of the company, which was made a part of Marmon's contract, provided that in a policy of this kind 10 annual premiums "will be accepted in advance with a discount to the insured as noted below, " and the Richmond manager testified to the same effect. Whether or not Marmon complied with the conditions under which he was authorized to receive such "advance payments" is another question. Love, the Richmond manager, testified that he did not. Marmon does not testify that he did, nor does any other witness; but the testimony of Marmon on the subject of the collection from Brown, while not very satisfactory, is such that the jury might have inferred that he was in the habit of making such collections. While testifying as to the payment, beyond the first year's premium on the Brown policies, he stated that he did collect premiums and then pay them over to the company "on these policies and other policies." If the evidence of the company in conflict with that of the plaintiff be discarded, and all fair inferences from the plaintiff's testimony be drawn in his favor, we are unable to say that the jury could not have found that Marmon had authority to make the collection.

But, if we are in error in this conclusion, if is immaterial whether he had such authority or not, if the collection was in fact made by Marmon on "advance payments" on the policies of Brown, and was paid over by him to the company as such "advance payments." On this subject the evidence for the plaintiff and the defendant is in direct conflict. It is true that Marmon said that he sent the money by check, and was unable to produce his canceled check, for which he undertakes to give some sort of explanation, and that Love states that no such check was ever received, and there is the possibility that the check was sent and never received; but civil cases are not tried on possibilities, but probabilities. On a motion to set aside the verdict as contrary to the evidence, the statement of Love that no such check was ever received must be regarded as in conflict with the statement of Marmon that he sent it. The situation presented a question for the jury. The testimony of Marmon. as it appears in cold print, is far from satisfactory. He says:

"I paid his premium on his new policy, and at some time—I don't know, I can't say when—but in some transaction that money went back to the company."

He says he sent the money by check, and at one time stated, "I have canceled checks in my office, " but later, on cross-examination, admitted that he did not have the checks, and stated...