Mutual Life Ins. Co. v. Reynolds

• Decision Date: 03 December 1906
• Citation: 98 S.W. 963
• Parties: MUTUAL LIFE INS. CO. v. REYNOLDS.
• Court: Arkansas Supreme Court

98 S.W. 963

MUTUAL LIFE INS. CO. v. REYNOLDS.

Supreme Court of Arkansas.

December 3, 1906.

Appeal from Circuit Court, Marion County; E. G. Mitchell, Judge.

Action by Ben Reynolds against the Mutual Life Insurance Company and others. From a judgment in favor of plaintiff, defendant Mutual Life Insurance Company appeals. Reversed and remanded.

Reynolds brought suit against the insurance company and several of its agents, including E. V. M. Powell, seeking to recover a sum paid as the first premium on a policy which the company had declined to issue. Defendant Remmel was the company's general agent for Arkansas. He appointed Carter a soliciting agent at Batesville to take applications and send them to him. When policies were issued thereon, he sent them to Carter, who delivered them and collected the premium, retaining 60 per cent. for his services and remitting the remaining 40 per cent. to Remmel. Carter had no authority to employ subagents, or to issue binding receipts; that is, receipts binding the company from the date of signing the application. Remmel intrusted such receipts to only one of his agents, the one at Pine Bluff. Powell lived at Yellville. He was in the same office with Estes, another of Remmel's agents, but not in partnership with him. He had access to Estes' papers, and could get a blank application. He represented the Security Mutual Life Insurance Company. He took an application from Reynolds for a policy in defendant company. He, no doubt, abstracted the application from Estes' drawer. Reynolds paid the first premium at the time he signed the application, and Powell gave him a binding receipt. Where he got the blank for it is not explained, as he did not appear at the trial. Powell forwarded the application to Carter with a letter in which he asked Carter to sign it as agent and send it in to Remmel. He said nothing about the payment of the premium or the binding receipt. Carter signed the application and sent it to Remmel, who forwarded it to the company. It was rejected. Then Reynolds demanded of Powell a return of the premium. Powell said he had sent it to Carter. Reynolds drew for the amount, with the binding receipt attached, on Carter, who thus first learned of the payment of the money or the existence of the receipt. Carter declined to pay. Reynolds then changed the name of the drawee, and sent it forward to Remmel, who thus first learned that the premium had been paid or the receipt given, or that Powell, whom he had...