Northwestern Life Ass'n v. Findley

• Decision Date: 17 May 1902
• Parties: NORTHWESTERN LIFE ASS'N v. FINDLEY et al.
• Court: Texas Court of Appeals

68 S.W. 695

NORTHWESTERN LIFE ASS'N v. FINDLEY et al.

Court of Civil Appeals of Texas.

May 17, 1902.

Appeal from district court, Hill county; Wm. Poindexter, Judge.

Action by Mrs. M. A. Findley and another against the Northwestern Life Association. Judgment for plaintiffs, and defendant appeals. Affirmed.

Ivy & Scruggs and Jo. Abbott, for appellant. A. P. McKinnon and L. A. Carlton, for appellees.

TEMPLETON, J.

Mrs. M. A. Findley and her husband brought this suit on a policy of insurance for $2,000, payable to her, issued by the Northwestern Life Association on the life of Byron S. Findley, a son of appellees. On a jury trial they obtained a judgment, from which the association has appealed.

1. The policy contained a clause which reads as follows: "This policy shall not become operative so as to bind the association until the first payment is made hereon, and the policy is actually delivered to the insured herein named while in good health." The policy was issued at appellant's general offices in Minneapolis, Minn., and bears date on December 11, 1899. Appellant proved that the policy was mailed to R. U. Barnes, its agent at Hillsboro, Tex., to be by him delivered to the insured. It takes about 48 hours for a letter to be carried by mail from Minneapolis to Hillsboro. On December 16, 1899, the insured was seized with a sickness which terminated in his death on January 28, 1900. Barnes did not testify on the trial, and it was not shown when he received the policy or delivered it to the insured. The evidence is sufficient to show that he did deliver it. Appellant pleaded the said clause of the policy, and that the policy, if it was delivered at all, was delivered when the insured was not in good health, and that, therefore, the policy never became operative. It seems that the first premium was paid before the policy was issued, and it may be doubted whether said clause was intended to apply in such case. Association v. Harris (Tex. Sup.) 57 S. W. 635. It appears that the clause in question was inserted in the blank forms of appellant's policies to cover cases where payment of the first premium was not made until after issuance of the policy. If this construction is correct, then the said clause is without application in this case, and appellant's defense based thereon must fail. The trial court, however, elected to accept appellant's theory that the said clause applied, and we will consider the question whether, on that theory, any error is shown. On the theory that said clause was applicable, appellees sought to avoid the effect thereof by showing that, if the insured was not in good health when the policy was delivered, the fact was known to appellant's said agent who delivered the policy at the time of delivery. On the other hand, appellant claims that, even if its agent delivered the policy knowing that the insured was not in good health, the delivery was not binding on it, because of a provision of the policy which reads thus: "It is mutually agreed that agents or collectors have no authority to alter or discharge any contract in relation to this insurance, or to waive any forfeiture thereof." Appellant requested a special charge instructing the jury to return a verdict in its favor if they found that the policy was delivered while the insured was not in good health. The charge was refused, and error is assigned thereon. It is clear that if the association, with full knowledge of the facts, elected to deliver the policy while the insured was not in good health, taking the chances of his sickness being merely temporary, and of no consequence, such delivery would operate as a consummation of the contract, and the policy would be effective from the time of delivery, notwithstanding the said clause relating to delivery while the insured was in good health. As the association is a corporation, it can act only through its officers and agents, and any officer or agent empowered to act for it in respect to a particular matter is the representative of the association in that behalf, and his acts done within the scope of his powers are binding on the association, although the contract contains a general clause declaring that agents shall have no authority to change the contract or waive a forfeiture. Such provision of the contract must be held to relate to agents who have not authority to act for the corporation in regard to the matter in issue, since to hold otherwise would deprive the corporation of the power to transact its necessary business and carry out the objects and purposes of its creation. If Barnes, the agent of appellant, who delivered the policy, was, in respect to delivering the policy, a mere clerk, having no discretion in the premises, and being bound to deliver the policy when received, regardless of the condition of the health of the insured, and being without authority to collect the premium, then it would seem that the association would not be bound by such delivery if the insured was not in good health, unless it ratified his act after becoming acquainted with the facts. But if he might, in his discretion, withhold delivery of the policy in case he found the insured not in good health, and possessed authority to collect the premium, and, having collected the premium, and knowing the insured was not in good health, delivered the policy, the association was bound by his acts, and the contract was thereby completed. It is not denied that Barnes was the agent of appellant. He solicited the insurance, and took and forwarded the application. He collected and receipted for the first premium. The association accepted the risk, appropriated and retained the premium, issued the policy, and sent it to Barnes for delivery. He delivered the policy with full knowledge of the condition of the health of the insured. There is no intimation that Barnes acted otherwise than in good faith toward his principal, or that the insured was guilty of fraud in procuring the policy to be delivered. The association knew the precise limits of its agent's authority, but did not, on the trial, disclose the same. We are of opinion that, under the circumstances, the trial court did not err in refusing to assume, as a matter of law, as requested by the special charge, that the delivery was not binding on appellant because the insured was not in good health at that time. There is another reason why the refusal of the special charge was not error. It was about six weeks from the time the policy was delivered until the death...