Saucier v. Life & Casualty Ins. Co. of Tennessee, 34220

• Court: Mississippi Supreme Court
• Writing for the Court: Smith, C. J.
• Citation: 189 Miss. 693,198 So. 625
• Parties: SAUCIER v. LIFE & CASUALTY INS. CO. OF TENNESSEE
• Docket Number: 34220
• Decision Date: 11 November 1940

198 So. 625

189 Miss. 693

SAUCIER
v.
LIFE & CASUALTY INS. CO. OF TENNESSEE

No. 34220

Supreme Court of Mississippi

November 11, 1940

APPEAL from the circuit court of Hancock county, HON. L. C. CORBAN, Judge.

Action by Carmelita Saucier against the Life & Casualty Insurance Company of Tennessee on a life insurance policy. Judgment for defendant, and plaintiff appeals. Affirmed.

Affirmed.

Gex & Gex, of Bay St. Louis, for appellant.

The lower court sustained the motion to exclude, basing its ruling upon the theory that under the common law principles of agency, there could be no recovery, as under this principle the company would not be liable for the acts of its agents which it prohibits them from doing. However, under Section 5196 of the Mississippi Code of 1930 the acts of an agent of an insurance company up to and including the consummating of the contract of insurance are the acts of the principal regardless of the provisions of the policy to the contrary.

Lamar Life Ins. Co. v. Kemp, 154 Miss. 890, 124 So. 62.

The court in the Kemp case, supra, in speaking of this principle of law said at page 896 of the Mississippi Report, page 63 of the Southern Reporter, as follows: "Under Section 2615, Code 1906 (Hemingway's Code 1927, Section 5873), the act of appellant's soliciting agent in delivering the policy without collecting the first premium was the act of appellant, notwithstanding any provision in the application for the insurance and the policy to the contrary."

Mutual Life Ins. Co. of N.Y.v. Vaughan, 125 Miss. 369, 88 So. 11; Hartford Fire Ins. Co. v. Clark (Miss.), 122 So. 551.

Upon a casual reading of the authorities there seems to be some confusion as to the interpretation and application of Section 5196 of the Mississippi Code of 1930, but a close reading of the authorities shows that this statute is applicable in all cases wherein an agent of the company does any act up to the delivery and consummation of the contract of insurance. Clearly the act of Latimer, agent of the appellant, in waiving the payment of the first premium was an act done before the consummation of the contract, and therefore the company is bound by his actions.

Hartford Fire Ins. Co. v. Clark, 122 So. 551, 553, 154 Miss. 418, 428; Travelers' Fire Ins. Co. v. Price, 169 Miss. 531, 539.

The principle involved in this case is set at rest in the case of Lamar Life Insurance Company v. Kemp, and the distinction of when the common law principles of agency are applied and when Section 5196 is applied is clearly brought out in the other cases cited.

In reading all of the authorities cited by counsel for appellee, there is only one case which we find that deals with the situation that occurred before the insurance contract was consummated, and that is the case of American Bankers Insurance Company v. Lee, 161 Miss. 85, 134 So. 836. However, the distinction between that case and our case is clearly set out in the case of Home Insurance Company of New York v. Thornhill, 165 Miss. 787, 144 So. 861.

The only way that this court can uphold the decision of the lower court is by overruling their decision in the Lamar Life Ins. Co. v. Kemp case, supra, which decision was followed by this court in the very recent case of Capital Paint & Glass Co. v. St. Paul. Mercury & Indemnity Co., 176 So. 729.

R. C. Cowan and Charles R. Galloway, both of Gulfport, for appellee.

Under the common law, a principal is not bound by the acts of an agent outside the scope of his authority, especially when the third person with whom the agent deals has notice of the limits of authority of said agent.

14 R. C. L. 1160, sec. 342; N.Y.Life Ins. Co. v. O'Dom, 100 Miss. 219, 56 So. 379; Continental Cas. Co. v. Hall, 118 Miss. 871, 80 So. 335; 2 C. J. 1064, sec. 1413; 3 Cooley's Briefs on Insurance (1905 Ed.), p. 2502.

Section 5196 of the Mississippi Code of 1930, defining who is an agent in this state, does not apply to the act of an agent outside his scope of authority so as to bind the principal.

Sec. 5196, Code of 1930; Am. Bankers' Ins. Co. v. Lee, 161 Miss. 85, 134 So. 836; Mutual Life Ins. Co. v. Hebron, 166 Miss. 145, 146 So. 445; Interstate Life & Acc. Ins. Co. v. Ruble, 160 Miss. 206, 133 So. 223; Home Life Ins. Co. v. Thornhill, 165 Miss. 787, 144 So. 861; Travelers' Fire Ins. Co. v. Price, 169 Miss. 531, 152 So. 889; N.Y.Life Ins. Co. v. O'Dom, 100 Miss. 219, 56 So. 379; Continental Cas. Co. v. Hall, 118 Miss. 871, 80 So. 335.

It will be noted that Section 5196 makes a person the agent of the insurance company in certain instances recited therein only as to the duties and liabilities imposed by law. These words are the key to the correct interpretation of the statute, and one of the answers to the question as to when the statute will be applied.

Of particular interest is the case of American Bankers' Insurance Company v. Lee, 161 Miss. 85, 134 So. 836, upon which appellee relies as precisely in point with the case at bar. In that case a soliciting agent of an insurance company took an application for traveling insurance and stated to the applicant that the policy would be in full force and binding upon the company from the date the application was made. The evidence there shows that the application was signed in blank and later filled in by the agent. The applicant was injured before his policy was received and thereafter the agent delivered the policy to applicant while he was in the hospital and told him again that he was insured and that the policy covered the injury received by the applicant. The policy recited that the insurance did not take effect until the delivery of the policy to the applicant during his good health. Section 5196 of the Code of 1930 was considered but was not applied because the act of the agent was not within the real or apparent scope of his authority.

All of the following cases are factually different from the case at bar in that they concern situations wherein the insurer is bound by the act of its agent in concealing knowledge acquired by him while soliciting insurance. It will be noted that in all of the following cases the agent was acting within the scope of his authority in requiring such knowledge. None of these cases can, therefore, be relied on as authority in any situation where an agent is acting outside of the scope of his authority.

Travelers' Fire Ins. Co. v. Price, 169, Miss. 513, 152 So. 889; Hartford Ins. Co. v. Clark, 154 Miss. 318, 122 So. 551; Big Creek Drug Co. v. Stuyvesant Ins. Co., 115 Miss. 333, 75 So. 768; Stewart v. Coleman & Co., 120 Miss. 28, 81 So. 653; N.Y.Life Ins. Co. v. Smith, 129 Miss. 544, 91 So. 455; St. Paul Fire & Marine Ins. Co. v. Loving, 163 Miss. 114, 140 So. 727.

The case of Lamar Life Insurance Company v. Kemp, 154 Miss. 890, 124 So. 62, is not authority to make the act of a special agent of an insurance company, outside the scope of his authority, binding upon the principal.

Mutual Life Ins. Co. of N.Y.v. Vaughan, 125 Miss. 369, 88 So. 11; McMaster v. N.Y.Life Ins. Co., 99 F. 856, 40 C. C. A. 119; 1 Cooley's Briefs on the Law of Ins., pp. 464 and 481; 14 R. C. L. 116, sec. 342; 2 C. J. S. 1252; N.Y.Life Ins. Co. v. O'Dom, 100 Miss. 219, 56 So. 379; Continental Casualty Co. v. Hall, 118 Miss. 871, 80 So. 335; Ins. Co. v. Sorsby, 60 Miss. 302; Am. Bankers' Ins. Co. v. Lee, 161 Miss. 85, 134 So. 836.

The trial court acted properly in excluding the evidence offered by the appellant, plaintiff below, in regard to the alleged agreement between the plaintiff and the agent for the defendant, after the failure of plaintiff to show the authority of the agent to make such an agreement.

Howze v. Whitehead, 93 Miss. 578, 46 So. 461; J. B. Colt Co. v. Black, 144 Miss. 515, 110 So. 442; Am. Bankers' Ins. Co. v. Lee, 161 Miss. 85, 134 So. 836.

Smith, C. J. Ethridge, J., dissenting.

OPINION [198 So. 626]

[189 Miss. 698] Smith, C. J.

This is an action by the appellant on a life insurance policy in which she is the beneficiary, issued by the appellee to her deceased husband, Antoine J. Saucier.

At the close of the appellant's evidence, the court sustained a motion by the appellee to exclude it, and thereafter directed the jury to return the verdict for the appellee, which was done, and there was a judgment accordingly.

It appears from the record, and the appellant's evidence, that the policy provides that it "shall not take effect until the first premium shall have been paid in cash, and this contract delivered and accepted during the lifetime and good health of the insured . . . Only the President, Vice-President, Secretary, Assistant Secretary, Actuary, or Treasurer has power on behalf of the Company to make or modify this contract." Latimer, a soliciting agent for the appellee, obtained from Saucier a written application for the issuance of the policy, which application recites that "It is understood and agreed: 2. That no agent, medical examiner or any other person, except the officers of the Company, have power on behalf of the Company: (a) to make, modify or discharge any contract of insurance, (b) to bind the Company by making any promises respecting any benefits under any policy issued hereunder. . . . 4. That the Company shall incur no liability under this application [189 Miss. 699] until it has been received, approved, and policy issued and delivered, and the full first premium stipulated in the policy has actually been paid to and accepted by the Company during the lifetime of the applicant.

The policy was delivered by Latimer to the appellant. According to her evidence, she did not have sufficient money with which to pay the initial premium on the policy, and told him "to come back later that evening, and he said 'Here is your policy, if anything happens to your husband today or tomorrow your policy is in force.'" Latimer did not return for the collection of the premium, and Antoine...