Thompson v. Equitable Life Assur. Soc. of U.S.

• Decision Date: 02 July 1930
• Docket Number: 113.
• Parties: 199 N.C. 59, 85 A.L.R. 739 v. EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES. THOMPSON
• Court: North Carolina Supreme Court

154 S.E. 21

199 N.C. 59, 85 A.L.R. 739

THOMPSON v. EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES.

No. 113.

Supreme Court of North Carolina

July 2, 1930

Appeal from Superior Court, Harnett County; Daniels, Judge.

Action by Charlotte I. Thompson against the Equitable Life Assurance Society of the United States. From the judgment, plaintiff appeals.

Affirmed.

A person dealing with a special agent is bound to ascertain the extent of his authority.

This is an action to recover of defendant the sum of $521, paid by plaintiff to O. A. Moran, an agent of defendant.

The action was heard on a statement of facts agreed which is as follows:

"1. That on March 8th, 1928, and for some years prior and for some time thereafter, O. A. Moran was the duly authorized agent of the defendant for the purpose of representing the defendant in the solicitation of applications for policies both on the lives of applicants and what was known as retirement annuity policies in the territory including and surrounding the town of Faison, in the County of Duplin North Carolina, the territory in which he was such agent included the towns of Goldsboro, Mount Olive, and other towns.

"2. That the said O. A. Moran was in good standing with the company and regarded as a good agent.

"3. That among the duties conferred by the defendant upon their said agent was to represent to the proposed applicants the kind of policies issued by the defendant company, the expense of such policies to the proposed applicants and the benefit to be derived by the assured with respect to each class of policies issued by the defendant Society.

"4. That on the 8th day of March, 1928, the said O. A. Moran, as agent of the defendant Society solicited the plaintiff to accept a policy of the defendant known as retirement annuity policy, explaining to her as hereinafter set forth, the price and benefits to be derived from said policy, and procured an application from said plaintiff in writing for such policy and collected from the plaintiff simultaneously with the signing of said policy as premium on the policy to be issued, the sum of $121.00 in cash and four Liberty Bonds of $100 each, all of the value of $521.00. That said application was never turned into the defendant and the said defendant knew nothing of the transaction until informed by letter from the plaintiff dated March 7th, 1929, which said letter is copied in the answer, and made a part of this agreed statement.

"5. That the defendant's said agent, O. A. Moran, represented to the plaintiff in connection with said application that the benefits among others to be derived from the policy that he was offering to sell her, and for which he represented to her that he was making application was analogous to a savings account; that the more she put into the policy at present, the larger would be the annuity which the defendant Society would pay to her; and that she could pay the premiums quarterly, semi-annually or for as many years in advance as she desired; that the larger the initial payment, the larger in proportion would be the annuity or dividend payable to her by the company; that the defendant Society was one of the largest Insurance Companies in the world, and was as solvent and trustworthy as the United States Government, and induced her to pay said large sum in advance, which he fraudulently converted to his own use and never sent any application whatever to the defendant Society and no policy has been issued by said Society to the plaintiff.

"6. That upon the plaintiff paying the defendant's said agent the sum of $521.00 in the manner before set out, the defendant's said agent delivered to her an official receipt on form furnished by the defendant Society in words and figures as follows:

"'No. A-233429.

"'Received of Mrs. Charlotte Ireland Thompson Five Hundred Twenty-One and no/100 dollars, the first annual premium on proposed Retirement-Annuity on the life of Mrs. Charlotte Ireland Thompson, for which an application bearing a corresponding number as above is this day made to the Equitable Life Assurance Society of the United States. This Retirement-Annuity policy, subject to the terms and conditions thereof, shall take effect as of the date of this receipt, provided the person upon whose life the annuity depends is on this date in the opinion of the Society's authorized officers in New York an acceptable risk and the application is otherwise acceptable on the plan and for the amount and at the rate of premium applied for; otherwise the payment evidenced by this receipt shall be returned on demand and the surrender of this receipt.

"'Dated at Faison, N. C., Mch. 8th, 1928.

"'O. A. Moran, Agent.

"'This receipt must not be detached unless first premium is collected.'

"7. That on July 6th, 1928, O. A. Moran, agent of the defendant, informed plaintiff that he had obtained a receipt from the United States Government for said bonds, and that at the maturity of said bonds in September 1928, the bonds would be paid, and that in the meantime the plaintiff was accumulating interest at the rate of 4 3/4 with the defendant Society, and that the said agent had been transferred to the Wilmington office and would not be in the Faison section until the Fall of 1928, and that he would call upon the plaintiff during the Fall of 1928.

"8. That on March 7th, 1929, the plaintiff having been informed by H. T. Ray, a school teacher residing in Faison, N. C., that he was unable to obtain a similar policy applied for by him through the said agent, O. A. Moran, he advised the plaintiff to write C. C.

Hazzell, Manager of the defendant Society at Raleigh, N. C.

"9. That on March 7th, 1929, and again on March 14th, 1929, the plaintiff informed the manager of the defendant Society at Raleigh, N. C., of the payment of $521 to the said O. A. Moran, Agent.

"10. That on March 16th, 1929, the plaintiff in person delivered the said official receipt to said defendant's manager at Raleigh for the purpose of inspection.

"11. That prior to the dates herein alleged the defendant had constituted O. A. Moran its agent under a written contract, the original of which or a copy thereof will be furnished to the Court by the defendant. That the following is Section 8 of the said contract:

"'8. The agent is not authorized to make, alter or discharge contracts for the Society, or waive forfeitures, grants permits, name special rates, guarantee dividends, or bind the Society in any way, and is not under any circumstances authorized to receipt for deferred or renewal premiums, or to make any endorsement on the policies of the Society; and his powers shall extend no further than as herein expressly stated; The agent shall not receive any moneys due or to become due to the Society, unless authorized in writing.'

"12. That the plaintiff had no knowledge of the contents of said written contract, nor of any specific limitation upon the agency of said O. A. Moran until after this action had been instituted and she was so advised by the answer filed by the defendant therein.

"13. That the territory in which O. A. Moran was authorized to act as agent for the defendant included the town of Faison in which the plaintiff resided, and said agent was authorized by the defendant to accept at the time of taking an application the initial premium for the policy applied for and to give a receipt on an official form furnished him by the defendant, said form being as set forth in paragraph 6 hereof.

"14. That the defendant, prior to the institution of this action, tendered to the plaintiff the sum of $105 representing the amount of the first premium that would have been due on said policy and being the only amount that the said agent Moran would have had authority to collect as premium on the policy applied for by the plaintiff, under his agency contract.

"It is further agreed that this cause may be heard before Honorable Frank A. Daniels, Resident Judge of the 4th Judicial District, either in or out of the District."

Upon the foregoing statement of facts agreed, judgment was rendered as follows:

"This cause coming on to be heard before Hon. F. A. Daniels, Resident Judge of the Fourth Judicial District, by consent of the parties, and upon an agreed statement of facts; and the Court finding that Agent O. A. Moran collected of the plaintiff the sum of $521.00, of which $105 was the first premium on the policy applied to said Agent for by the plaintiff, and the Court being of the opinion that the Agent could legally collect only the amount of the first premium under the agency contract set out in the case agreed.

"Now therefore it is ordered and adjudged that the plaintiff recover of the defendant the sum of $105, which was tendered to the plaintiff by the defendant, and being the amount of the first premium, and that the plaintiff pay the costs of this action.

"F. A. Daniels, Judge, etc.

"This 1st day of February, 1930."

From this judgment, plaintiff appealed to the Supreme Court.

Clifford & Williams, of Dunn, for appellant.

S. Brown Shepherd, of Raleigh, for appellee.

CONNOR J.

At the trial of this action in the superior court, it was agreed by the parties that O. A. Moran, as the agent of the defendant was duly authorized to solicit applications, to be submitted by him to the defendant, for policies of insurance on the lives of the applicants, and also for "Retirement Annuity Policies." It is not contended that he had authority to issue policies in the name of the defendant, or to bind the defendant by contracts with respect to the same. He was required to submit all applications for policies procured by him to the defendant at its home office in the city of New York, for acceptance or rejection by the duly...