Turner v. Supreme Lodge, K. P.

• Decision Date: 18 April 1933
• Docket Number: 20695.
• Citation: 27 P.2d 612,166 Okla. 286,93 A.L.R. 647,1933 OK 244
• Parties: TURNER v. SUPREME LODGE K. P.
• Court: Oklahoma Supreme Court

27 P.2d 612

166 Okla. 286, 93 A.L.R. 647, 1933 OK 244

TURNER v. SUPREME LODGE K. P.

No. 20695.

Supreme Court of Oklahoma

April 18, 1933

Rehearing Denied Dec. 12, 1933.

Syllabus by the Court.

1. "A soliciting agent is merely a special agent, and as a general rule, has authority only to solicit insurance, submit applications therefor to the company, and to perform such acts as are incidental to that power." 32 C.J. § 145 page 1067.

2. An agreement between a soliciting and collection agent of an insurance company and the insured whereby the former accepts personal property in satisfaction of the premium due on the policy does not bind the company in the absence of an express authorization to accept such personal property in lieu of money for the premium and no valid contract arises by such agreement in the absence of consent, knowledge, acquiescence estoppel, or ratification by the company.

3. "An insurance agent ordinarily has no authority to accept anything other than money or an instrument calling for the payment of money or a premium, such as personal property or professional services, or even to cancel his own indebtedness to the insured or accept credit for merchandise on his own account." Couch Cyclopedia of Ins. Law, vol. 2, § 537, p. 1646.

4. An agreement entered into between the soliciting and collection agent of the insurance company whereby the insured sold a bull to the agent of said insurance company, and said agent agreed to pay the premium of said insured thereafter falling due to the amount of the price of said bull, the same was nothing more than a private agreement between said parties whereby the soliciting agent of the insurance company became the agent of the insured. And in the absence of any custom, knowledge, acquiescence, or consent on the part of said insurance company relative to said agreement, there is no basis on which to assert the doctrine of estoppel or of ratification against the insurance company.

Appeal from District Court, Osage County; Jesse J. Worten, Judge.

Action by Lida Isabel Grossman Turner against the Supreme Lodge Knights of Pythias. From an order sustaining a motion for a new trial, plaintiff appeals.

Affirmed.

Holcombe & Lohman, of Pawhuska, and H. M. Curnutt, of Barnsdall, for plaintiff in error.

J. A. Denny and John V. Beveridge, both of Tulsa, for defendant in error.

McNEILL Justice.

This case involves an appeal from an order sustaining a motion for a new trial. The parties will be referred to as they appeared in the trial court. The action arose on a policy of life insurance in the sum of $2,000 issued on October 12, 1922, by the Supreme Lodge Knights of Pythias to William P. Grossman, deceased, in consideration of a monthly premium in the sum of $5.20. After the death of the insured, his widow, the beneficiary in said policy, plaintiff in the trial court, plaintiff in error, herein, instituted suit against said lodge to recover on said policy.

Plaintiff alleged in substance that said policy was in force and effect at the time of the death of said decedent by reason of the fact that said policy, after the payment of thirty-six monthly premiums of $5.20, had a surrender value of $244, and that this surrender value would be applied automatically to the payment of the monthly premiums without any further payments until that surrender value was exhausted. Said plaintiff further alleged that in the month of June, 1925, the insured sold a bull for $35 to Thomas DeWalt, who was the agent of said defendant for the purpose of the collection of premiums, and that said agent agreed at said time to pay said premiums for said insured for a period of seven months from said date; that this amounted to a payment of said premiums thereafter due to the amount of $35. Plaintiff prayed judgment on said policy in the sum of $2,000, and interest.

The defendant answered by general denial and in addition thereto specifically denied that the premiums under said policy of insurance were paid by the insured for at least thirty-six consecutive months as alleged by plaintiff. Said defendant also denied the alleged contract made with said agent, and further alleged in its answer that said insured defaulted in the payment of his premiums upon said policy in July, 1925. That said policy was thereafter canceled and said insured was dropped from the rolls of said insurance society for nonpayment of dues. Defendant filed a general demurrer to the amended petition of plaintiff on the ground that the petition failed to state a cause of action. Defendant continued to stress this question by an objection to the introduction of any evidence and by interposing a demurrer to the evidence of plaintiff, on the ground that the same was insufficient to establish a cause of action in favor of plaintiff and against said defendant. At the close of the testimony said defendant moved the court to direct a verdict for the defendant on the same ground. The court overruled all of these contentions and defendant took its exceptions. Defendant renewed these grounds in its motion for new trial and alleged additional reasons for the vacation and reversal of said judgment, including the refusal to give certain requested instructions embodying the same theory presented by said demurrer and request for a directed verdict, and also assigned in said motion the error of the court in giving instructions numbered four and six, which were based upon the allegations of said petition of plaintiff that said agent agreed to pay said premiums. The court sustained said motion for a new trial on the ground of the insufficiency of said petition to state a cause of action against said defendant, and upon the giving of instructions numbered four and six, which were in harmony with the allegations of said petition.

It appears that plaintiff relied on said agreement to recover on said policy in order to maintain her theory that thirty-six monthly premiums had been paid so as to receive the benefit of the surrender value clause, which would automatically extend the insurance beyond the death of the insured. The agreement as alleged by plaintiff is as follows:

"(5). That on or about June 10th, 1925, the said William P. Grossman sold and delivered to Thomas DeWalt one certain bull at the agreed price of $35.00 and the said Thomas DeWalt thereby became indebted to the said William P. Grossman in the said sum of $35.00.

That thereafter, and on the same day, and after the payment of all monthly dues to that date, and while said policy was in full force and effect, the said Thomas DeWalt, who was then and there the duly authorized and acting agent of the defendant for the collection of premiums and solicitation of insurance, entered into an agreement with the said William P. Grossman whereby it was agreed that the indebtedness from the said Thomas DeWalt to the said William P. Grossman should be liquidated by the said Thomas DeWalt paying to the defendant insurance company the premiums which might thereafter become due in favor of the insurance company and against the said William P. Grossman on such certificate of insurance, to the amount of $35.00. That said amount paid all required premiums on such certificate of insurance up to and including the month of November, 1925, which was more than thirty-six months after the date of the issuance of said certificate of insurance."

The real question apparently centers around these allegations, as to whether the petition alleges facts sufficient in conjunction with the other formal allegations to constitute a cause of action in favor of plaintiff and against defendant. The defendant contends that these paragraphs pleaded purely a personal transaction between the insured and said agent and that said agreement is not binding on the defendant; that before said plaintiff could bind said defendant by said agreement it was necessary that the power and authority of the agent be affirmatively alleged; that he was acting in a representative capacity and within the scope of his authority. The defendant urges that it had no knowledge of any such agreement or transaction; that it did not authorize, acquiesce in, or ratify the same; that it did not at any time waive any of the provisions of said policy relative to the payment of premiums but at all times after the month of June, 1925, considered said policy as lapsed, and the insured dropped from its membership list; and that the insured was so notified by correspondence from the home office of said defendant.

During the trial said agent, however, testified that he had purchased a bull from the insured some time during the month of January, 1925, for the sum of $35 to reimburse him for premiums which said agent had heretofore advanced for said insured; that said agreement was a different agreement from that as alleged by plaintiff. In short, it is defendant's theory that it was necessary to allege that said DeWalt was acting as the agent of the company in making said purported agreement with the insured on behalf of said defendant, or that said transaction was for and on behalf of defendant, or that said agent had authority to enter into such agreement, or allegations of like import, before said petition stated a cause of action against said defendant.

The contentions resolve themselves into the question as to whether an agreement of an agent of a fraternal beneficial association to pay the monthly premiums of one of its insured members as they fell due in return for the sale and delivery of a bull to said agent of said association who was authorized to collect said monthly premiums for said association, is binding upon said association in the absence of pleading or proof that said agent had authority to make such an agreement or without proof...