Violette v. Insurance Co. of the State of Pa.

• Decision Date: 30 August 1916
• Docket Number: 13275.
• Citation: 159 P. 896,92 Wash. 685
• Court: Washington Supreme Court
• Parties: VIOLETTE v. INSURANCE CO. OF THE STATE OF PENNSYLVANIA.

159 P. 896

92 Wash. 685

VIOLETTE v. INSURANCE CO. OF THE STATE OF PENNSYLVANIA.

No. 13275.

Supreme Court of Washington

August 30, 1916

Department 2. Appeal from Superior Court, Chelan County; Wm. A Grimshaw, Judge.

Action by J. B. Violette against the Insurance Company of the State of Pennsylvania. From a judgment of nonsuit, plaintiff appeals. Reversed, and judgment ordered for plaintiff.

C. B. Hughes and Hughes & Adams, all of Wenatchee for appellant.

Granger & Clarke, of Seattle, for respondent.

HOLCOMB J.

This action was to recover on a fire insurance policy for the loss of a certain stock of liquor. Appellant, having been nonsuited below, prosecutes this appeal.

There is no serious conflict in the evidence, which shows that C E. and M. F. Hamilton, husband and wife, respectively, were each the authorized agent of several insurance companies. Appellant was experiencing trouble in keeping his stock of liquor insured, and was notified by C. E. Hamilton on December 28, 1914, that a former policy of the Prussian National Insurance Company on the liquor had been ordered canceled, but that he would write the risk in another company, to which appellant assented. C. E. Hamilton then wrote a policy in respondent company covering the stock of liquor and countersigned the same as agent on December 29 1914. The loss occurred by fire on the next day, and the policy was not delivered to appellant until after the loss, as he was away on a business trip. After this suit was commenced it was discovered that M. F. Hamilton, and not C. E. Hamilton, was the duly licensed agent of respondent, and that after she had taken out the license she turned over the entire business to her husband and delegated to him all the powers as agent that she possessed, including the power to countersign policies without any express authority to do so from her principal.

Respondent's first defense to the action was that C. E. Hamilton was not its agent, and that M. F. Hamilton had no authority to delegate the entire agency itself to a third person without the principal's knowledge or consent, and therefore that C. E. Hamilton could not bind respondent by his acts. It therefore becomes incumbent on appellant to prove C. E. Hamilton respondent's agent, and to do so he must prove either that C. E. Hamilton was an actual agent of respondent or that respondent was estopped to deny the existence of such agency.

There is no contention that C. E. Hamilton was actually appointed by respondent as its agent, and, if appellant is to prevail, it must be upon the theory of a sort of estoppel. C. E. Hamilton was known generally in Leavenworth as 'Gene,' and was so known to the appellant. Other policies were issued by respondent company in Leavenworth, and, as M. F. Hamilton said she never had anything to do with the business, such policies must have been written by 'Gene' Hamilton. Strout, the general manager of respondent in Washington located in Seattle, had known 'Gene' (C. E.) Hamilton for about six years prior to the trial of this case, frequently meeting and doing his company's business with him, but did not know his initials, although he supposed they were M. F. It was simply a case of mistaken identity, as he knew 'Gene' Hamilton well and personally, thought he was respondent's agent, and knew the agent's initials were M. F., but thought those were Gene's initials. All the correspondence carried on between the Hamiltons and Strout was done by C. E. Hamilton, although he signed the letters as M. F. Hamilton and attended to the entire business of the agency. During the time appellant was procuring the insurance from C. E. Hamilton he supposed, as did Strout, that Gene (C. E.) Hamilton was the agent, since he attended to all the transactions; and never during any of his visits to the office did he see M. F. Hamilton, nor did he know that she was interested in the business in any manner, or that any other than C. E. Hamilton was the agent; nor did he see anything that would put him on inquiry.

It is evident that C. E. Hamilton had at least ostensible authority to act as respondent's agent, and appellant, relying upon this ostensible authority, dealt with C. E. Hamilton as such agent. 'Ostensible agency,' as defined by Mechem in his work on Agency, vol. 1 (2d Ed.) § 57, is where the principal intentionally or from want...