113 Neb. 481 | Neb. | 1925
Action by plaintiff, based upon an alleged oral contract of insurance with defendant, to recover for the loss of a barn by fire. The defendant denied the existence of the contract and denied the authority of its agent to make such a contract in its behalf. At the close of the testimony the trial court directed the jury to return a verdict for the defendant, which was done, and thereupon rendered judgment for the defendant. Plaintiff appeals and now urges that the question of the authority of the agent to make the contract should have been submitted to the jury.
The record shows that in November, 1913, the plaintiff applied to Wentz Company of Aurora, Nebraska, agent of the defendant insurance company, for insurance upon a
In March, 1920, this barn was slightly damaged by a windstorm. At the same time another barn owned by the plaintiff located on another quarter section of land was also damaged. On being notified of this loss, the agent of defendant came to plaintiff’s. home, examined the barn in question, and later plaintiff received defendant’s check in settlement of the loss on this barn.
In September, 1920, the barn was totally destroyed by fire. Meanwhile Wentz Company, the agent of the defendant, had failed in business, and other parties were appointed agents for the company. After the fire the plaintiff for the first time learned that no policies had been issued by the defendant based on the application of November 22, 1918.
For some reason, which is not explained, Wentz Company did not send to the defendant the plaintiff’s application dated November 22, 1918, but on February 11, 1919, it sent an application for insurance on the property in question to the defendant, signed: “George R. Cline, Applicant, by Wentz Co., Agents.” On the back of this application was an indorsement showing that the premium, $19.25, had been paid in cash. This application was rejected by the defendant and returned to Wentz Company February 21, 1919. Plaintiff was never notified until after the loss that a policy had not been issued nor was the premium which he paid ever returned to him.
While it is true that, as between the defendant and its agent, Wentz Company, the latter was not authorized to make a contract of insurance on farm property which would bind the defendant, yet we think, under the peculiar facts disclosed by this record, that the question of the agent’s apparent authority to make such a contract should have been submitted to the jury. The rule is well settled that-an insurance company is bound by all acts, contracts or representations of its agent, whether general or special, which are within the scope of his real or apparent authority, notwithstanding it is in violation of private instructions or limitations upon his authority, of which a person dealing with him, acting in good faith, has neither actual nor constructive knowledge. In Rankin v. Northern Assurance Co., 98 Neb. 172, it was held:
“The contracts of a local agent of an insurance company are binding upon the company if within the apparent-authority of the agent and are entered into in good faith by the insured.”
Besides this, it may well be considered that the defendant, by keeping the premium and paying the damage to the barn occasioned by the windstorm, has ratified the acts of its agent in making the contract. Defendant knew that the premium had been paid by the plaintiff, and if it declined to accept the risk it was its duty to see that the money was returned. It is not sufficient that it may have directed Wentz Company to return the premium. Wentz Company was its agent and its failure to do this was the failure of the defendant.
It is urged by the defendant that an oral contract for insurance Is invalid. This court, however, is committed to the rule that an oral contract for insurance, certain as to parties, time, amount, rate, and property, is a valid contract. In Clark v. Bankers Accident Ins. Co., 96 Neb. 381, it was held:
“Ordinarily it is within the power of an insurance agent to make an oral contract of insurance, or to agree that the insurance shall be in force after the application is signed, and the premium paid, and before a policy is actually written, unless the assured is, or should be held to be, apprised in some manner, either in the application or otherwise, that the insurance will not be in force until the application is approved at the home office and the policy issued and delivered.”
See, also, Bridges v. St. Paul Fire & Marine Ins. Co., 102 Neb. 316; Glatfelter v. Security Ins. Co., 102 Neb. 464; Kor v. American Eagle Fire Ins. Co., 104 Neb. 610.
Not infrequently applications for insurance contain a stipulation to the effect that the insurance will not become effective until the application is approved at the home office and a policy issued thereon and delivered. The application signed by the plaintiff contained no such provision, and there was nothing in it to apprise him that the agent could not accept the application and issue a policy thereon.
In view of the entire record, we think the question of the
In the case of Johnston v. Milwaukee & Wyoming Investment Co., 46 Neb. 480, it was held:
“Where a principal has, by his voluntary act, placed an agent in such a situation that a person of ordinary prudence, conversant with business usages and the nature of the particular business, is justified in presuming that such agent has authority to perform a particular act, and therefore deals with the agent, the principal is estopped as against such third person from denying the agent’s authority. Whether or not an act is within the scope of an agent’s apparent authority is to be determined under the foregoing rule as a question of fact from all the circumstances of the transaction and the business.”
See Thomson v. Shelton, 49 Neb. 644; Phœnix Ins. Co. v. Walter, 51 Neb. 182; Holt v. Schneider, 57 Neb. 523.
The judgment of the district court is reversed and the cause remanded for further proceedings.
Reversed.
Note—See Insurance, 32 C. J., secs. 140, 180, 181, 209.