Insurance Co. of North America v. Thornton

130 Ala. 222 | Ala. | 1900

Lead Opinion

McCLELLAN, C. J.

This is an action by H. G. Thornton and others, partners, against the Insurance Company of North America on an alleged verbal contract of insurance of a stock of merchandise. For the purpose of reviewing the action of the trial court in re'fusing the affirmative charge requested by the defendant, the tendencies of the evidence must favorable to the plaintiffs may be stated as follows: One Glenn was the agent of ten or twelve insurance companies including the defendant. He resided and had his office at Dothan, in Henry county, Alabama. The territory covered by his agency for defendant included Dothan and its vicinity. As such agent in that territory, he was supplied by the company with blank applications, etc., and with blank policies duly signed by the proper officers of the company. The certificate of authority issued to him by the company invested him “with full power to receive proposals for insurance against loss or damage by fire, in Dothan and vicinity, to fix rates of premiums, to receive moneys, and to countersign, issue, renew, and consent to the transfer and assignment of policies of insurance signed by the president and attested by the secretary of said company, and in all manner to attend to the business and duties of said agency, subject to the rules and regulations of said company, and to such instructions as may from time to time be given by its officers;” and it was further set forth in said certificate that “it is expressly understood that all policies shall be null and void and of no binding effect upon this company if issued upon property not situated within the district in which the agent issuing the same shall reside and for which he is appointed.” Glenn had been carrying on this agency for defendant for several years receiving applications and premiums and filling up and countersigning policies intrusted to him bearing the signature of the president of the company and attested by its secretary. For three or four months prior to the transaction liere involved, one McGilvray had been working in Glenn’s office learning the insurance business and assisting Glenn. During that time he had gone to Hartford, fifteen or twenty miles from Dothan, to Pinckard, twelve miles distant, and to Headland, twelve or fifteen miles from Dothan, under directions and instructions of Glenn to take blank applications for insurance in defendant company, go to mid places for the purpose of making contracts of insurance on property there situate, and if lie got any applications he was to close the contracts of insurance, applied for as of the date of the applications respectively, and send the applications to Glenn, whereupon Glenn would issue the policies applied for and «end them to the applicants. He did make such contracts at these several places, and sent the applications for policies to Glenn at Dothan, and policies were countersigned and issued by Glenn on these applications. About, the last of February, 1899, McGilvray went to Enterprise, a place about thirty-five miles by rail from Dothan, for the purpose of soliciting insurance. He testified: “I went there under instructions from Mr. 'John A. Glenn [defendant’s agent] of Dothan, who was engaged in the insurance business at that. time. * * * He told me to take some applications for the North America Insurance Company [defendant] and go over there, and ‘if you get any applications, I will write the policies and send them to you, and you will just consider it covered from the date of application.’ He told me to receive the premiums, and at the end of the month we would have a settlement, ¿and he -would give me my commission and take the rest.” On March 1, 1899; McGilvray acting under these instructions from Glenn took the applications of Thornton’s firm for a policy of insurance on their stock of goods at Enterprise, agreed with Thornton that the risk began on that day, and mailed the application to Glenn at Dothan to have the policy written up and sent to him, McGilvray, at Enterprise; and on March 17, he collected the premium from Thornton, deposited it in a local bank, wrote to Glenn that the premium ivas in said bank subject to his, Glenn’s, draft. On March 22, 1899, the stock of merchandise covered by said alleged contract of insurance ivas damaged by fire to the extent of four hundred and fifty dollars. Glenn was away from his office when the application sent by Mc-Gilvray reached- there and continued absent until the day after the fire, neither the envelope containing the application nor McGilvrav’s letter relative to the premium was opened until Glenn’s return, so that he had no notice of the -transaction until the loss had occurred and come to his knowledge. He then repudiated the transaction, refused to accept the premium and denied defendant’s liability in the premises. As bearing on the inquiry whether Enterprise was within the territorial limits of Glenn’s agency, it was -shown that that place -was between Dothan and Elba by the railroad route, and defendant company had an agency at Elba; but whether Enterprise was nearer Elba or Dothan is not shown, nor does it appear that the Elba agency embraced Enterprise. On these tendencies of the evidence, Glenn was, of course, the general agent of defendant within the limits of the Dothan agency, and it was open to inference by the jury that Enterprise was within those limits; and hence was in the vicinity of Dothan within the meaning of Glenn’-s authorization of agency and hence further that the agency embraced the country surrounding Dothan to the distance of thirty-five miles. Upon such finding of the fact by the jury, the company is held to the contemplation that Glenn should do whatever was reasonably necessary to secure its share of the fire insurance business within that territory and to have authorized him thereunto. Upon; authority recognized as sound by this court, the appointment by Glenn of sub-agents to -do for the company what he himself was empowered to do was within the authorization of the company to him, such sub-agents being presumed to he necessary to the proper representation -of the company’s interest throughout so large territory, and their appointment by Glenn to be impliedly authorized by the company itself. So it was ruled in the strikingly analogous case of Kuney v. Amazon Ins. Co., 36 Hun. 66. One Miller was the agent of the insurance company under an appointment which gave him “full powers to receive proposals for insurange against .loss or damage by fire and lightning, to act as surveyor, to -appoint surveyors for property to be insured in Seneca county, New York, and vicinity, and insurance there to make, by policies of said Amazon Insurance Company, countersigned by said Miller, agent, and renew the same, grant assent to assignments or transfers, and in all otlier matters and tilings, to attend to tlie business and duties of said agency in tlie manner and form prescribed by the company.” Tlie agent tliere as here was supplied with blank policies signed by the company’s executive officers', which he was authorized to fill up and issue to applicants 'for insurance. He ivas also authorized, as was Glenn in this case, to fix the premiums to be paid by 1he insured, etc., etc. There, as in this case, the domicil of the company was in a State foreign to^ the agency. There as here the contract of insurance;! was made with a sub-agent, one Jacoby appointed by] Miller, and no policy was issued, and the transaction] between the sub-agent and the plaintiff did not come; to the knowledge of the agent until after the loss occurred. The court said: “The defendant to escape lia-i bility on this contract made in its name by one purport* ing to act- for it, disclaims that Jacoby was authorized in any form or manner, or under any circumstances, to make and conclude a contract of this character. The plaintiff's position on the question of Jacoby’s authority to make the ‘contract- is this: that Miller as the general agent of the company, having charge of its agency at- Seneca Falls, was authorized under his commission and by virtue of his position as superintendent of defendant’s business at that place, to employ all necessary agents, clerks and surveyors to enable him to conduct the business with accuracy, intelligence and promptness. That when he -did, in fact, employ others to act under him to do such things as he himself might do within the limits of his powers and in connection with bis agency, their acts and contracts would be binding on the company the same as if made personally by Miller, the general agent. We concur in plaintiff’s position as a legal proposition necessarily resulting from the nature of the power expressly delegated, and from the character of the business and the distance the local offices were from the home department- of the -defendant’s business. It is not -to be presumed the company expected or intended that its general agent, in a foreign State, would give personal attention to- all its affairs, and he himself make every contract of insurance entered into by the company within the territorial limits of hi® agency. No such limitation on Ms powers is contained in Ms written commission, and it is unreasonable to' suppose that the company intended to that extent to restrain Ms action and operation. He was authorized to insure property in several of the largest counties in the State, wher e a great amount of valuable property seeks insurance against fire.” The case of Krum v. Jefferson Fire Ins. Co., 40 Ohio St. 225, is also much like the one at bar. There Towson was the general agent of the company in Lancaster and vicinity. The extent of the territory covered by his agency was evidenced by what had been done by him during the two or three years he acted as agent prior to the transaction involved in the suit. During this time, with the knowledge of the company, he had received applications for insurance upon property situated in Fairfield, Perry and Licking counties. The court said: “It is evident that in this large extent of territory, Towson could not secure for the company its fair proportion of the business of insurance without the aid of solicitors and sub-agents. The interest of the large business committed to his care required the assistance of sub-agents. I-Ie did not exceed his authority in appointing a sub-agent in each of the counties of Fairfield, Licking and Perry to solicit applications for insurance in the Jefferson Fire Insurance Company, to fix the rates of premium, to receive the premiums and to forward the applications to him at Lancaster. Such appointees would he the agents of the company even if its officers had no actual knowledge of their appointment.” And the company was held liable on a contract of insurance made with sub-agent Thompson, though the application for the policy did not come to the hands of the agent Towson until two or three days after the fire because of his absence from his office, and the company then refused to issue the policy. And the general principle that where sub-agents are necessary to the proper transaction and carrying on of the business committed to ‘the agent, the latter has implied authority to appoint sub-agents, is declared in effect in the case of Bodine v. Insurance Co., 51 N. Y. 117, s. c. 10 Am. Rep. 566.

The maxim, delegatus non potest delegare does not apply in such case, though the service inherently is of a personal character, because authority to delegate delegated powers is found by implication from the extent and general nature of the business in the original authorization to the general agent: The power delegated to the agent in express terms being such as to require the services of sub-agents carries with it the power to appoint sub-agents whatever the nature of the service in respect of being in itself -a personal confidence may be, for a principal may, of course, delegate to an immediate agent clothed with duties 'involving the exercise of persona] skill and judgment, the power of devolving such duties upon sub-agents. It was the absence of bases for the application of this doctrine of implied authorization to appoint sub-agents from the cases of Waldman v. Insurance Co.,91 Ala. 170, and Insurance Co. v. DeJarnett, 111 Ala. 218, that distinguishes those cases from the present one: There was in those cases no ground, such as is found here, for saying that although the duties imposed on the agent were of a personal nature, he yet could delegate them because, authorized so to do by necessary or fair implication in his own commission — a proposition recognized in the cases cited in Waldman v. Insurance Co.—Johnson v. Cunningham, 1 Ala. 258; Insurance Co. v. Heeth, 49 Ala. 538. And while we adhere to what was there 'said and repudiate a contrary dictum in the case of Insurance Co. v. Catchings, 104 Ala. 176, we hold that they do not apply here.

Upon this part, of the case our conclusion, therefore, is that it was open to the jury to find that Glenn had authority to appoint MeGilvray to make the alleged contract sued on, and hence that the court properly refused the affirmative charge requested by the defendant.

But, as has been indicated in what we have said, the right of the jury to find that Glenn had authority to appoint MeGilvray a sub-agent of the defendant to make this alleged contract of insurance with plaintiffs at Enterprise depended upon their reaching the conclusion from all the circumstances of the transaction that Enterprise was “in the vicinity” of Dothan, within the meaning of Glenn’s commission,- for there is no pretense either that Glenn actually had any authority or that he was in any way held out by the defendant as having any authority except in Dothan and its vicinity. While there may be a case or two which seem to hold that an agent under such commission may bind his principal beyond the territorial limits of his agency .upon the bare consideration that within such limits he is a general agent, we cannot subscribe to the doctrine. To establish it would lead to most astounding results. It would be in effect to deprive a principal of all power to circumscribe the territory to be covered by the agent, to deny Mm the right to confine the exercise of the delegated authority to a particular town, or county, or State or even country, and an agent for “Dothan and vicinity” might not only exercise his authority in, and in respect of subject-matter situated in, Mobile or Chicago, California, or Maine or Canada or China, but he might appoint sub-agents to monopolize and carry on the principal’s business in all those distant places and countries. To the contrary, we hold that under such an appointment the authority' of the agent, though he be a general agent in the broadest sense within the prescribed area, cannot be exercised either by himself or through sub-agents outside of the territorial limits set down in his commission; and that in this case the defendant company was not at all bound by the acts of McGiilvray unless the locus of the risk which he nominally undertook for the company was within the vicinity of Dothan in the sense the term is used in Glenn’s appointment. A part of the court’s general charge to the jury to which an exception was reserved is not in harmony with these view®. It i'si as follows: “The certificate of [Glenn’s] authority introduced in evidence tends to- limit this authority to a particular locality; but this would be in the nature of private instructions to him [Glenn] so far as other parties are concerned, and the limitations contained therein are not such as to defeat the appointment by Mr. Glenn of a sub-agent,” meaning, of course and necessarily, a sub-agent beyond the territory covered by Ol(Tin’s agency.. There was abundant,evidence to lead the jury to the conclusion that the risk assumed to be undertaken by MeGilvray -purporting to act as sub-agent for defendant under Glenn was clearly outside of and beyond Glenn’s territory; and this instruction authorized*«them to hold the defendant bound by Mc-Gilvr*i*fs acts although they should find in line with tfiiS evidence that he was acting in respect of a matter entirely 'beyond the limits of the defendant’s authorization to Glenn. This part of the court’s charge was manifesty erroneous, and most likely very injurious to the defendant, and the giving of it must work a reversal of the judgment.

We discover no eiTor in the other parts of the general charge to' which exceptions were reserved nor in the rulings of the court upon charges requested. All these rulings proceed upon the > ground' that if Enterprise was within Glenn’s territory, he had a right to bind the company on risks at that point through a sub-agent, a proposition we have considered and approved.

The fact that Glenn was defendant’s general agent for Dothan and vicinity was clearly proved by competent evidence. We do not think the court erred in any of its rulings as to the admissibility of the acts and declarations of this general agent which tended to show the limits of the territory embraced in his agency.

Reversed and remanded.

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Dissenting Opinion

Tyson, J.,

dissenting. — In the absence of all evidence that the insured had knowledge of the limitation in t-lm power of attorney to Glenn restricting his doing of business for Iris company to a prescribed territory, and in view of the requirement of the statute regulating the manner of doing business by foreign insurance companies to the end of requiring their agents in this State, to be regularly’commissioned and licensed, before the company can make contracts of insurance on property in this State, and when so commissioned and licensed the agent is authorized to make contracts of insurance in Alabama, I think under the facts of this cave that the limitations in the power of attorney can have no effect upon the liability of the defendant upon the contract. — Code, §§ 2575, et seq., especially §§ 2585 ■and 2614.

It is of no consequence that the •commission and license to Glenn required to be issued under these sections of the Code do not appear in the evidence or that the evidence fails to disclose whether or not they had been issued to him. It will be presumed that his company and that he complied with the statutes in the absence of proof to the contrary. Especially will thi^ pi’e-sumption be indulged since a failure to comply would forfeit to his company the right to do business in this State and impose upon him a personal liability for the amount of the loss sustained.

We have then the case of an agent commissioned by the State of Alabama, under the statute, to do business anywhere in the State for the defendant, with a secret limitation upon his authority as to territorial limits, making a contract of insurance with the assured who had no • knowledge of the limitation, but who has the right to presume that the agent is acting under the general authority conferred upon Mm by his commission from the State of Alabama. On this state of facts, it does not seem to me that there can be a doubt, that the defendant, as matter of law, is liable, if the sub-agent was authorized to make the contract, a question, lightly held by my brothers, to be one for the determination of the jury. ,

I do not see how the case, on the point under consideration, can he differentiated upon principle from this: Suppose A., an insurance company, constitute B. his general agent to make insurance contracts in Alabama, which is exhibited to C. with whom a contract of insurance is made, but B. has- a secret limitation upon his authority restricting him to one county of which C. is not a resident and in which the property proposed to be insured is not located, which is unknown to C.; could it be doubted that A. was hound by the contract? I think not. This is hut the application of an elementary principle which has often been declared and enforced by this court in many cases.—Piedmont & Arlington Life Ins. Co. v. Young, 58 Ala. 476; Montgomery & Eufaula R’y Co. v. Kolb, 73 Ala. 396; Louisville Coffin Co. v. Stokes, 78 Ala. 372; Wheeler v. McGuire, 88 Ala. 398; Gibson v. Snow Hardware Co., 94 Ala. 346; Tenn. River Trans. Co. v. Kavanaugh, 101 Ala. 1; Montgomery Furniture Co. v. Hardaway, 104 Ala. 100; Sweetser v. Shorter, 123 Ala. 518.

It seems to me tliat what I have said is sufficient to point out the error into which the court has fallen. It may be that the limitation in the power of attorney is void hs being in contravention of the authority conferred by the commission issued to • him under the statute and of the policy declared by the statutes themselves, if not in direct Adulation of their plain mandate, blow ever, as to how this is, it 'would, be unnecessary to decide, and I merely suggest it Avithout expressing an opinion.

Case Details

Case Name: Insurance Co. of North America v. Thornton

Court Name: Supreme Court of Alabama

Date Published: Nov 15, 1900

Citation: 130 Ala. 222

Court Abbreviation: Ala.