Sellers v. Commercial Fire Insurance

105 Ala. 282 | Ala. | 1894

BRICKELL, C. J.

It is obvious the admissibility of the evidence excluded is to be tested by the inquiry whether Trimble & Co., when a member of the firm prepared the application for insurance in which occurred the misdescription of the location of the storehouse, were the agents of the defendant. If there was legal evidence having a tendency to support the affirmative of this inquiry, the evidence excluded ought to have been 'received, leaving the jury to pass upon its sufficiency and credibility, however much may have been the conflict in the evidence touching the transaction to which it related. If there was an absence of such evidence, or, if the legal evidence, without conflict, showed that in the preparation of the application and the procurement of the insurance, Trimble & Co. were the agents of the plaintiffs, the evidence was properly excluded. “Res inter alios acta nocere non debit,’’ is a maxim of the law of evidence of great practical usefulness, and of the highest importance. “On a principle of good faith and mutual convenience, a man’s own acts are binding upon himself, and are, as well as his conduct and declarations, evidence against him ; yet it would not only be highly inconvenient, but also manifestly unjust, that a man shall be bound by the acts of mere unauthorized strangers ; and if a party ought not to be bound by the acts of strangers, so neither ought their acts or conduct to be used as evidence against him.” — Broom’s Legal Maxims, 954. Hence, agency is a fact, the burthen of proving which rests upon the party affirming its existence ; and it must be proved by other evidence than the acts or declarations of the supposed agent, before it can be assumed that he represents and has authority to affect or bind the principal. — T Brick. Dig. 54, § 9 ; 2 Wood Fire Ins., § 420.

Contracts of insurance are usually negotiated by the insurer through the intervention of agents ; and this is so of necessity, when, as is now almost universally true, the insui’er is an incorporated company. The company can act only through its officers and agents ; and to the officers and agent representing it at its principal place of business, it has the power to add any number of special or general agents it may deem proper. It is these agents with whom the insured frequently negotiates insurance, and upon whom reliance is placed. The doctrine now generally accepted is that when an agent of a company, having authority to solicit insurance, or to receive applications for insurance, voluntarily, or at the request of the applicant, assumes to prepare the application and by negligence, or mistake, or intentionally, inserts therein matter which is untrue, the applicant having truly stated the matter, procuring the signature of the applicant to the application, if the company receives the application and premium and issues the policy, in the event of loss, it will be estopped from insisting on the falsity of the matter to avoid liability, though the truth of the matter may be warranted by the insured. And this is true, though the policy may declare that when the application is made through an agent, he shall be deemed the agent of the applicant, or that the applicant shall be responsible for his representations.—Union Mut. L. Ins. Co. v. Wilkinson, 13 Wall. 231; Am. L. Ins. Co. v. Mahone, 21 Wall. 152; Ala. Gold Life Ins. Co. v. Garner, 77 Ala. 210; Williamson v. N. O. Ins. Association, 84 Ala. 106; Creed v. Sun Fire Office, 101 Ala. 522; May on Insurance, (2d Ed,), § 143.

The doctrine necessarily rests upon the hypothesis, that the person by whose acts, declarations, or mistake, the company is to be estopped, was its actual agent for some purpose; having some authority to represent and bind it in the transaction of some part of its business.—Atlantic Ins. Co. v. Carlin, 58 Md. 336. When it is found there was an agency, as to third persons dealing with the agent in good faith, as to all matters within the scope of his apparent or real authority, the company is bound. — 2 Wood on Pire Insurance, § 408 ; May on Insurance, (2d Ed.), § 126. Agency springs from contract, and the consent of the principal, express or implied, is as essential to its creation, as it is to the constitution of any other contract. — Wharton’s Law of Agency, § 1. If the consent of the principal has not been yielded ; if he has not clothed the supposed agent with any authority, real or apparent, the acts or declarations of such person as to the principal, are res inter alios acta; and for them, whether the principal be a natural person, or a corporation, whatever may be the business transacted, the principal can not without manifest injustice be affected.

The undisputed facts are, that the plaintiffs applied to Trimble & Co. for insurance of the storehouse and stock of merchandise. From whom, or from what company, the insurance was to be obtained, or the rate of premium to be paid, was not the subject of negotiation. There was no representation bv Trimble & Co. that they were agents, or that procuring insurance from the defendant was contemplated. So far as appears from the evidence the defendant had not invested them with any real or apparent authority. The application was prepared on a form bearing the imprint of another company, indicating that they had not the forms of the defendant, or that to what' particular company the form pertained was immaterial in the view of the parties. They were not and had never been agents of the defendant, and had never assumed to act in that capacity. These were the facts attending the application, and the mere statement of them negative an agency for the defendant, and shows affirmatively that Trimble & Oo. were the agents of the plaintiffs, empowered to negotiate the insurance for them, with any insurer willing to take the risk. The very nature of the transaction involved in the agency; and the possession of the application was an indicium of the agency, inviting insurers to deal with them as the agents of the plaintiffs. The denial by one of the plaintiffs, who was examined as a witness on the trial, that Trimble & Co. were the agents of the plaintiffs, was the mere expression of opinion, not supported by the undisputed facts, and to it no importance can be attached. When the facts are ascertained, agency, vel non, is matter of law.

There is no difficulty in ascertaining the real relation of Trimble & Co. As to each of the parties they were essentially, and acted as insurance brokers. In Arff v. S. F. Ins. Co., 125 N. Y. 63, it is said: “What is understood under the designation of an insurance broker is one who acts as a middleman between the insured and the company, and who solicits insurance from the public, under no employment from any special company, but having secured an order he either places the insurance with the company selected by the insured, or in the absence of any selection by him, then with the company selected by such broker. Ordinarily, the relation between the insured and the broker, is that between the principal and his agent. ”

It does not appear that Trimble & Co. were the agents, or in the employment of any company. The only connection they had was with the agents of the defendant by whom the application was received, and who issued the policy, and they had the same connection with all other insurance agents in the city of Montgomery. This connection was an arrangement they had with these agents, that if they presented an application for insurance, and the agent accepted the risk, and issued the policy, there was division of the commissions the agent was entitled to receive from the company he represented. Ordinarily, a broker receives his compensation from his principal; but that by an arrangement or agreement with the insurer, or with an agent of the insurer, he obtains from either his compensation, does not change his relation to his principal. The authority confided to him is not diminished, and he is bound to the same duties, and subject to the same responsibilities, as if the compensation was derived immediately from the principal. In the cases of Mellen v. Hamilton F. Ins. Co., 17 N. Y. 609, and Devens v. Mechanics & T. Ins. Co., 83 N. Y. 168, it appeared that there was an arrangement between the insurer and the broker, similar to that which existed between Trimble & Co. and the insurance agents in the city of Montgomery. If the broker presented an application for insurance the insurer was willing to receive and issue a policy, he paid the broker a commission thereon. It was held, the broker was not to be deemed an agent of the insurer; that he was not in his employment; and that upon the i’eceipt of the premium and the delivery of the policy, his connection with the insurer ceased. The policy which was issued and delivered to the plaintiff was countersigned by the agents of the defendant, and bore no evidence of any agency or authority resting in Trimble & Co. It is difficult to conceive that the plaintiffs could have accepted it relying upon any agency or authority ; or, that they did not rely wholly upon Trimble & Co. as their agents. And if they were negligent, or unfaithful in the performance of duty, it is to them the plaintiffs must look for redress of whatever loss or injury they may have sustained. The misdescription of the location of the storehouse, was either the act or fault of the plaintiffs, or of their agents; whether the one or the other, it can not avoid the warranty in the application.

The delivery of the policy to Trimble & Co. for delivery to the plaintiffs, on the payment of the premium, did not change their character and relation as agents of the plaintiffs. Thereby they were merely enabled to consummate their agency, and until its consummation the agency continued. Necessarily, thereby they became the agents of the defendant, limited in authority to the delivery of the policy and receiving payment of the premium. The payment to them of the premium, was the equivalent of a payment to the defendant, rendering the policy a binding contract, even though they had not paid the premium to the defendant.—Arthurhold v. Susquehanna M. F. Ins. Co., 159 Penn. St. 1;S. C. 39 Am. St. 659. This subsequent and limited agency, incidental to and springing from the relation Trimble & Co. bore to the plaintiffs, there is no reason for regarding as changing the character of that relation, in which they were dealt with by the defendant.

There was not only an absence of evidence of an agency for the defendant, of any kind or character, by Trimble & Co., when the application for insurance was prepared; but, as we have said, such agency was negatived, and affirmatively it appears that they were the agents of the plaintiffs. There was of consequence no error in the exclusion of the evidence, which could only be admissible when connected with legal evidence having a tendency to show the existence of the agency. . “ Whether there is any evidence or not is a question for the judge ; whether it is sufficient evidence is a question for the jury. — 1 Greenl. Ev., § 49. While it is the duty of the court to submit all competent evidence to the consideration and determination of the jury ; it is equally a duty, when assuming the truth of all legal evidence adduced by the one party or the other, if it does not tend to support the issue he is bound to maintain, not to burden the jury with its consideration, protracting trials and needlessly consuming public time.

Let the judgment be affirmed.