148 F. 358 | 5th Cir. | 1906
This is an action at law brought by Roby Robinson, a citizen of Georgia, against the Union Central Life Insurance Company, an Ohio corporation, upon an alleged contract insuring the life of William F. Robinson. On January 1, 1898, an application was made by William F. Robinson to the insurance company for insurance upon his life for $5,000 in favor of his son, Roby Robinson.
"Win. If. Robinson is to be insured from date of this receipt, in accordance with all the provisions, conditions, and stipulations of the policies of the said company, provided said application shall be approved, and accepted by said ‘■oinpany. If, however, the application shall be declined by the company, this agreement is to be null and void, and the amount, receipt whereof is herein .¡(•■■niowiedged, is to be returned to- said Roby Robinson by me on surrender of this receipt.”
No money was in fact paid by Roby Robinson when this receipt was given. He gave Leary a note, payable to him individually, for half the premium, due at 90 days, and he accepted from Leary a gift of the other half of the premium, which Leary claimed was due to him by the company as a commission for procuring the insurance. The note was discounted at a bank, where Roby Robinson paid it before its maturity, and on the day his father died, January 22, 1898.
It was alleged in his petition and contended by the plaintiff that the contract shown by the binding receipt was approved and accepted by the company before the death of William F. Robinson, and was in force when he died. The company contended that the application for insurance was never approved and accepted; that, on the contrary, it was held under consideration at the time of the death of William F. Robinson; and that, after the death of William F. Robinson, it tendered to Roby Robinson the amount of the premium named in the receipt. As another defense, the company contended that the powers of Leary as agent did not authorize him to bind the company by taking a note for half the premium, and giving Roby Robinson his (Leary’s) commission for the other half, and that the company did not-consent to or ratify such transaction. A more detailed statement of the facts that relate to these several contentions will be given as they are considered. There was a verdict in favor of the plaintiff below for $5,000, and the comapny sued out this writ, and has made many assignments of error, only one of which it will be necessary to consider.
In the course of his charge to the jury, the learned trial judge said: “I state to you, gentlemen, that notice to an agent of any matter connected with the agency is notice to the principal.” There is no doubt but that this is a correct statement of the general rule. It is sometimes more elaborately stated that when, in the course of his employment, the agent acquires knowledge or receives notice of any fact material to the business in which he is employed, the principal is deemed to have notice of such fact. Tiffany on Agency, § 59, p. 257. The insurance company reserved an exception to this charge. The charge was only pertinent as applying to the transactions between Roby Robinson and Leary, as the agent of the insurance company. It was equivalent to instructing the jury that any knowledge that Leary obtained or had in reference to his transactions with Roby Robinson
“TJhere Is an exception to this rule [referring to the general rule above quoted] when the agent is engaged in committing an independent fraudulent act on his own account, and the facta to be imputed relate to this fraudulent act. It is sometimes said that it cannot be presumed that an agent will communicate to his principal acts of fraud which he has committed on his own account in transacting the business of his principal, and that the doctrine of imputed' knowledge rests upon a presumption that an agent will communicate to his principal whatever he knows concerning the business he is engaged in transacting as agent.”
There have been conflicting suggestions as to the true reason for the rule in question and the exception to it (Irvine v. Grady, 85 Tex. 130, 135, 19 S. W. 1088; Allen v. South Boston R. R. Co., supra); but it would not be useful to enter on that inquiry, for, whatever may be the true reason for the rule and the exception to it, both are unquestionably too well established now to be controverted. Both have-been uniformly held applicable to officers and other agents of corporations. Tiffany on Agency, § 61, p. 366; Barnes v. Trenton Gaslight Co., 37 N. J. Eq. 33-37; Whelan v. McCreary, 64 Ala. 319, 329.
The record shows that Reary was a general agent of the insurance company. Under the contract of agency, all moneys and. securities received by him for the company were to be held by him as a fiduciary trust, and not to be used by him for any purpose whatever. If money and securities when collected were not immediately sent to the insurance company, they were to be at once deposited by him in such bank or banks as the company might approve, to the credit of the company. In reference to Reary’s compensation, it was agreed that he was to receive a commission upon premiums which were paid in cash to, and received by, the company on all policies of insurance effected through his procurement at the rate of 50 per cent, on the first premiums paid on such policies as the one in question. Such commissions were to accrue only as the premiums were paid in cash to the company. Through
“I agree tliat any policy which, may be issued under this application shall not be valid until the first premium is paid to the company, or its authorized agent, and the receipt therefor countersigned by the agent, and delivered during my lifetime.”
It seems to have been understood between Roby Robinson and Leary that the former was to pay the premiums upon the policy applied for by W. F. Robinson. The following is the account given by Roby Robinson himself as to what occurred between him and Leary at the time of the issuance of the binding receipt:
"On January 5th Leary came into my office in the Equitable Building, and wanted to know if I was going to pay for the insurance, or wbo was going to pay for it. I told him I was going to pay for it, as previously told him, and he wanted to know when. I told him I was ready to pay for it whenever he delivered the policy. He said he wanted to close the matter up that day, as he wanted to get it in some report for the previous year, which was close about that time, or a little later on. I told him I did not want to pay for the policy until I got it. He says, ‘If you will pay for it now I will give yon a binding receipt.’ * * * With regard to the payment receipted for in this binding receipt, I gave him my note at the same time he gave me that receipt. The note was written out then and there, and delivered to him when he delivered me the receipt. The paper, dated Atlanta, Ga., January 5th. 1808, signed ‘Roby Robinson,’ being a note due in ninety days, payable to W. HI. Leary, or order, for $123.93, is the note. I explained to Mr. 'Leary that 1 could not pay for the binding receipt at that time, but if he wanted to close it •up I would give him my note, and he could get the note discounted at the Atlanta National Bank. I suppose it was discounted that day, because I never heard anything from it, and subsequently be told me it was all right. The writing in the body of the note is in Leary’s handwriting. With reference to the face of the note being $123.93, while the binding receipt calls for $247.85, I will say Mr. Leary told me he had a commission due him in writing insurance. That, of course, I knew, and he stated furthermore that if he could write a certain amount of insurance he would get a bonus on his business, and that he would give me a discount on the premium. I therefore only gave him my note for half the amount: the other part was Mr. Leary’s commission that he gave to me, and this is all I gave him. I don’t remember that he told me what his commission was in the matter, but he told me he would give me a discount of fifty per cent. He led me to believe that was his commission on the transaction. * * * Will Leary said he had commissions coming to him out of his business, and that he would give me his commission off, whatever you may call it, of 50 per cent., and that’s the reason * * * why the note was made for half the amount.”
Roby Robinson thereupon gave his note to Leary for $123.93, and received from him the binding receipt, which recites that $247.85 had been paid to him,, being the first annual premium on an application for a policy on the life of W. F. Robinson. No mone)' was in fact paid. It appears, however, from the record that Roby Robinson’s note for $123.93 was discounted in bank by Leary. The other half of the premium was considered as between the two paid by Leary’s giving Robinson the benefit of the commission upon the premium to which he claimed to be entitled. Leary had told Robinson that he wanted to close the matter up that day, as he wanted to get it in a report of his work for the previous year. He told him, also, that if he could write
Conceding, but not deciding, that the facts would sustain the jury’s finding, shown by the general verdict for the plaintiff, that the contract embraced in the receipt was “approved and accepted” by the insurance company, we are of opinion that the transaction between Roby Robinson and Leary was such that the approval and acceptance, if made without knowledge of what occurred between them, would not be binding on the company. We find in the record no evidence of direct notice to the company. We are of opinion that the circumstances proved are such that Leary’s (the agent’s) knowledge of the facts was not constructive notice to the company (the principal), and that-the charge of the court, in effect, that it was notice, was erroneous.
There are other questions in the case, but, as the evidence on the next trial may not be the same, we think it unnecessary, and, perhaps, not advisable, to decide them or comment on them.
The judgment of the Circuit Court is reversed, with instructions to grant a new trial.