Mound City Mutual Life Insurance v. Huth , 49 Ala. 529 ( 1873 )

B. E. SAFEOLD, J.

— The appellee claimed of the appellant the full amount of a policy of insurance, issued by the latter in her favor, on the life of her husband, .Francis A. Huth. The questions at issue between the parties are embraced in the following statement. The policy contained this stipulation : “If the first annual premium shall have been fully paid to this company, and default shall be made in the payment of any premiums thereafter to become due and payable, then such default shall not work a forfeiture of this policy; but if it be surrendered within thirty days after the date of such default, this company will, in consideration thereof, issue a paid-up policy, payable as hereinbefore provided, for the amount which could be bought by the net value of this policy (the value to be determined on the basis and assumptions contained in section 29 of an act of the State of Missouri, entitled ‘ An act for the regulation of Life Assurance,’ approved March 10th, 1869), considered as a gross single premium, according to the single-premium rates of this company. And it is expressly understood, that the sum of all loans, or other indebtedness, due to this company, shall be first deducted from the amount of such net value.” The premiums in this case were payable semi-annually, on the 1st of June and December, or within thirty days thereafter. On the back of the policy were instructions, by way of “ Notice to policy holders,” one of which was to this effect: “Powers of agents. — Agents are not authorized to make, alter, or discharge contracts, waive forfeitures, or bind the company in any way; their duties being simply the reception and transmission of applications for policies and premiums, under the rules and instructions laid down in their letters of appointment.”

The premiums of the first year having been paid and accepted by the company, the one due June 1st, 1871, or thirty days thereafter, was not paid until October 9th, 1871. It was not then paid to the company’s agent, Poindexter, nor to Jones, whom Poindexter left in charge of his business during a temporary absence; but to Kennerly, who seems to have been acting for Jones. The money was handed over to Poindexter on the 10th of October, 1871. Francis Huth died on the 14th. Poindexter notified the company of his death on the 17th, but said nothing about the premiums. On the 19th, the secretary of the company suggested irregularity in its payment; and on the 27th .of November, 1871, directed Poindexter to return the money received by Kennerly, who, he said, had no authority to receive premiums, or waive forfeitures, and to correct his report of the payment which he had made on the 21st of October.

1. The court charged the jury, in substance, as we construe the charge, that the first annual premium having been paid, as required by the terms of the policy, default made in the payment of subsequent premiums would not forfeit it; and if no other obstacle was shown than such default, the plaintiff was entitled to recover. There was error in this charge. The policy, on its face, while declaring that such default should not work an absolute forfeiture, most pointedly expresses what should be the right of the holder in such a case, to wit: a paid-up policy for the amount which the value of this policy, ascertained in a specified way, and considered as a gross single premium, would buy, according to the single premium rates of this company. The premiums were to be paid semi-annually, as long as the insured lived, and it is impossible to construe the provision that default in their payment after the first year should not work a forfeiture of the policy, to mean that no payments need be made after the first year.

2. The charges asked by the defendant, and refused, may be best considered in a general manner. Corporations, of a character which brings them into extensive and promiscuous intercourse with the public, are prone to endeavors to limit their liability in a way not sanctioned by the general law, and inconsistent with their duties to the public. The courts have not hesitated to disregard such attempted limitations, and to hold them to the legitimate responsibilities of their business. In this case, the agent was not even at liberty to write and sign a receipt for the premium, when paid to him ; but he had to deliver receipts furnished him, signed by the president or secretary, and countersigned by him, to show that he had received the money. Yet we find the company putting into his hands, in advance, its signed receipts, subject only to his good faith in disposing of them. It would be a fraud on the policy holders, after allowing such license as this, to suffer the company to plead its instructions, or its contract with the agent, in absolute repudiation of its receipt. The possession of it by the agent is calculated to deceive the policy holder in respect to his authority. A payment of the premium, or a tender of it within the time, would be sufficient without a receipt. If the same, after the time, is to be ineffectual with the receipt, the agent, by his possession of it, is enabled to impose on the policy holder the belief that he is authorized to deliver it. The natural construction of the instructions is, that the agent obtains the receipt from the company after he has received the premium.

The second semi-annual premium of the first year was not paid until after thirty days from the time it became due. But the agent received it, and transmitted it to the defendant, who retained it without objection. This was clearly a waiver of the default in that instance. An extension of time was given by the agent to Huth on the premium due June 1, 1871, and it was proved that he frequently gave time to other insured persons. These facts must modify the instructions as to the powers of the agent. If the principal does not adhere to his own contract with his agent, he is bound by any departure from it which third persons may from his own conduct reasonably attribute to his authority. Golding v. Merchant & Co. 43 Ala. 705. The deduction is, that if Poindexter accepted the payment made of the premium due June 1, 1871, and sanctioned the giving of the receipt, when informed of the facts ; and if the conduct of the defendants had been such as authorized Huth, when he made the jiayment, to believe that the agent had authority to waive his default, then the default was waived. The health of Huth at the time can have no other effect than as evidence tending to show whether there was a waiver or not. He had not died, and he had not misrepresented his health. He was in good health when his default first occurred. Perhaps the neglect to pay was due entirely to the promise of the agent to give him time, and would have continued longer if he had not fallen sick. Miller v. Brooklyn Life Ins. Co. 12 Wall. 285.

3. The defendant is not bound by any of the acts of Kennedy, unless in the way of subsequent ratification or confirmation, by itself or its authorized agent. The authority of an agent is exclusively personal, unless from the express language used, or from the fair presumptions growing out of the particular transaction, or of the usage of trade, a broader power was intended to be conferred on the agent. Story on Agency, § 14. Both the principal and his agent may ratify the acts in their behalf of an unauthorized person; and the principal .is bound by the ratification or adoption of his agent, if the agent had authority to do the thing which he ratified or adopted. Story on Agency, §§ 239, 244, 249.

As the exceptions to testimony are not argued by the appellant, and do not seem to be difficult of solution, we omit the consideration of them.

The judgment is reversed, and the cause remanded.