Mutual Life Insurance Co. of New York v. Herron ( 1901 )

Terral, J.,

delivered the opinion of the court.

This is a suit by attachment in chancery; under § 486, code 1892, to recover of the appellant the sum of $322, with interest. Matthew Clay, Jr., applied to a soliciting agent of the insurance company for a policy upon his life in the sum of $10,000 — payable, $7,000 to appellee and $3,000 to Matthew Clay and Hattie K. Clay — upon which application appellee, Herron, paid to said soliciting agent of the company $322, being the sum of the first annual premium if insurance should be effected, and took a receipt therefor, signed by the secretary of the company, and stipulating that said company should repay said sum of money to appellee if said insurance should not be effected. This receipt was signed by the secretary of the company and countersigned by L. T. Bradfield, as collecting agent, and delivered to Herron. The company having declined to take the risk offered it, this suit is brought to recover the money agreed to be returned in such event. The insurance company resists the recovery of the money specified in the receipt on several grounds.

1. It is said that L. T. Bradfield, who, as collecting agent, countersigned the receipt for the $322 issued by the company, was not in fact the agent of said company, but was merely the agent of J. S. Willcox, the general agent of the company at Montgomery, Alabama. It is a general rule that an agent clothed with a personal trust cannot delegate his authority to another without some express provision for that purpose, yet this rule is subject to exceptions, and, among them, to cases where it is understood by the parties that the appointment of subagents is to be the mode in which the particular business would or might be done, or where, from the nature of the agency, a subagent is necessary; and it abundantly appears from the record that the appellant company expected that Willcox, its agent for the State of Alabama, would employ subagents, like Bradfield, for the conduct of the business committed to him. It would seem improbable that Willcox, as sole agent of the company for the State of Alabama, could conduct a business of insurance of any magnitude without the help of subagents. May on Insurance, sec. 154, says: “General agents of insurance companies, authorized to contract for risks, receive and collect premiums and deliver policies, may confer upon a clerk or subordinate authority to exercise the same powers. The service is not of such a personal character as to come under the maxim, ‘■Delegatus non potest delegare.’’ ” An admirable statement of the principles of law governing the subject may be found in Story on Agency, sec. 14. But here the application of Clay was vouched for by Bradfield as soliciting agent, and so the company had distinct knowledge that Bradfield was assuming to act as its agent; and his authority to so act was clearly recognized by it in the consideration given to the application, which was declined on other grounds than a want of authority in Bradfield.

2. Secondly, it is said that, if Bradfield be taken to be the agent of the company, and if the receipt countersigned by him be binding upon the company, still said company has been discharged from said duty by the act of appellee, Herron, in taking the note of Bradfield and Leach in discharge of its payment. Bradfield, and Leach, who was assisting Bradfield in soliciting business of insurance, testified that they gave their note to Herron in discharge of the obligation of the company, and that it was accepted as such by appellee, while appellee distinctly insists that he did not agree to take the note of Brad-field and Leach in discharge of the obligation of the company; and the finding of the chancellor solved that contention in favor of appellee, and we see no ground for disturbing his conclusion on that point.

3. But it is also contended that the insurance company is discharged from the repayment of the $322, because it is said that Herron, by awaiting the effort of Bradfield and Leach to pay him the money due him from the company, misled the company, to its detriment. The insistence is that Bradfield and Leach committed a fraud upon appellant, and that Herron, by bis conduct, involved himself in such fraud. In our view of the matter, however, the record discloses no such culpability on the part of Herron. The insurance company, or Will-cox, its general agent, knew that Bradfield, as soliciting agent, had all the authority belonging to such agent, was authorized to receive applications for insurance, collect in advance an amount equal to what would be the first annual premium, issue a binding receipt, signed by the secretary of the company, stipulating for a return by the company of said amount if the risk was declined. In truth, the company was bound by all the acts of its agents done within the scope of their authority, and there was no duty imposed upon Herron to inform it of such acts. That Willcox, the general agent of the company, may have been deceived by Bradfield and Leach may be true, but wherein Herron is responsible to the insurance company for such deception cannot, in our opinion, be deduced from this record.

Affirmed.