Lavoie v. North British & Mercantile Insurance ( 1932 )

The motion argues a number of grounds for its support. In some measure indicating a misconception of the scope and effect of the opinion, the argument contains no points making doubtful the conclusions heretofore reached.

Claim is made that the authority of the sub-agent to waive the insured's right to the ten day notice of the insurer's cancellation, provided the policy remains undelivered by the sub-agent and other insurance replaces it, is not a necessary incident of the general authority the insured has given to obtain insurance for him. The business might be done without that incident, it is true. It is not a necessary incident and for the sake of argument may even be assumed an undesirable one. The inquiry remains, what authority was in fact given. Since, in summary, the plaintiff made Kimball his alter ego in obtaining the insurance and the sub-agent might do anything fairly serving his assignment to obtain part of it, the only reasonable conclusion is that the right to waive was given as an incident within the scope of authority. Not a necessary incident, it was yet one the evidence made it necessary to find. How much authority was given, and not how much had to be, is the issue.

The relations between the insured and the agent or sub-agent are such as the evidence discloses. The law does not undertake to prescribe or regulate them. It only applies the general and simple rule of the principal's responsibility for his agent's authorized acts. The insured either gives or withholds authority. If he gives it, he is bound by conduct pursuant to it. The extent of authority is to be ascertained as matter of fact. As matter of law the agent's conduct is chargeable to the principal if it comes within the extent. The facts, whether undisputed or contested, being ascertained and known, the principal's responsibility follows as a legal result if the facts disclose authority. Federal Insurance Co. v. Sydeman,82 N.H. 482, 485, 486. The opinion states and employs no other rule. It declares no doctrine of policy and gives no special legal consequences to the agent's engagement. No unusual or particular legal incidents or features are held to control the arrangements entered into between an insured and an insurance agent, and no rules are adopted with reference thereto subordinate or auxiliary to the general rule of responsibility for authorized conduct. In each case the terms of the engagement are to be considered, to show if the conduct in question is within them. In ascertaining the terms the established principle that they include not only those expressed but as well those necessarily or reasonably to be implied, is employed.

It is said that the opinion is inconsistent with the cases of Stebbins v. Insurance Co., 60 N.H. 65, and the Sydeman case above cited.

In the Stebbins case, cancellation by the insurer was not effective until the insured had notice of it. It was held that a sub-agent might not cancel without the notice after he had delivered the policy to the insured's agent. The situation was unlike that here, where the sub-agent cancelled a policy retained in his possession. Upon delivery the sub-agent's mission is completed, and his authority to act further is therefore at an end.

It is also to be noted that in the Stebbins case two policies were successively issued and cancelled by the sub-agent before their delivery and without notice to the insured. This was prior to the issue of the one undertaken to be cancelled after delivery. These prior policies were regarded as discharged from liability, since the court expressed the view that the one cancelled after delivery was validly in force. In this aspect not only is there here no conflict with the case but it is followed. Authority to receive notice and authority to waive, the former as treated in the Stebbins case and the latter as here dealt with, both rest upon the same considerations of what the insured authorized others to do for him.

In the Sydeman case the agent was to keep the property insured. Hence his authority was a continuing affair, whoever had the possession of the policies, and it was for him to maintain in force a certain amount of insurance with no time limit set on the duration of the engagement. Being in the insured's place, he necessarily had authority after delivery of a policy to waive the time limit required to make the insurer's cancellation effective. Here the engagement was only to obtain insurance. When it was obtained, there was nothing more for the agent to do under his employment. The work for which he was hired was in fact completed when he had on hand policies acceptable to the insurers.

If a policy at first acceptable to the insurer is later and before delivery cancelled by it, the agent's authority to represent the insured both as to notice of the cancellation and as to waiver of the time limit, would depend upon the terms of the arrangement, express and implied, between him and the insured. The issue would be one of fact. to show if such representation was an incident of his authority. The opinion expresses no views upon such a situation. Under the facts here, when the policies were ready for delivery, the insurance was obtained, and the objective of Kimball's service for the plaintiff was accomplished. The statement of the opinion that the engagement continued until policies were ready to be delivered is not to be construed as holding that all incidental authority was thereupon terminated regardless of what might later happen. Nothing did happen to extend the authority beyond the placing of satisfactory insurance. There is no occasion to consider the evidence of authority in respect to possibilities that did not become material events.

Repeating what is said in the opinion, the Stebbins and Sydeman cases turn on their respective facts to show whether the agent's conduct was authorized or not, and no other or different test is here adopted. Neither of those cases nor this one states any principle of responsibility for an agent's acts beyond that by which authority given imposes responsibility for them. In the Stebbins case delivery of the policy brought the agency to an end, in the Sydeman case the facts showed the agency to continue after delivery, and here the issue of policies ready for delivery achieved the purpose of the agency. All the cases are governed by the same rule.

Former result affirmed.

BRANCH, J. did not sit: the others concurred.