Williams v. Philadelphia Life Ins. Co. , 105 S.C. 305 ( 1916 )

August 10, 1916. The opinion of the Court was delivered by This is an appeal from an order sustaining a demurrer to the complaint, on the ground that it does not state facts sufficient to constitute a cause of action —

"In that it does not allege any contract, between Philadelphia Life Insurance Company and plaintiff's intestate, and in that it does not allege the breach, by the defendants, of any duty owing by defendants, to plaintiff or plaintiff's intestate, or the neglect of any such duty."

The complaint (which will be reported) contains allegations appropriate to two causes of action, one arisingex contractu, and the other ex delicto. If they are sufficient to constitute either cause of action, the complaint is not demurrable. Cartin v. Railway, 43 S.C. 221,20 S.E. 979, 49 Am. St. Rep. 829.

In the case of Blakeley v. Bradley, 99 S.C. 229,83 S.E. 184, the action was to recover of the defunct State Mutual Fire Insurance Company, against an alleged policyholder, for past due assessments. The defendant denied that he was a policyholder, on the ground that he had never received the policy of insurance. The secretary and treasurer of the company testified that the policy was issued by them, and mailed to the defendant, addressed to his postoffice. This Court said: "If that be true, then the policies were issued, * * * and the defendant is bound."

If, at the time of mailing a policy, properly addressed to the applicant, it is the intention of the insurer that it is to be delivered to the applicant without further action on the part of the insurer, then the law regards the policy as issued and delivered, as soon as it is placed in the postoffice for that purpose. The mailing of the policy, under such circumstances, manifests an intention on the part of the insurer to complete the negotiations for insurance; and such will be its effect unless the applicant gives notice of some good reason, for refusing to accept the policy.

Is there any difference in principle, when the insurer mails the policy to a third party, or even to an agent, with the sole object, in using such a medium of communication, to effect the unconditional delivery of the policy to the applicant? If the insurer in such a case, does not contemplate any further action than the delivery of the policy by the agent, then the delivery becomes effectual as soon as the policy is mailed; and no unauthorized act on the part of the agent in disobeying the instructions of the principal will be allowed to defeat the vested rights of the applicant and the intention of the insurer, when he placed the policy in the postoffice. It is even doubtful, whether the insurer himself could prevent the delivery of the policy to the applicant, after mailing it under such circumstances. The test is whether the policy is mailed to the agent without any other intention than its unconditional delivery to the applicant. It would be inequitable and unjust, and would be prejudicial to the conduct of the business interests of the country, if the doctrine was recognized that an agent, by an unauthorized act, and in disobedience of his instructions, should be allowed to defeat, not only the intention of his principal, but likewise the rights of those dealing with him. A contrary doctrine would, at least, be against the spirit of the maxim that equity considers that as done which should have been done.

It is also a well recognized doctrine that a principal is liable for the wrongful acts of his agent while acting within the apparent scope of his authority, even when committed against the instructions of the principal; and it unquestionably would be in violation of the spirit of this rule if a principal should be allowed to reap a benefit from the wrongful and unauthorized act of an agent, especially when such wrongful act would be prejudicial to the rights of an interested third party, dealing with the principal. We proceed to construe the complaint, in the light of these principles.

The words, "having made arrangements with the defendants for the payment of the premium therefor satisfactory to them," in the fourth paragraph do not, it is true, show the terms of the agreement between the parties in regard to the payment of the premium, but they were evidently intended to convey the idea that the nonpayment of the premium was not to interfere with the delivery of the policy in case the application was approved by the insurer.

The allegations of the fifth paragraph are as follows:

"The plaintiff is informed and believes that some time in January, 1911, the defendant issued a contract of insurance on the life of the said Margaret E. Williams for the sum of $10,000, payable at her death to her estate, and forwarded the same to its said agent, for delivery to the said Margaret E. Williams."

The allegations which we have quoted show that the policy was mailed by the defendant to its agents for delivery; and as there are no allegations that they were authorized to do any other act in regard to the policy it must be presumed that such delivery was intended to be unconditional. It was, therefore, a wrongful and unauthorized act on their part in failing or refusing to deliver the policy. We have already shown that a policy is constructively delivered as soon as it is mailed, under the circumstances alleged in the complaint.

The respondent gave notice that it would ask that the order of the Circuit Court be sustained upon the additional grounds that the plaintiff's right of action, if any, did not survive, and that the damages alleged are uncertain, remote, and speculative. Having reached the conclusion that the complaint states facts, sufficient to constitute a cause of action, based on contract, the questions presented by the additional grounds become merely speculative.

Judgment reversed.