Gambino v. Northern Insurance Co.

There are numerous assignments of error but we think but one phase of the case need be considered. That the provisions of the Michigan standard form of policy which we have quoted are valid and enforceable is not questioned. Plaintiff, however, claims that the statement to his agent by Garessi and the statement of Fischer to his attorney amounted to a denial of liability by the company, hence a waiver of proof of loss, and the trial judge so held. But waiver, in order to bind the company, must be by the company through its officers or agents acting within the sphere of their authority. If the agents who attempt to speak for the company bear no authority from the company, either express or implied or by holding out, their acts beyond their authority do not bind the company. That the general rules of agency apply to insurance cases has been pointed out by this court on numerous occasions. We pass without comment the fact that the talk with Fischer did not occur until several months after the date fixed in the policy for filing proofs of loss. Fischer was the local agent and Garessi was one of his employees. Neither of them so far as this record discloses had authority either general or special to adjust losses.

The holding of the learned trial judge that the local agent of an insurance company who has authority to solicit business, write and issue policies and collect premiums, may for his company waive the clauses of the policy above quoted, is in conflict with at least two cases in this court. The equities of the plaintiff in the case of Barry Finan Lumber Co. v.Insurance Co., 136 Mich. 42, were there noted; they were much stronger than in the instant case. In that case the local agents had stated that they were authorized to adjust the loss, but this court recognizing the well settled rule that an agent's authority may not be proven by his statements held that authority to adjust the loss had not been established, and held (we quote from the syllabus):

"The statements and acts of a local agent of a fire insurance company, authorized to receive proposals for insurance and countersign and deliver policies, cannot be received to show that he was authorized to adjust losses for the company, or had power to waive a provision of the policy requiring action to be commenced within 12 months from the time of the loss."

Mr. Justice HOOKER, who wrote for the court, reviewed the authorities at length. This case was followed in Fisk v.Insurance Co., 198 Mich. 270. These two cases must be taken as settling that authority of a local agent to solicit business, write and issue policies of insurance and collect premiums, does not carry with it authority to adjust the loss. The authorities relied upon by plaintiff are not to the contrary. Plaintiff's counsel cited upon this branch of the case the following:Improved Match Co. v. Insurance Co., 122 Mich. 256; O'Brien v.Insurance Co., 52 Mich. 131; Young v. Insurance Co., 92 Mich. 68; Morgan v. Insurance Co., 130 Mich. 427;Bird v. Insurance Co., 218 Mich. 266; Fisk v. Insurance Co.,192 Mich. 243; Popa v. Insurance Co., 192 Mich. 237;Johnson v. Insurance Co., 224 Mich. 493. An examination of these cases discloses that they do not present the question now before us. In the Match Company and Johnson Cases, the denial of liability was by the company itself. In all the other cases, six in number, the waiver was by the adjuster of the company. Manifestly an agent authorized to adjust the loss carries not only the authority to adjust the amount to be paid but also carries as a part of and incidental to such power the authority to refuse any payment at all, to deny liability. His denial of liability is the denial of liability for his principal and waives proof of loss. But a local agent, authorized only to write insurance, having no authority to adjust the loss, does not carry with him the power incidental to and a part of the authority to adjust. Having this in mind, it will be seen that our holdings are in no way inconsistent.

As the material facts are not in dispute and a new trial would be of no avail to plaintiff, one will not be granted.

Judgment reversed.

CLARK, SHARPE, STEERE, and WIEST, JJ., concurred with FELLOWS, J.