DocketNumber: No. 30862.
Citation Numbers: 152 So. 889, 169 Miss. 531
Judges: <bold>Anderson, J.,</bold> delivered the opinion of the court.
Filed Date: 2/26/1934
Status: Precedential
Modified Date: 1/12/2023
I am unable to agree with the construction placed upon section 5196, Code of 1930, and think the majority decision is contrary both to the logical interpretation of the statute, and to the decisions of this court dealing with this section. There are, of course, conflicts in the decisions upon the questions involved, but they grow out of cases in which the statute was not considered, being referred to neither in briefs of counsel nor in the *Page 542 court's opinions. Consequently, these cases should not be considered authority for the construction thereof.
Before going into a discussion of the statute and the decisions, I desire to call attention to the terms of the policy in the present case which, in my opinion, have the effect of recognizing section 5196, Code of 1930, and consenting to the substitution of its provisions for the policy provisions, where they are in conflict. The policy provides as follows: "Any and all provisions of this policy which are in conflict with the statutes of the state wherein this policy is issued are understood, declared and acknowledged by this company to be amended to conform to such statutes. This policy is made and accepted subject to the provisions, exclusions, conditions and declarations set forth herein or endorsed hereon, and upon acceptance of this policy the assured agrees that its terms embody all agreements then existing between himself and this company or any of its agents relating to the insurance described herein, and no officer, agent or other representative of this company shall have power to waive any of the terms of this policy unless such waiver be written upon or attached hereto; nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the assured unless so written or attached. The policy shall be void in event of violation by the assured of any agreement, condition or declaration contained herein or in any rider now or hereafter attached hereto."
The latter part of this quoted provision is written out of the policy by the first part thereof, taken in connection with section 5196, Code 1930, which provides in express terms that: "Every person who solicits insurance on behalf of any insurance company, or who takes or transmits, other than for himself, an application for insurance, or a policy of insurance, or who advertises or otherwise gives notice that he will receive or transmit the same, or who shall receive or deliver a policy of insurance of any such company, or who shall *Page 543 examine or inspect any risk, or receive, collect or transmit anypremium of insurance," etc.
The doing of the thing named in the statute makes the person doing it the agent of the company if the company has authorized him to do the act; or if, not having authorized him to do so, it accepts the benefits of his act. The words of the statute, "or do or perform any other act or thing in the making or consummation of any contract of insurance, for or with any such insurance company, other than for himself," are not intended to modify and limit the first part of the statute. The doing of the particular things enumerated, by the agent, makes him a general agent of the company for the purpose of his agency, and everything that comes to him in the course of the doing of that act, or rendering of that service is notice to the company. But the statute was broader than the named things, and is intended to embrace any other act on the part of such person in the making or consummation of a contract of insurance. Not only did the lawmakers intend to make the agent who did the enumerated things the alter ego of the company, within the purview of the act done, but also to embrace every other thing that might be done in consummation of contracts of insurance. The phrase was to follow any other act, and, of course, was not to make any act whatever that an agent might do an act of the company, but all acts not named which were done in the consummation or making of a contract. The construction now placed on the statute emasculates it of a good portion of its intended purpose. Under the construction of the majority opinion, if the contract of insurance is delivered, then, although the premium is collected by an agent of the company, the latter is not bound by notice that comes to the agent, and may limit his authority to mere receipt of premiums, and thus avoid all waiver or estoppel by reason of facts learned by the agent, and which, in this case, he represented would not affect the validity of the insurance. In other words, it *Page 544 enables the insurance company to reach out and take the premium through the agent representing it in performing the functions of his business, while escaping all responsibility that would accrue to it because of facts known to the agent, which would, on the proper construction of the statute, make a waiver or estoppel against the company.
If the policy is executed, say, for a term of five years, and delivered, and the payments are to be made annually, the agent who collects the premiums can misrepresent its terms and deceive the assured without limit, collecting premiums which would otherwise not be collected, and the company would not be bound. This would certainly be hurtful to the property owner, and is clearly contrary to the express provisions of the statute.
The purpose of the enactment of section 5196 of the Code, and of other sections pari materia, was to prevent insurance companies from doing business in the state in such manner as to deceive or injure the public, and to reap the profits, while escaping liability through the expedient of limiting the authority of the agent. Wherever a company appoints an agent for a particular purpose, that agent, acting for the company, is to be treated as though the company itself were acting, as this court has often decided.
In Cain v. State,
This case deals in part with the purposes of the statute, which intends to place on the company responsibility and liability for acts of the agent in performing functions authorized by the company, and to subject the insurance company in such case to all the burdens and obligations that would be imposed upon it were the general officers of the company, or the company itself, doing the act. It does not permit limiting the power of an agent within the scope of his appointment, so as to avoid consequences, amounting to waiver or estoppel. It was manifestly intended to make the company bear burdens, as well as take benefits. The old expedient of appointing an agent, and forbidding him to bind the company, was done away with by this statute. The latter part of the provision quoted in the first part of this opinion is in practical effect the same as that dealt with in Fraternal Aid Union v. Whitehead,
In the same case, at page 176 of 125 Miss., 87 So. 453, 458, we said: "This case must be treated in our opinion just as though the applicant for the certificate was dealing personally with the president and the president had performed the acts that the state manager performed. Certainly an insurance company could not be deemed to desire information as to insignificant and slight ailments which had existed a long time prior to the application."
In St. Paul Fire Marine Ins. Co. v. Loving,
In Interstate Life Accident Insurance Co. v. Ruble, supra, it was held that: "Under section 5196, Code of 1930, a general agent of an insurance company authorized to accept premiums and deliver policies on behalf of the company may make an agreement binding upon the company in consideration of writing of insurance to pay a debt owed by an agent of the company for board during the existence of the agency."
It was also held that "section 5196, Code of 1930, is broader in its scope than the general law of principal and agent and makes the act of the agent within the line of his powers the act of the company."
In Hartford Fire Ins. Co. v. Clark,
It is difficult to see how the holding of this case can be followed, and how the majority opinion in the present case has been reached. It is true that another judge and I dissented in that case, thinking that the provisions of the policy, which limited to the insurance company at its home office the right to pass on risks, could be upheld under the statute, but the court held otherwise; and of course this holding becomes law to all the judges of this court.
In Lamar Life Insurance Co. v. Kemp, supra, it was held that under the above section of the Code the act of an insurance agent in delivering the life insurance policy without collecting the first premium was the act of the insurer, notwithstanding the provisions in the application for insurance and in the policy to the contrary. In the opinion in this case, at page 895 of 154 Miss.,
In Miss. Fire Ass'n v. Stein,
In Franklin Fire Ins. Co. v. Franks,
In Fidelity Casualty Co. v. Cross,
In Fidelity-Phenix Fire Ins. Co. v. Redmond,
It was also held in this case, on a suggestion of error, that where the insurance adjuster, with knowledge of the condition in the face of the policy, and of the use of gasoline on the premises, without suggesting forfeiture of the policy, entered into negotiations with the insured in an effort to adjust the loss, encouraging him to submit estimates, at considerable cost, there was a waiver of the forfeiture.
In Caledonia Fire Ins. Co. v. Shepherd,
In Scottish Union, etc., Co. v. Wylie,
In Agricultural Ins. Co. v. Anderson,
In Sutherland v. Federal Ins. Co.,
See, also, New York Life Ins. Co. v. Smith,
These various cases and the language used in the opinions deciding them show conclusively that it was the purpose of the court to bind the insurance companies by knowledge acquired by their agents while acting for the company, to the same extent, and with the same effect, as if the company or its principal officers were present, dealing in the matter. The recent case of Home Ins. Co. v. Thornhill,
I cannot reconcile these cases with American Bankers' Ins. Co. v. Lee,
In the case before us, Taylor, the agent, authorized to solicit insurance and collect premiums, and with the facts before him, induced the plaintiff in this case to pay for the insurance to keep it in force, by representing that the policy would not be affected by the fact of the transaction between Price and the Central Company. In my opinion his action binds the Insurance company.
Estoppel is recognized in the Bouldin case, supra, where at page 678 of 100 Miss., 56 So. 609, 613, it is invoked, the court saying: "Cases frequently arise where the principal is estopped from denying the authority of his agent, and this is especially true where the agent, with the knowledge and consent of the principal, holds himself out to the world as having certain powers. The essence of estoppel is that the party asserting the agency was deceived by the conduct of the party against whom it is asserted, and, though fraud may be an ingredient of the case, it is not essential. The principal need not authorize the agent to practice a fraud on third parties, yet if he authorize his agent to transact the business with a third party, and in so doing the agent practices the fraud on the party, the principal is liable. The estoppel may be allowed on the score of negligent fault of the principal. Where one or two innocent persons must suffer loss, the loss will be visited on him whose conduct brought about the situation."
In the case before us there is no dispute of the fact that Taylor had authority to act for the company, both in soliciting insurance and in collecting premiums therefor. The policy involved in this case gave to both insured and insurer the right to cancel it. Common sense is a valuable aid in deciding lawsuits; and we know that insurance companies do not maintain in force policies which they have a right to cancel, when the premiums are not paid. It is true that the policy did not provide automatic *Page 554 cancellation for nonpayment of premiums, but it gives the insurance company a right to cancel it; and we know the company would avail itself of this right in event of nonpayment of premiums. Clearly, the premiums were paid, because Price was led to believe that the policy would remain in force if he did so; and he was assured that this would be the case by the agent who collected the premiums. It would be a travesty upon justice, as I view it, to hold that the company could accept the premiums and keep the policy in force, with knowledge of the facts possessed by it, thereby ratifying the act of its agent; and then, when loss by fire occurred, deny liability therefor. There was no offer to repay the premium and cancel the policy. Not only this, but the adjuster of the insurance company, with knowledge of the facts, agreed upon a loss, and agreed, also, to pay it. The company was aware of the facts at the time this agreement was made, and must be held to an election; and is now estopped to deny liability under the policy.
The construction that I have placed upon the statute deals fairly with all parties, and promotes justice. I cannot consent to any construction of the statute giving to the insurance company all the advantages and none of the burdens of the business which it carries on in this state.
American Bankers' Ins. Co. v. Lee , 161 Miss. 85 ( 1931 )
Franklin Fire Ins. Co. v. Franks , 145 Miss. 494 ( 1927 )
Life Acc. Ins. Co. v. Ruble , 160 Miss. 206 ( 1931 )
Home Ins. Co. of N.Y. v. Thornhill , 165 Miss. 787 ( 1932 )
Lamar Life Ins. Co. v. Kemp , 154 Miss. 890 ( 1929 )
Continental L. Ins. Co. v. Clanton , 149 Miss. 289 ( 1928 )
Fire Marine Ins. Co. v. Loving , 163 Miss. 114 ( 1932 )