Wachter v. Phœnix Assurance Co.

Opinion,

Mr. Justice Sterrett:

The facts upon which this contention appears to hinge are few, and undisputed.

In December, 1885, the Phoenix Assurance Company, defendant below, issued a policy of insurance to Charles Otto Wade, for $1,000, on his frame cottage at Anglesea, N J. The risk was solicited and policy delivered to the insured, by J. P. Spofford, of Holly Beach, who, in that regard at least, acted for the company. Shortly afterwards, Wade borrowed from Noah Wachter, the plaintiff below, $850, secured by a mortgage of the cottage property, supplemented by the insurance policy. For the purpose of having the latter properly indorsed or transferred, so that, in the event of loss by fire, the insurance money would inure to the benefit of the mortgagee, Wade called on Spofford, informed him of the transaction, and requested that the policy be properly transferred to Wachter, the mortgagee. Spofford took the policy, and promised to have it attended to. Before anything further was done, however, Wade and Wacliter, together, went to see him in regard to the matter. Spofford took the policy out of his desk, and wrote in it the words, “Loss if any, payable to Noah Wacliter, mortgagee,” and then handed it to Wade, saying, “Thatis all right now;” and thereupon Wade delivered it to Wacliter. The action of Spofford in thus changing the policy was recognized and approved by the agent of the company at Vineland, N. J., and also by the New York agent. The latter testified as follows : “ The clause in this policy, ‘ loss, if any, payable to Noah Wacliter, mortgagee,’ was entered on our books in the New York office on report of our Vineland agency. It was reported to us some time in February, 1886.” Frank E. Wanser, an employee in the office of the Vineland agency, was called by the company and testified thus: “ The policy stood mi the register in our office in the name of Charles Otto Wade, — loss, if any, payable to Noah Wachter, mortgagee ; and I so reported the policy to the home office, in New York. This insurance was effected by J. P. Spofford, our solicitor at Holly Beach. Spofford was in our employ.” Washington Irving, the New York agent, called by the company, further testified that the insurance was “effected by Tuller & Wanser, the agents at Yineland, through solicitor at Holly Beach; that a mortgage clause, called ‘ a rider to the policy,’ was in use by the company, containing the provision that no act of the mortgagor violating conditions shall affect the mortgagee,” and that “ there is no extra charge -for attaching such a clause.”

When Wade conveyed the property to Dougherty, he went to Spofford, informed him of the sale, and inquired of him in regard to the transfer of the policy of insurance to Wachter. In the language of the witness: “He (Spofford) said, ‘You don’t need to do that, because it is already transferred to Wachter as mortgagee; ’ and I said, ‘ Then it is all right as it is, is it? ’ and he said, ‘ Yes; you need not do anything more.’ ” Satisfied with that assurance, nothing more was done by either Wade or Wachter. They rested in the belief that the policy was so transferred that, in the event of a loss by fire, Wachter would be entitled to demand the insurance money, and apply it to payment of the mortgage debt.

The cottage was afterwards destroyed, and the insurance company having refused to pay the loss, this suit was brought by Wachter to compel payment. The company then sought to impale him on several sharp points, one of which is that by the sale to Dougherty without a proper transfer of, or indorsement on the policy, the latter became null and void.

In view of the undisputed facts above recited, the defence is a most ungracious one; a defence which, under the circumstances, no reputable underwriter would think of interposing. The insured and the mortgagor both appear to have acted in entire good faith. There is not a particle of evidence to indicate anything to the contrary. When the mortgage was given, and they wished to have it so changed that the mortgagee might hold it as an available security for the loan, they both went together to Spofford, as the agent of the company, and he wrote into the policy the words above quoted, and thereupon it was delivered to the mortgagee. The act of Spofford in writing into the policy the clause referred to, was recognized and approved by the company. Why, then, should it not be estopped from denying his authority to do what was after-wards done in relation to the same policy as a continuing security in the hands of the mortgagee ? If, instead of going to Spofford for the purpose of having the policy properly transferred or indorsed, so that it would inure to the benefit of the mortgagee, notwithstanding the conveyance to Dougherty, the insured and his mortgagee had applied to the general agent of the company in New York, and he had assured them, as Spofford did, that nothing further to that end was necessary; that, for the purpose of indemnifying the mortgagee, the policy was already properly transferred, etc., it cannot be doubted that the company would bo estopped from alleging anything to the contrary: Mentz v. Insurance Co., 79 Pa. 475. In that case, the company’s agent told the assured that the proper indorsement on the policy had been made. It was held that his declaration operated as an estoppel, because it lulled the assured “ to sleep, by tlie assurance that the condition of the policy had been complied with and that the indemnity was secured.”

As was well said by the learned president of the court below, the company confirmed Spofford’s act in altering the policy in question and delivering it in that condition to Wachter. It thereby accredited him as its agent, at least as to that particular risk; and therefore what he said in reference to the policy, etc., was as binding on the company as if he had been its general agent. It clothed him with at least apparent authority in regard to the policy in question; and, as to parties dealing with him on the faith of that, it should not be permitted to deny his authority to act as he did: Hubbard v. Tenbrook, 124 Pa. 291. In Griswold v. Gebbie, 126 Pa. 353, our Brother Mitchell recently said: “ Tlie general rule that a principal is responsible for the misrepresentations of his agent, within his authority, is beyond question ; and the better opinion is, that, as to third parties affected by his acts or words, it is the apparent scope of his authority, and not his actual instructions that must govern. That is the basis on which the business of the world, in the present day, is transacted, and the rule should be enforced in a liberal spirit, with regard to the actual habits of the community.” Othor authorities to the same effect might bo cited, among which are: Millville etc. Ins. Co. v. Mechanics’ etc. Ass’n, 48 N. J. L. 652; Redstrake v. Insurance Co., 44 N. J. L. 294; Wood on Insurance, § 392. The learned author of the work last cited says: “ It would be disastrous to commercial as well as other interests if a person, by acting through the agency of another, could shield himself from liability for such person’s acts ad libitum. Fortunately, no such rule exists; and he who intrusts authority to another, in whatever department of business, is .bound by all that is done by his agent within the scope of his apparent power, and cannot screen himself from the consequences thereof upon the ground that no authority in fact was given him to do the particular act, unless the act was clearly in excess of his apparent authority, or was done under such circumstances as put the person dealing with him upon inquiry as to the agent’s real authority.”

Perhaps it may be said that, while the evidence referred to tends to create an estoppel, the question of Spofford’s real or apparent agency in the premises, etc., should have been submitted to the jury under proper instructions. That would be so, if there was any conflict of testimony, but there is none. All the essential facts are clearly and conclusively established by uncontroverted evidence, part of which was introduced by the company itself. When the facts are admitted, or established beyond all controversy, as they are in this case, there is no necessity for submission to a jury. It then becomes the province of the court to declare the law applicable to such facts. That was done in this case; and, for reasons above suggested, we think there is nothing in the record that calls for the reversal of the judgment.

Judgment affirmed.