Kraber v. Union Insurance

Opinion,

Mb. Justice Williams :

The proposition that an agent is bound to follow the instructions of his principal, is too elementary to require discussion. Where an agent is charged with the performance of some particular duty or the conduct of some undertaking, and is left without instructions as to the manner in which his work is to be done, he must exercise his own judgment in the premises, with good faith towards his principal: Porter v. Patterson, 15 Pa. 229; Conway v. Lewis, 120 Pa. 215. But when the principal gives instructions, they are binding on the agent and he must follow them. He has no legal right to sit in judgment on the wisdom or the expediency of the directions that are given him. His duty as agent is to execute the orders of his principal, with reasonable promptness and with fidelity.

The plaintiff in the court below is an insurance company. Kraber was a duly appointed agent, with authority to countersign and issue policies of insurance against fire, subject, however, to the approval of the company when his report came to their hands. On June 27, 1881, he executed and delivered to Isaac Frazier a policy of insurance upon his steam saw-mill at a premium of two and one half per cent, to take effect on the first day of July. He reported this insurance to the company on the 29th of June, and on the next day the company sent him the following instructions: “ Please relieve us of No. 55,122, Isaac Frazier. It is no doubt a good mill, but we cannot see any profits in steam saw-mills in this state, at the low rate you offer. The minimum rate offered is four per cent,"and it is none too high. Advise cancellation.” Kraber replied to this letter on the following day, July 1st, in these words: “Yours of yesterday is received desiring to have can-celled risk 55,122, Isaac Frazier; will be attended to; ” and proceeded in the same letter to complain at some length that the rates insisted on bjr the company were too high, and that other companies were offering to take the same or similar risks at lower rates. On or before the 7th of the same month the mill was burned. The company finding that their agent had not cancelled the policy, as directed, paid the amount of the loss as adjusted, viz., five hundred and twelve dollars .10, and brought this action against their agent to recover the amount from him.

There are three questions raised here : First. Was the construction of the letter of June 80, 1881, from the company to Kraber for the court or the jury? We agree with the learned judge of the court below, that the letter is not ambiguous, but is a plain direction to the agent to cancel the policy because the risk had been taken at too low rates, with the general direction that four per cent was the minimum rate at which such risks could be taken. It is quite clear that Kraber had just as little difficulty in understanding it when it came to his hands, for he replied, saying, that their letter “ desiring to have can-celled risk 55,122, Isaac Frazier, will be attended to.” It was not error therefore for the court to instruct the jury as to the meaning of the direction given by the company in the letter of June 30, 1881. The • next question raised, is whether, if the construction of the letter be for the court, it was correctly interpreted. This is answered in answering the first question. It is because the meaning is plain and the letter free from ambiguity, that its construction is for the court, and the instruction given to the jury follows the plain and obvious meaning of the words employed.

The question mainly relied on by the plaintiff in error is the third, which is raised by the third assignment. A mass of correspondence between Kraber and the company was offered, for the purpose of showing a course of dealing between the parties such as to justify him in disregarding the order to cancel the policy issued to Frazier. The court below looked into these letters to ascertain their import, and then rejected the offer. They relate to other risks placed by the agent in the course of his business. They show an effort on the part of the company to maintain its schedule of rates, and one on the part of Kraber to get below it. They show frequent and earnest remonstrances on behalf of the company, and frequent complaints by Kraber on the subject of rates. Sometimes the company yielded a point to their agent, and sometimes they insisted on the cancellation of risks taken below their regular rates. Regarded as a whole the correspondence shows no settled course of dealing, but a constant 'controversy over the rate at which risks should be carried, and could in no manner enlarge the powers of Kraber or relieve him from his duty to obey the plain directions of his principal.

The court below was right, therefore, in rejecting this offer. The correspondence did not sustain the purpose for which it was offered, and its admission could have no other effect than to confuse the jury. The fact that the company received the premium from its agent, after the fire, and after the fact of his failure to cancel the policy came to its-knowledge, does not relieve him. His receipt of the premium was the receipt of the company. When he was directed to return the money and cancel the policy, he did not do it. His failure to do as he was directed, is the ground of his liability, and the loss suffered by his principal furnishes the proper measure of damages.

We see no error in the rulings of the court below, and The judgment is'therefore affirmed.