Case Name: Aetna Insurance Company v. The Stambaugh-Thompson Company
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1907-03-19
Citations: 76 Ohio St. 138
Docket Number: No. 10113
Parties: Aetna Insurance Company v. The StambaughThompson Company.
Judges: Shauck, C. J., Crew, Summers and Spear, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 76
Pages: 138–163

Head Matter:
Aetna Insurance Company v. The StambaughThompson Company.
Revocation of agent’s authority — Persons previously dealing with agent — Entitled to notice of agent’s discontinuance — Insurance agent receives policy for cancellation — Authority previously revoked — No notice to insured — Insurance company hound— Law of agency — Law of insurance.
1. Persons dealing with one who has recently been a duly authorized and acting agent of another in the transaction of a particular line of business, have a right to rely upon the continuance of his authority to transact business of a similiar character for his principal, until they are in some way informed of the revocation of this authority.
2. On the first day of April, 1904, through the agency of L., the C. insurance company issued a one year fire insurance policy on a stock of goods, etc., belonging to the S. & T. company, on which property there was concurrent insurance. L. was also agent at the same time and place of the A. insurance company. On the 29th day of April,- 1904, his authority to represent the C. company was revoked, but no notice of this fact was given to the insured prior to the fire.
On the 21st day of May, 1904, and while L. was the duly authorized agent of the A. company, he went to the insured and represented that he had been informed by the C. company" that it was carrying' more insurance in that block than it desired, and that if the insured would surrender the policy in that company, he would at once deliver in its stead a policy for the same amount and on the same terms in the A. company, and produced the policy already prepared and duly executed by the proper officers. Thereupon, at his request, the insured, believing L. still to be the agent of the C. company, delivered to him for cancellation the policy' in that company and accepted in lieu thereof the policy issued by the A. company. •
After L. had so delivered the latter policy and received the other, he left the building, and shortly after his departure a fire started in the stock of goods so insured by which they were greatly 'damaged and partly destroyed, after which L. handed back the. policy in the C. company, but the insured retained the policy issued by the A. company, and brought suit to recover its pro rata share of the loss.
Held:
1. That on the foregoing facts, the insured had a right to rely upoñ a continuance of the authority of L. to represent the C. company, and the delivery of said policy to him for cancellation binds that company.
2. L. being at the same time the duly authorized agent of the A. company for the soliciting of insurance therein, and having delivered to the insured its duly executed policy as a substitute for ■ the former policy in the C. company,-the A. compány is liable.
(No. 10113
Decided March 19, 1907.)
Error to the Circuit Court of Mahoning County.
On the 5th day of December, 1904, the defendant in error brought suit against the plaintiff in error to rec'over on a policy of fire insurance issued by it on the 20th day of May, 1904, to be operative from noon of that day until noon of the 1st day of April, 1905. The policy covered a stock of general merchandise, such as hardware, glass, cutlery, nails, mantels, stoves, harness, etc.,, also store' and office furniture, show cases, plumbers’ tools, supplies, etc. The liability of the insurance company should not exceed $3,500, and there was concurrent insurance in a large amount.
The petition contains the usual allegations, which show that on the 21st day of May, 1904, the stock and other insured property was damaged and partially destroyed by fire, of which the insurer had profnpt notice; that proper proofs of loss were made and delivered to the insurer within the time stipulated and that the insured in all other respects performed the conditions imposed by the policy. The prayer is for judgment in the sum of $2,195.87, with interest from date of the loss.
The insurance company filed an amended answer, in which it denies the issuance and delivery of the policy sued on at any time, and specifically denies that it issued the policy attached to the petition; and it denies that there was concurrent insurance in any sum upon said property, with its consent; and denies th.at plaintiff has complied with the conditions of any contract with it, and denies that proofs of loss were furnished to it under any policy of insurance.
The answer contains the affirmative allegations, that prior to the 21st day of May, 1904, the plaintiff had $80,600 insurance on the property described in the petition, but that said insurance was written by companies other than the defendant; that on the'first day of April, 1904, The Connecticut Fire Insurance Company executed and delivered its policy covering said property in the sum of $3,500 for the term of one year from and after said date, and that it constituted a part of the $80,000 insurance covering said property, which' was in force at the time of the fire, and that said policy issued by the Connecticut Fire Insurance Company was in full force at the time of said fire; that on the 29th day of April, 1904, the authority of Y. J. Lamb to act as agent for said company was revoked, and that thereafter he had no authority to represent said company in any respect, and that the defendant company had no knowledge that said Lamb was at any time the authorized agent of said Connecticut Fire Insurance Company, or that said Lamb had ceased to be the agent of said company. '
It is further alleged that on said 21st day of May, 1904, and for a long time prior thereto, and thereafter, the said Lamb was the duly authorized and legal agent of the defendant. It is next alleged that said Lamb, on said 21st day of May, 1904, without the knowledge or consent of' said Connecticut Fire Insurance Company, requested plaintiff to consent to a cancellation of said policy issued by the latter company, and further requested plaintiff to accept in lieu 'thereof and as a substitute therefor, the policy of the defendant for the unexpired time that said Connecticut policy had yet to run. Thereupon the plaintiff agreed with , said Lamb to cancel the said Connecticut policy, upon the express understanding that the defendant would issue its policy of insurance for the unexpired term of the other policy, for the’same amount and covering the same propert)*-, and upon the same terms and conditions, and to take effect as a substitute for the Connecticut policy as-soon as it was duly cancelled; that said Lamb, acting as agent for the defendant, but without its knowledge, and without the knowledge or consent of the ■Connecticut company, agreed with the plaintiff to cancel said Connecticut policy, and to substitute therefor the policy of the defendant, and thereupon wrote and delivered to plaintiff the policy of defendant described in the petition, with the agreement that it should not take effect until said Connecticut policy was fully and legally cancelled; that pursuant to the above agreements said Lamb delivered to plaintiff the said policy of defendant on the 21 st day of May, 1904, and received from the plaintiff said Connecticut policy, and that within five minutes after the delivery of the defendant’s policy and the receiving of the Connecticut policy, a fire was started, which damaged and destroyed the property described in the petition; that when the said fire started said Lamb had in his possession said Connecticut policy, and continued to retain possession thereof until said fire had almost destroyed said property, at which time he delivered the Connecticut policy to plaintiff, and the plaintiff accepted and has since retained the same.
It is further averred that neither of said insurance companies knew of what said Lamb had done until several days thereafter, when defendant notified the plaintiff that it would not stand by the acts of said Lamb, and that said Connecticut policy was never cancelled, but was in full force at the time of the fire.
The reply admits the issuance and delivery of said Connecticut policy, through the agency of Lamb, on the 1st of April, 1904, which covered .the property injured, but that it was cancelled prior to the fire and the policy of defendant issued and delivered to take its place. The reply further says, that if said Lamb was not the agent of the Connecticut company at the time of said cancellation and was not authorized to act as said agent, such facts were unknown to plaintiff, as said Lamb well knew, when he substituted the defendant’s policy for that of the other company.
The foregoing is a summary of the issues made in the pleadings. Additional facts appear in the opinion.
A jury was waived and the case .tried to the court, who found for the plaintiff in the amount prayed for and rendered judgment accordingly, which judgment was affirmed by the circuit court.
The case is here on error to reverse both judgments.
Mr. J. W. Mooney, for plaintiff in error.
Agreement for cancellation was conditional. Guenther on Ohio Insurance Law; Kerr v. Insurance Co., 117 Fed. Rep., 442; Arnfeld & Son v. Assurance Co., 172 Pa. St., 605.
If the agreement for the cancellation of the policy issued” by the Connecticut Fire Insurance Company and the substitution of the policy of the Aetna Insurance Company had not been fully completed before the fire started, it was too late thereafter to consummate the agreement by ratification. Stebbins v. Insurance Co., 60 N. H., 65; Insurance Co. v. McKenzie, 70 Ill. App., 615; Insurance Co. v. Kerr, 129 Fed. Rep., 724; Kerr v. Insurance Co., 117 Fed. Rep., 442.
The policy issued by the Connecticut Fire Insurance Company was not cancelled before the fire.
If the defendant in error had the right to reject the unauthorized act, of which there can be no doubt, there was no legal agreement for the cancellation of the Connecticut fire insurance policy, prior to the fire. If in law, the defendant in error had a right to reject the unauthorized act of Mr. Lamb, the mere fact that the Connecticut Fire Insurance Company was bound and was willing to ratify the unauthorized act of Mr. Lamb, this would not make a valid agreement, fpr the reason the contract'-was not mutual, both parties must be bound or neither. Dodge v. Hopkins, 14 Wis., 630; Clark & Skyles on Law of Agency, page 372; Atlee et al. v. Bartholomew et al., 69 Wis., 43; Townsend et al. v. Corning, 23 Wend. (N. Y.), 435; Reinhard on Agency, par. 153, page 154; Mechera on Agency, Sections 112, 131, 132, 179b; Rolling Stock Co. v. Railroad Co., 34 Ohio St., 450.
The unauthorized act of Mr. Lamb could not be ratified after the fire.
It is a well settled principle of law that a party may ratify a previous or authorized act of another, which he might then, and could still lawfully do himself, and which he might then and could still lawfully delegate to such other to do. In other words, it is essential that the act sought to be ratified could be done at the time of ratification. The defendant in error could not ratify the unauthorized act of Mr. Lamb after the fire, and therefore there could be no ratification by the defendant in error, of the unauthorized act of Mr. Lamb. Zottman v. City of San Francisco, 20 Cal., 96; 81 Am. Dec., 96; McCracken v. City of San Francisco, 16 Cal., 619; Brady v. Mayor et al., 16 How. Pr., 432; O’Conner v. Arnold et al., 53 Ind., 205; Armitage v. Widoe, 36 Mich., 124; Supervisors v. Arrighi, 54 Miss., 668; Township of Taymouth v. Koehler, 35 Mich., 22; Clarke v. Lyon County, 8 Nev., 188.
After the fire the defendant refused to ratify the acts of Mr. Lamb.
The acts of Mr. Lamb being unauthorized, the defendant in error had a right to reject and repudiate the agreement on that ground. And this was so, even if the Connecticut Fire' Insurance Company was bound by'the acts of Mr. Lamb. The rejection of the agreement on the part of the defendant in error, left the policy issued by the Connecticut Fire Insurance ■ Company in force, and, as a matter of law, the policy issued by the Aetna Insurance Company could not and did not take effect under the agreement, for a conditional cancellation of the policy. The agreement being one for a substitution of the Aetna policy for the Connecticut policy, it would therefore follow that there was no liability on the part of the plaintiff in error.
We now come to the question whether Mr. Lamb could legally act as the agent for both companies in the transaction. It is against the policy of the law, as well as against good morals, to permit the same person to act as the agent of two or more separate principals in the same transaction. •An agent can not serve two*masters, for either he will hate the one and love the other, or else he will hold the one and despise the other.
It is our contention that the agreement being one for a conditional cancellation of the policy issued by the Connecticut Fire Insurance Company and the substitution of the Aetna policy, or one of reinsuring the Connecticut Fire Insurance Company by the Aetna Insurance Company, that Mr. Lamb could not act for both of these companies, unless with the knowledge and consent of both companies. Joyce on Insurance, Volume 1, Section 661; Bell v. McConnell, 37 Ohio St., 396; 41 Am. Rep., 528; Insurance Co. v. Insurance Co., 138 N. Y., 446; Lee v. Smith, Assignee, 84 Mo., 304; Mechem on Agency, Section 67; Copeland, v. Insurance Co., 6 Pick., 198; Insurance Co. v. Insurance Co., 14 N. Y., 85; Meyer v. Hanchett, 39 Wis., 419; 43 Wis., 246; Greenwood v. Spring et al., 54 Barb., 375; Sumner v. Railroad Co., 78 N. Car., 289; Shirland v. Iron Works Co.; 41 Wis., 162; Bray v. Morse, 41 Wis., 343; Rice et al. v. Wood, 113 Mass., 133; 18 Am. Rep., 459; Stewart v. Mather et al., 32 Wis., 344; Farnsworth et al. v. Brunquest et al., 36 Wis., 202; Farnsworth v. Hemmer, 1 Allen, 494; Walker v. Osgood, 98 Mass., 348; 93 Am. Dec., 168; Raisin v. Clark, 41 Md., 158; 20 Am. Rep., 66; Lynch v. Fallon, 11 R. I., 311; 23 Am. Rep., 458; Pugsley v. Murray, 4 E. D. Smith, 245; Everhart v. Searle, 71 Pa. St., 256; Scribner et al. v. Collar, 40 Mich, 375; Insurance Co. v. Insurance Co., 20 Barb., 468; May on Insurance, Section 125; Cooley on Insurance, page 351; Insurance Co. v. McKenzie, 70 Ill. App., 615.
Messrs. Móore & Craver and Mr. W. G. Guenther, for defendant in error.
1. Was there any condition attached to the . cancellation of the policy of the Connecticut Fire Insurance Company? That the cancellation of the Connecticut's policy was unconditional, is evident from the testimony of Mr. Vallance, who was the employe of defendant in error, having full charge' of its insurance affairs.
Mr. Vallance supposed that Lamb, who had 'issued the Connecticut's policy and claimed still to be its agent, was such agent and authorized to accept the surrender of the policy.
There was, of course, this condition attached by Mr. Vallance to the surrender of the Connecticut’s policy; viz., that one of the Aetna’s, for like amount and with like conditions, was to be. delivered to the Stambaugh-Thompson Company to take the place of the former policy, but this condition was, before the fire, fully complied with by plaintiff in error, through its duly authorized agent, delivering its policy to defendant in error.
If the citation from Guenther on Insurance in plaintiff in error’s brief be at all apropos, it will be seen that the condition referred to as precedent to the cancellation taking effect has here been fully complied with, viz., there was delivered to the insured a valid and binding policy to take the place of the one cancelled.
2. Was Mr. Lamb a proper person to whom "the policy of the Connecticut Fire Insurance Company might be delivered for the purpose of cancellation so as to make such cancellation effective?
■ (a) Was Lamb the agent of the Connecticut Fire Insurance Company as regards its policy issued to defendant in error until the latter had been given notice of the revocation of. the agent’s authority ?
Mr. Lamb had been .the agent of the Connnecticut Fire Insurance Company and had issued its policy/ to the defendant in error. The latter had no knowledge that his authority had been revoked.
The defendant in error had no knowledge of the revocation of his authority, and certainly would have every right to suppose that the person who was the general agent of that insurance company on April 1st, was telling the truth when, on May 21st, he represented himself to be still the agent of that company.
In Ish v. Crane et al., 8 Ohio St., 520, the liability of the principal for the acts of an agent whose authority has been revoked, but without notice of such revocation to third parties with whom such agent deals, is fully considered.
This question was again considered in Ish v. Crane et al., 13 Ohio St., 574, and the doctrine reaffirmed. Insurance Co. v. Threlkeld, 60 Ark., 539; Insurance Co. v. McClain, 96 U. S., 84; Insurance Co. v. Davis, 37 S. W. Rep., 582.
(b) Did Section 3644, Revised Statutes, make Mr. Lamb the agent of the Connecticut Fire Insurance Company in all matters pertaining to its policy issued to defendant in error?
We insist that by the terms of this statute, Mr. Lamb was made the agent of the insurance company for all purposes in relation to its policy to defendant in error, and that neither that company nor any one else can deny his authority as such agent.
It would be a queer rule, if, in the face of this statute and in the absence of knowledge of the revocation of his authority, a policy holder would be obliged to positively inform himself of the authority of the agent before he could safely deliver up his policy to such former agent for cancellation.
If the person who procures the application for insurance be, by the statute, the agent of the insurer even as to renewal policies — a matter requiring the exercise of discretion and judgment — what reason can be advanced for denying his right to act as such agent in the mere acceptance of the surrender of the policy for cancellation where his duties are simply those of an automaton?
(c) Is plaintiff in error estopped from denying the authority of Mr. Lamb to receive the surrender of the policy of the Connecticut Fire Insurance Company?
But if we err in our contention that, for the reasons above given, the surrender of the Connecticut’s policy to Lamb operated as a surrender of the policy to the duly authorized agent of that company, does it now lie in the mouth of Lamb’s employer, the plaintiff in error, to say that Lamb was not authorized to accept the surrender of such policy?
It undertook through its duly authorized agent to take away from a rival company some of its business and to secure that business for itself. By its acts, it induced the defendant in error to part with and surrender up for cancellation its policy with the Connecticut Fire Insurance Company.
It is too late for plaintiff in error now to say that its own agent secured this new business by misrepresentation and that he had no right to accept the surrender' of the other- policy and to substitute therefor its own policy.
When Lamb, by his misrepresentations, secured this business for his principal, the plaintiff in error, he acted deliberately with full knowledge of all the facts, including defendant in error’s ignorance of the revocation of his authority.
Upon the proposition that the act of the agent is the act of the principal and that the acts of the agent may work -an estoppel against the principal we cite Mtiy on Insurance, Sections 141, 142 and 143-
3. Was any action upon the part of the Connecticut Fire Insurance Company necessary to make the cancellation effective? The provision of the surrendered policy with respect to this matter is the one found in all standard insurance policies and is as follows:
“This policy shall be cancelled at any time at the request of the insured, or by the company, by giving five days’ notice of such cancellation.”
All standard policies contain the provision that the company may cancel by giving five days’ notice of such cancellation; of course, no subsequent policy, conditioned upon' the cancellation of the first, can take effect until the five days’ notice required for the cancellation of the former policy has expired, nor does this policy cease to be valid until the expiration of such time.
In the case of the assured no. such notice is necessary, nor is any surrender of the policy required. A bare request for cancellation made by the insured is sufficient. Iron Co. v. Insurance Co , 127 N. Y., 608; Insurance Commissioner v. Insurance Co., 68 N. H., 51; Train v. Insurance Co., 62 N. Y., 598; 68 N. Y., 208.
4. Could the status of the parties, as it existed at the time the fire broke out, be in 'any wise changed by the acts of the defendant in error subsequent thereto ?
Counsel for plaintiff in error argues at length and ably the proposition that, if the cancellation of the one policy and the substitution therefor of the other did not become effective before the fire started, it was too late thereafter to make the cancellation effective.
We certainly do not demur to this contention; but counsel immediately proceeds to argue in favor of a proposition absolutely inconsistent with this position, viz.: That because the Connecticut’s policy was handed back by Lamb to defendant in error after the fire broke out, such policy should not be considered as cancelled and the Aetna’s in force.
It appears to us too plain for argument that the rights and obligations of the parties could not be affected by anything that any of them did subse quent to the fire with reference to ratifying or repudiating the actions of Mr. Lamb. If the Connecticut's policy was cancelled and the Aetna's valid when the fire broke out, defendant in error could not, even if .it had sought to re-exclrange the policies thereafter, change the respective rights and obligations of the insurance companies. On the other hand, if the cancellation of the Connecticut’s policy, brought about by its surrender, was hot complete when the fire broke out, no action of the Connecticut Fire Insurance Company or of the defendant in error could make it so. Insurance Co. v. Insurance Co., 55 N. Y., 343.

Opinion:
Price, J.
The material facts of this case are not seriously in dispute. The first paragraph of the answer makes denial of some of the averments of the petition, but thé balance of the answer gives ,an affirmative statement of what the defendant, the Aetna Insurance Company, claims the real transactions between it, the Stambaugh-Thompson Company and The Connecticut Fire Insurance Company were, preceding the fire. ^
One V. J. Lamb, on the first day of April, 1904, and for some time prior thereto, had been a local agent for The Connecticut Fire Insurance Company, and was located in the city of Youngstown, Ohio, in which was the store and place of business of the Stambaugh-Thompson Company. Through his agency, said Insurance Company, on- the 1st day of April, 1904, issued and delivered to The Stambaugh-Thompson Company-a policy tof insurance in the sum of $3,500, covering the stock of goods and other merchandise described in the petition. There was other concurrent insurance at that time of over $75,000. The premium was $30.15, but was not paid until after the fire. On or about the 29th day of April, 1904, the authority of Lamb to represent in any respect said Insurance Company was revoked, and at the time of the fire on the 21st day of May, 1904, said Lamb was not the agent • of said company, but The Stambaugh-Thompso.n Company believed that he was, and had no notice or knowledge then of the fact that his agency had been revoked. Prior to the fire, and on that day, said Lamb was the agent in said city of the Aetna Insurance Company, and had authority' to fill up blank insurance policies issued by that company, which had been signed by its proper officers and delivered to him, so that the said agent, when he desired, could fill said blanks, and when so filled and the policy countersigned by him, the same would become effective on delivery to the insured without further action on the part of the company. There is ño dispute in this court, and there was not much in the trial court, about the following prominent facts: In the forenoon of the 21st day of May, 1904, and some time preceding the fire, Lamb met Mr. Val-lance, of The Stambaugh-Thompson Company, on the street in Youngstown, not far from the store, and informed Vallance that The Connecticut Fire Insurance Company had communicated to him, Lamb, that it had more insurance in that block than it cared to carry, and that he had transferred it into another company. When asked by Vallance what company he referred to, Lamb replied, the Aetna. Vallance, who was in charge of the insurance affairs of Stambaugh-Thompson Company, expressed his satisfaction with the Aetna and di rected Lamb to go to the office in the store and tell Mr. Freed, a bookkeeper there, of the arrangement, and that he should hand over to Lamb the policy issued by The Connecticut Fire Insurance Company and take in its place the policy of the Aetna Company, all of which was done. The Aetna policy was delivered and the Connecticut policy surrendered to Mr. Lamb. These policies were for the same amount and on same conditions. After Lamb had taken possession, of the Connecticut policy he left the building and when on the street, a very few minutes after leaving the store, he heard the fire alarm and soon ascertained that a fire had started in the store of The Stambaugh-Thompson Company which he had so recently left. The fire was in the rear and upper part of the building. During the progress of the conflagration Lamb, uncertain as to what course he should pursue, handed the Connecticut policy to Mr. Stambaugh, president of The Stambaugh-Thompson Company, and he retained it, as well as the policy issued by the Aetna Company. The insured company, two or three days after the fire, paid the premium on the Connecticut policy for the entire term for which it was issued, and at the same time paid the premium for the Aetna policy. The latter company returned the premium to the insured, but it was again sent to the office of Mr. Lamb, its agent. Proper proofs of loss were made to both companies, and - there is no dispute concerning them, or the amount of the loss, but each company declined-to pay it, and hence the suit under review.
It is not claimed that the fire had started at the time the policies were exchanged, nor is there any evidence to support such claim if it were .made. Therefore the liability of the insurance company must be determined from its status at.that important crisis. It was not intended or understood that both policies should be binding, but that the Aetna should be a substitute for the other policy. Therefore, on the facts narrated,-is the Aetna Company liable? The answer to this question is to a large extent dependable upon the right of the insured to regard and deal with Lamb as the representative of the Connecticut Company. If the revocation of his agency in April preceding the fire was effective as to third persons who were not apprised' of such revocation, then the transactions between Lamb and the insured prior to the fire were void, and there was no valid cancellation of the policy issued by that company. The lifting or taking up of such policy on one side and its surrender to him by the insured was of no avail. But the general rule of revocation of agency does not prevail on the facts of this case, because it is undisputed that thé Stambaugh-Thompson Company had no notice or knowledge that the agency had been revoked, and having dealt with Lamb in the placing of the Connecticut Company policy, on the 1st of April just preceding, it believed he was still its agent at the time the exchange of policies was made. Under such circumstances, and for the purposes of the exchange, the law regarded Lamb as still the representative of that company. This proposition of the law of agency is not contested, but is agreed upon as the rule that should govern this case. It is the rule recognized in Ish v. Crane et al., 8 Ohio St., 520; same parties in 13 Ohio St., 574. See also Springfield F. & M. Ins. Co. v. Davis, 37 S. W. Rep., 582; Burlington Ins. Co. v. Threlkeld, 60 Ark., 539; Southern Life Ins. Co. v. McCain, 96 U. S., 84. There are many other supporting authorities, but as the rule is conceded, we need not cite them.
We are now brought to the question, was the Connecticut policy cancelled prior to the fire? As we have already said, it is agreed upon all hands, that both policies were not to be in force, for that would have created additional insurance' when such was not the purpose of the parties. It is earnestly urged for plaintiff in error that there was no .valid cancellation effected; that at the most, there was but a conditionál cancellation, and that statement implies that something had to be done or said -by the Connecticut Company, after the Stambaugh-Thompson Company surrendered the policy to Lamb, and that as 'nothing was said or done by the company towards the completion of a cancellation, then in fact and law none was made.
The policy contains the following provision: "This policy shall be cancelled at any time at the request of the insured; or, by the company by giving •five days' notice of such cancellation. If this policy shall be cancelled as hereinbefore provided, or become' void or cease, the premium having been actually paid, the unearned portion shall be returned on surrender of this policy or last renewal, this company retaining the customary short rate; except that if this policy is cancelled by this company giving notice, it shall retain only the pro rata premium."
If the company exercises the right of cancellation it must give five .days' notice thereof, so that the insured may procure other insurance, and until the expiration of the five days the policy is in full force. On' the other hand, it is sufficient if the insured request its cancellation of the company or its agent for that purpose, and with such request delivers the policy to the company or such agent. No agreement for cancellation is necessary. If the company desires to cancel and gives the five days' notice, it can cancel despite the protest of the insured, for his consent is not essential. No meeting of the minds is necessary, and no act on his part is necessary. And, if the insured desires a cancellation, he may request it and surrender the policy to the proper party for that purpose. Train v. The Holland Purchase Ins. Co., 62 N. Y., 598; same parties, 68 N. Y., 208.
As said by the court of appeals in Crown Point Iron Co. v. Aetna Ins. Co., 127 N. Y., 608: "While a method of terminating the insurance upon the motion of the insured is not specified, except that the insured party is to request it, the language of the contract indicates that the subject is within his control and that the terminating act is to be done by him alone, without any concurrent or supplemental act on the part of the company. While it takes two to make a contract, one may end it, if the contract itself so provides."
And again, on page 615, the same court says: "Although the language of the parties is at the 'request' of the insured in one instance, an on ^notice' to the insured in the other, we think that in both it is within the power of the party desiring to end the contract to do so without either consent or action on the part of the other. When the insured surrenders the policy and requests that it be can-celled, he can do no more. Unless that ends the contract he is powerless to end it, and the company, while able itself to hang on or let go as it wishes, can hold him against his will."
We have seen in the statement of facts in the case before us, that the surrender of the Connecticut policy and the substitution of the Aetna policy was had in pursuance of an agreement between the insured and Lamb, who, as the insured believed, still represented the Connecticut Company. The very act of surrendering one policy and accepting the other in its stead implies both request and direction that the first be cancelled. The insured could go no further or do more. What marks may be put on the policy or entries made on the books of the company is a matter of its own. Regarding Lamb as the agent of the Connecticut Company, as we must do, because StambaughThompson Company believed him still to be such agent, where is there any conditional cancellation in this case? True, after the fire or near the end of its work, Lamb handed back the Connecticut policy, but that was useless, for, as already stated, the status of the insurance companies, for weal or woe, became unalterably fixed by the starting of the fire, and neither the return of that policy nor the subsequent payment of its premium by the insured changed the relations of the parties.
But another proposition is urged against the liability of the Aetna Company. It is stated on page twenty-five of brief for plaintiff in error in the following language: "If the defendant in error (The Stambaugh-Thompson Company) had the right to reject the unauthorized act (of Lamb), of which there can be no doubt, there was no legal agreement for the cancellation of the Connecticut fire insurance policy prior to the fire. If, in law, the defendant in error had the right to reject the unauthorized act of Mr. Lamb, the mere fact that the Connecticut Fire Insurance Company was bound and was willing to ratify the unauthorized act of Mr. Lamb, this would • not make a valid agreement, for the reason the contract was not mutual, both parties must be bound or neither." A very plausible argument is constructed on this proposition, and several authorities cited and quoted from to support it, such as Dodge v. Hopkins, 14 Wis., 630; Atlee et al. v. Bartholomew et al., 69 Wis., 43; Townsend et al. v. Corning, 23 Wend., 435; Mechem on Agency, and other textbooks. On page twenty-four of the same brief, counsel for plaintiff in error say: "We contend' that the defendant in error was not bound by the unauthorized act of Mr. Lamb. The defendant in error had the option, upon discovering that Mr. Lamb acted without authority for the Connecticut Fire Insurance Company to reject or ratify the un- . authorized act of Mr. Lamb, if a ratiñcation of such a contract could be had after the fire."
It may be said, that the general rule of law embraced in the quoted statements of counsel is not disputed, but it does not control under the facts of' the present case. We must not lose sight of the principle; already stated, and upon which counsel for these contesting parties agree, that the status of the two companies' and the insured at the beginning of the fire is to be reckoned with in working out their rights. And it is more than doubtful that. a ratification or repudiation of the act of Lamb by the Connecticut Company after the fire could in any way affect its liability. At any rate, there is nothing in the record to show that said company did repudiate Lamb's acts after the fire. It is quite clear that the insured did hot repudiate' what had been done, for. it insists on holding on to the fruits of the substitution of the Aetna policy. Beyond all cavil, Lamb" was the authorized agent of the latter company at the time of the exchange of policies, and it is in no condition to reject or repudiate what Lamb did. Therefore we have no facts in this case upon which to predicate the propositions and authorities of learned counsel. His quotation from' Clark & Skyles on the Law of Agency, 372, is that "the ratification of a contract entered into by a person acting as agent, but without authority so to do, made by a person for whom he assumed to act as principal, can not validate the contract so as to bind and be in force against the other party without his consent." This is, in substance, the doctrine of the third section of the syllabus in Atlee et al. v. Bartholomew et al., 69 Wis., 43, cited for plaintiff in error. Who is the "other party" without whose consent the ratification is of no avail in the language quoted? Certainly not the Aetna Insurance Company, but rather The StambaughThompson Company. It has not rejected the acts of Lamb, but consents, if consent can be given, that his acts shall stand, and it is now endeavoring to enforce its rights under the acts of Lamb.
And so with the case of Dodge v. Hopkins, 14 Wis., 630, and other authorities cited. In that case a land contract was involved and the following from the syllabus shows what was decided, bearing upon the subject of agency: "Where a contract for the sale of land is not binding upon the owner of the land, because made by a person who assumed to act as his agent without any authority, it is not binding upon the other party. No subsequent act of the owner in ratification of the contract could make it obligatory upon the other party without his assent. If part of the purchase money was paid to the agent, the owner of the land was. at liberty to reject it, and his subsequent acceptance of it, being an act with which the other party was in no way connected, imposed no obligation on the latter until he actully assented to it." This represents the sum and substance of all the authorities cited on the subject we are now discussing, although they are couched in different forms of expression. If we can apply the law so announced to the present case, The StambaughThompson Company — "the other party" in the legal figure, was not bound by the unauthorized acts of Lamb until it assented thereto. And it is clear here that if assent could be given after the fire, which we need not decide, it has been given and is relied upon. But if the assent could not be given after the fire it is because that event determined the relative position of the parties, and neither assent or dissent thereafter could alter their rights. The insured could then stand upon the strength which the law gives to an assumed agency on the part of Lamb upon which the insured relied in good faith.
Hence, the doctrine invoked by plaintiff in error does not give" relief.
However, it is said for plaintiff in error, in one branch of its brief, that the defendant in error, by certain acts, clearly indicated its intention to and did refuse to ratify the unauthorized acts of Lamb; and in another branch it is baldly asserted that "the defendant in error could not ratify the unauthorized acts of Lamb after the fire,, and therefore there could be no ratification by the defendant in error, of the unauthorized act of Lamb." These statements are inconsistent. If the defendant in error could not ratify Lamb's acts after the fire, it would seem true; also, that a refusal 'or neglect to ratify after the fire would be a vain thing. The peculiar circumstance of the fire following so soon upon the heels of the exchange no doubt tended to confuse the insured — each company claiming to be exempt, and this may account for proofs of loss and payment of premiums to both.
It is further claimed that Lamb, in the transaction of negotiating an exchange of policies, was exercising a double agency, which rendered the transaction void, inasmuch as the insured knew that he was attempting to act as agent for each of the insurance companies. The plaintiff in error states its claim in the language of the court in The Empire State Ins. Co. v. American Central Ins. Co., 138 N. Y., 446, where it is said: "A person who is employed as agent by .two principals may not, without their assent, act for both in making a contract between them in a matter where he is invested with a discretion by each, and in which each is entitled to the benefit of his skill and judgment, and a contract so negotiated is void at the option of a non-assenting party." In pur case, the agent Lamb was not engaged in making a contract between the two insurance companies — the two principals involved in the rule — nor was there any such contract made, and therefore the discretion, skill and judgment of the agent were not exercised in any contract made by him .between two principals. It is not intimated that in the substitution of the Aetna for the other policy, Lamb was also acting as the agent of the insured, and we must again observe that the authorities cited do not fit the case under review, for the- agent did not make a contract between the two principals. He acted severally for each company.
But is the Aetna company in a position to claim the benefit of the rule invoked? Lamb was its agent, and having been let out of the service of the Connecticut Company he encouraged an ambition to take some of the latter's business and give it to the former. In getting business away from another company he was acting within the scope of his authority as agent of the Aetna, although he was not instructed to use falsehood or dishonest means to obtain it. Assuming also to represent the Connecticut, as once had been his relation, he accepts a surrender of the latter's policy and.substitutes that of the Aetna. If he prevaricated in his course of conduct with the insured, he was the prevaricator of the Aetna Company, and we are unable to see how it can evade the consequences of his act.
We find no substantial error in the judgment of the circuit court and the same is affirmed.
Judgment affirmed.
Shauck, C. J., Crew, Summers and Spear, JJ., concur.