Case Name: Kittie Merserau, Administratrix, etc., Respondent, v. The Phoenix Mutual Life Insurance Company, Appellant
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1876-05-30
Citations: 66 N.Y. 274
Docket Number: 
Parties: Kittie Merserau, Administratrix, etc., Respondent, v. The Phoenix Mutual Life Insurance Company, Appellant.
Judges: 
Reporter: New York Reports
Volume: 66
Pages: 274–287

Head Matter:
Kittie Merserau, Administratrix, etc., Respondent, v. The Phoenix Mutual Life Insurance Company, Appellant.
(Argued March 23, 1876;
decided May 30, 1876.)
The facts that a person is authorized hy a foreign life insurance company to solicit and take applications for insurance, to issue and deliver policies and to receive premiums, and deliver receipts for them, do not, as matters of law, constitute him a general agent of the company, authorized to waive conditions in a policy as to payment of premiums. (Church, Oh. J., Andrews and Miller, JJ., dissenting.)
As to whether, whereupon a policy there is indorsed a notice that no agent has authority to receive any premiums without first presenting a receipt signed by the president or secretary of the company, or to alter the policy or receive any premium after it is due, a general agent can waive the condition forfeiting it in case of non-payment of premiums, qucere (Church, Ch. J., Andrews and Miller, JJ., holding that he can; Allen, Batallo and Earl, JJ., that he cannot in the absence of evidence that the company has, by direct authority, enlarged his powers, or has knowingly permitted him to act beyond the scope of the power as thus limited; Eolger, J., not voting).
Appeal from judgment of the General Term of the Supreme Court in the third judicial department affirming a judgment in favor of plaintiff, entered upon a verdict.
This action was upon a policy of life insurance issued by defendant, a foreign corporation, upon the life of Esdras Shear, husband of plaintiff’s intestate.
The policy was issued in 1871; the premiums required to' be paid semi-annually, “ on or before the thirty-first day of August and February of every year.” The policy contained this clause:
“ Second. If the said premiums shall not be paid at the office of the company, in the city of Hartford, Connecticut, or to an agent of the company, on his producing a receipt signed by the president or secretary, on or before the date above mentioned, then, in every such case, the said company shall not be liable for payment of the sum insured, or any part thereof, and this policy shall cease and determine.”
On said, policy was indorsed a notice to policyholders in the words following, viz.: “ The insured will please take notice that no receipt for premium on this policy is valid unless signed by the president or secretary of the company, at Hartford, Connecticut; and that no agent has authority to receive any premium without first presenting a regularly signed receipt from the president or secretary; or to interline, alter or otherwise change any policy, or to receive any premium after date of its being due, without special permission from the officers of the company.”
Shear died September 14,1872. The defence was, that the semi-annual premium due August 31, 1872, was not paid. It was claimed, upon the part of the plaintiff, that the payment' was waived by Mr. Weller, an agent of the company at Hudson, in this State. Plaintiff’s evidence tended to show that said Weller called upon Shear, who spoke to him about paying' the premium, but that Weller stated that he had not the company’s receipt, and told Shear to give himself no uneasiness, that he would keep him good with the company. Mr. Weller’s authority as agent, as testified to by him, was, to call upon parties and solicit them to insure in his company; to receive their applications, to forward.them to the company, through Mr. Bull, the general agent, and when the policy came, to deliver it, and to collect the premium and all subsequent renewal premiums. Hpon cross-examination it appeared that, in his advertisements, etc., he held himself out as a general agent.
In reference to the waiver and the agent’s authority, the court charged as follows.
“ The plaintiff says, true, we did not pay the premium when it was due, but you, the company, by your authorized agent, the party whom you authorized us to treat with, the party who was authorized to take the insurance, and to issue and deliver policies and receive premiums, and deliver receipts for them, this agent entered into a solemn agreement with the assured that he would keep him safe, and see that his insurance was kept good with the company. The plaintiff says that Mr. Shear offered, before any default had occurred, to pay that premium which was to become due in the future, that the agent declined to receive it because he had not the renewal receipt of the company with him, without which he was unauthorized to receive premiums, and that Mr. Shear, thereupon, said that he would rather have it settled up now, because he did not want to have the policy run out, whereupon this agent said, ‘ give yourself no trouble about it, I will see that you are kept all right with the company.’ That is the state of facts which the plaintiff asks the jury to believe was sustained by the agent, and she claims that thereby there was a waiver of the condition requiring strict payment by the assured in order to keep the policy good, blow, if you believe that the state of facts alleged by the plaintiff is sustained by the evidence, then, as a matter of law, I charge you that that was a waiver of strict payment made by an authorized agent acting for, and who had a right to act for, this company.”
Defendant’s counsel excepted, “to that portion of the charge which says, substantially, that if the jury believe the facts, as testified to by the plaintiff’s witnesses, those facts constitute a waiver of payment on the part of the defendant, made by an authorized agent.”
Further facts appear in the opinions.
Samuel Hmd for the appellant.
Defendant’s agent was not authorized to waive the condition of the policy as to payment of the premium. (Mech. Bk. v. R. R., 3 Kern., 634; Wilson v. Gen. Ins. Co., 4 id., 418; Burton v. Orient Ins. Co., 4 Bosw., 265; Murdock v. Chenan. Ins. Co., 2 Comst., 210; Catori v. Am. L. Ins. Co., 33 N. Y., 491; Big L. and Ac. Gas., 336; Bliss on Life Ins., 478; Busby v. L. Ins. Co., Md., April, 1874; Bonton v. Am. M. L. Ins. Co., 25 Conn., 542.)
It. E. Andrews for the respondent.
The waiver by Weller of the payment of the premium was valid and effectual. (Miller v. Phoenix Ins. Co., 27 Iowa, 203; 1 Am. R., 262; O’Reilly v. Guar. M. L. Ins. Co., 8 Hun, 460; Ins. Co. v. Wilkinson, 13 Wal., 222; 3 Big., 818; Dunlap’s Paley on Ag., 199; Carroll v. C. O. Ins. Co., 10 Abb. Pr. [N. S.], 166, 173; Sheldon v. Ct. F. Ins. Co., 26 N. Y., 460; Trustees, etc. v. Bklyn F. Ins. Co., 19 id., 306; Tiddle v. Market Ins. Co., 29 id., 184; Owen v. F. J. S. Ins. Co., 57 Barb., 518; Van Allen v. J. S. Ins. Co., 4 Hun, 403; Bklyn F. Ins. Co. v Miller, 12 Wal., 283; 2 Big., 764; Hotchkiss v. Ger. F. Ins. Co., 5 Hun, 986; Dean v. Etna L. Ins. Co., 4 T. & C., 497; Badine, Ex., v. F. Ins. Co., 51 N. Y., 117; Wood v. Pough. Ins. Co., 32 id., 620; N. Y. C. Ins. Co v. Nat. Prot. Ins. Co., 20 Barb., 469; Rowley v.Em. Ins. Co., 36 N. Y., 550; Behen v. Wansburgh Ins. Co., 35 id., 131; Whitwell v. Put. F. Ins. Co., 6 Lans., 166;Dohn v. F. J. S. F. Ins. Co., 5 id., 277; Pitney v. G. Ins. Co., 61 Barb., 345.)

Opinion:
Allen, J.
By the terms of the policy the liability of the insurers ceased upon the failure of the insured to pay the renewal premiums at the office of the company at Hartford, or to an agent of the company, on his producing a receipt signed by the president or secretary on or before the days at which they were payable. The premium which became due in August, 1871, was not paid at or before the day, nor has it been paid since. The policy was therefore of no force at the time of the death of the insured, and the insurers are not now liable upon it unless the condition was waived by the company or by an authorized agent. It is not claimed that the company has, by the action of its board of managers, or by its executive or any of its officers, varied the condition referred to. If its performance has been dispensed with and the policy continued in force notwithstanding the default in the payment, it has been by the act and agency of Weller, the local agent of the insurers at Hudson.
[ A lax idea seems to prevail, and certainly is persistently urged upon this appeal, that an agent for an insurance company, representing it and transacting business for it at a distance from its principal place of business, is, and must necessarily be a general agent, with full authority to bind his principals in all matters within the territorial bounds of his agency, and it is sought to render void the most solemn and important stipulations of the contract upon this theory. There is no countenance for the doctrine in any well-considered ease. Agents of underwriters, at a distance from their principals, are either general or special agents, possessing plenary or limited powers, depending upon the terms of the grant of power or the powers exercised with the assent of the principals; and the extent of their authority is to be determined by the same rules that control in respect to other agencies.
The rule is well expressed in Insurance Company v. Wilkinson (13 Wall., 222) and Miller v. The Phoenix Insurance Company (27 Iowa, 203). Insurance companies doing business by agencies at a distance from their principal place of business, are responsible for the acts of the agent, within the general scope of the business intrusted to his care, and no limitations of his authority will be binding on parties with whom he deals which are not brought to their knowledge.
It is upon and within this general principle that insurance companies have been held bound by the acts of their agents in dispensing with or varying the terms and conditions of their policies of insurance. (Insurance Company v. Colt, 20 Wall., 560; Bodine v. Exchange Fire Ins. Co., 51 N. Y., 117; Owen v. Farmer's Joint Stock Ins. Co., 57 Barb,, 519 ; Carroll v. Charter Oak Ins. Co., 10 Abb. [N. S.], 166; Sheldon v. Atlantie Fire and Marine Ins. Co., 26 N. Y., 460.)
The actual authority of W eller for the defendant corpora fcion was to solicit insurance, receive and forward applications to the general managers at Albany, and on receipt of the policy to deliver it and collect the premiums, and to collect the renewal premiums when in possession of the receipt of the company, and upon the delivery of the same to the insured. The insured had no reason to suppose, from any dealings with the agent or his transactions with others, that his powers were other or different from those specified. By a notice upon the policy, the authority of the agent in respect to the semi-annual renewal premiums was emphatically and distinctly limited, and he was only authorized to receive them upon previously and regularly signed receipts from the president or secretary. He required a special authority to collect and receive each renewal premium as the same should become payable. His agency in respect to the policy absolutely ceased upon its delivery, and the power was to be renewed and the renewal evidenced by the possession of the specified receipt before he could perform any act on behalf of the company in respect to subsequent payments. The insured had knowledge of this limitation and was estopped from claiming in hostility to it. The precise point was decided by the Court of Errors and Appeals of Hew Jersey in Catoir v. American Life Insurance and Trust Company (33 N. J., 487), in which Judge Beble, in a well considered opinion, concurred in by the court, asserts, in support of the judgment, the very reasonable doctrine, which is consistent with all the eases, that when the policy itself contains an express limitation upon the power of agents, an agent has no legal right to contract as agent of the company, with the party to whom the policy has been issued, so as to change the terms of the policy or to dispense with the performance of any part of the consideration, either by paroi or in wilting; and such party is estopped, by.accepting the policy, from setting up powers in the agent, at the time, in opposition to limitations and conditions in the policy, -These limitations are presumed to continue. In the face of a distinct written expression in the policy of a want of powei In the agent, the party suing to recover upon such policy, has no right to infer the subsequent existence of such power by any uncertain signs. There must be evidence to justify the belief that the company, by direct authority, enlarged the powers of the agent, or that they knowingly permitted him to act for them beyond the scope of the powers originally conferred. In that, as in this case, the authority of the agent to receive payment of the renewal premiums was limited by the statement that the payment was not to be valid except upon the presentation of a receipt under the seal of the company. There was evidence in that case of the possession of the receipt by the agent and tending to show that he gave credit for or received the payment of the renewal premium at the day, and the act was held ultra vi/res and not obligatory upon the corporation. See also, to the same effect, Bourton v. American Mutual life Insurance Company (25 Conn., 542).
Unless we are prepared to hold that insurance companies cannot restrict the authority pf their agents and that conditions imposing restrictions and limitations upon their powers, and communicated to those to whom policies are issued, are meaningless and but waste paper and may be utterly disregarded, there was no waiver of the condition in this case and the policy expired upon the failure of the insured to pay at the day. This conclusion renders it unnecessary to consider the very serious question whether, upon the most favorable construction of the evidence, there was any waiver or attempt at a waiver of the conditions.
The judgment must be reversed and a new trial granted.
Folgeb, J.
This is an action on a policy of life insurance. It is resisted on the ground that there was a -failure to pay a premium which fell due before the death of the insured.
It is conceded that the premium was not paid, but it is claimed that payment on the day was waived. This waiver, it was contended, was made by one Weller, an agent of the company.
. I am not prepared to admit that the testimony showed Weller an agent of the company with such power and authority as that he could waive the condition of payment of premium contained in the policy. It is not needful to pass upon that now. But the facts put to the jury, in the charge, as sufficient, as matter of law, to make him a general agent, were not enough for that purpose. The exception to the charge covers that portion of it just noticed.
For the error'in the charge, there should he a reversal ana new trial.