Case Name: Krumm v. Jefferson Fire Insurance Company
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1883-01
Citations: 40 Ohio St. 225
Docket Number: 
Parties: Krumm v. Jefferson Fire Insurance Company.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 40
Pages: 225–231

Head Matter:
Krumm v. Jefferson Fire Insurance Company.
1. The agent of an insurance company, who had full power in a large territory to receive proposals for insurance against loss by fire, to fix rates of premium, to receive moneys, to countersign, issue, renew and consent to the transfer of policies of insurance, signed by the president of the company and attested by the secretary, does not exceed his authority in appointing a sub-agent authorized to solicit and receive applications, fix rates of premiums and forward the applications, on which, if approved, he, the appointing agent, is to issue policies, insuring against loss from the date named in the application. .
2. The person so appointed is the agent of the company for these purposes, and his acts in this capacity are the acts of the company.
3. Where an application has been made to such sub-agent and such application has been sent to the office of the agent authorized to issue the policy, the company is liable for a loss occurring before the issuing of the policy and after the date named in the application for the commencement of the risk.
Error to the District Court of Peny County.
About the first of April, 1874, the Jefferson Fire Insurance Company of Steubenville, Ohio, commissioned Charles H. Towson of Lancaster, Ohio, as its agent. By the terms of the commission, he was clothed “ with full power to receive proposals for insurance against loss and damage by fire in Lancaster, and its vicinity, to fix rates of premium, to receive moneys, to countersign, issue, renew and consent to the transfer of policies of insurance, signed by the president and attested by the secretary of the said Jefferson Fire Insurance Company, subject to the rules and regulations of •said company and to such instructions, as may from time to ■ time be given by its officers.”
From that time until after December 6th, 1876, Towson • continued to act as the agent of the Jefferson Fire Insurance Copipany at Lancaster, and during that time exercised all the powers herein spoken of. Soon after receiving his commission, Towson appointed Elias Gray as a sub-agent in Fairfield county, Freeman Daugherty in Licking county and Tim. Thompson in Peiry county. Towson furnished these men with blank applications for insurance in the Jefferson Fire Insurance Company, which had been printed by the company and were used by it in its business of 'insurance. Thej^ were authorized 'by Towson to solicit insurance for the Jefferson Fire Insurance Company, to .receive applications, to fix rates of premium, to receive moneys and to forward the applications to him at Lancaster. Sometimes these agents extended the time for the payment ’of premiums, thirty aud sixty dajm. Upon the applications being received at Lancaster, Towson filled out policies of •insurance, signed in blank by the president and secretary of the Jefferson Fire Insurance Company, and countersigned by himself as agent, and forwarded them to the solicitors to be delivered. In the case of Tim. Thompson, 'his name would sometimes be placed upon the applications and Towson would indorse his ñamé upon the policies issued on such applications. It frequently happened that Towson was absent from his office days at a time, and during such periods his clerk, a sister, upon the receipt of applications, would fill up and issue policies, signed by the president, attested by the secretary and counter-signed by Towson the agent, which had been left with her for that purpose by Towson. Whenever policies were issued they were at once reported to the company at Steubenville, in ivhat was termed the daily report. During this period, two years and eight' months, Towson was sometimes visited at his office in Lancaster by McCracken, the secretary of the company, and by Cussy and Scott, its general agents. Upon such visits, these officers of the company talked with Tow-son in regard to the business of the company.
On tlie first of December, 1876, Mrs. Cornelia Z. Krumm was the owner of furniture and other household goods in Shawnee, Perry county. During the afternoon of that day, Tim. Thompson called upon F.-Krumm, the husband and agent of Mrs. Krumm, for the purpose-of writing an application for insurance upon said goods in the Jefferson Fire Insurance Company. After some talk between Thompson and Krumm, Thompson filled up the application, and Krumm, as he was authorized to do, signed the name of his wife thereto. The amount of insurance agreed upon was $600, the amount of premium $10.50, and the length of time 12 months from December 2, 1876. All of this was set forth in the application. Thompson gave 60 days credit upon the premium. These goods were used by Mrs. Krumm in housekeeping upon the' upper floor of a two-story frame building in Shawnee. The lower story was occupied by Mrs. Krumm as a store, and the goods in this store had been previously insured in this company, to the extent of $1,000, in the same manner and through the same agencies as the insurance under consideration was attempted to be made. Thompson says that when he first met Krumm, he had his overcoat on, about to start for Columbus, and that he, Thompson, was anxious to get the application, as he knew that if he did not, Krumm would get the insurance in Columbus. The application was at once forwarded by mail to Towson, at Lancaster, and was duly repeived by his clerk, Towson being absent. The clerk states that she had blank policies, countersigned by Towson, and that her reason for not at once writing a policy upon the Krumm application, was that there were other applications received before this and it was laid away to await its turn. On the morning of the 5th’of December she was about to write the policy, when a telegram was received from Krumm announcing that the property had been destroyed by fire. The fire occurred early in the morning of December 5. She did not write the policy. Towson did not return until several days after the fire. The company refused to issue the policy and contend that they are not liable in the premises.
In the prayer of her petition, Mrs. Krumm asked judgment against the company, that the contract be specifically performed; that said company be ordered to issue to her a policy of insurance under said agreement and for any other relief to which she was entitled. The court of common pleas and the district court, upon appeal, rendered judgment for the defendant.
Butler Huffman, for plaintiff in error.
A general agent has authority to appoint sub-agents and clerks, either or both, and the acts of such sub-agents and clerks, while effecting and perfecting insurance, are binding upon the company.
May on Ins., 126, 158, 159; 40 Barb., 292; 43 Id., 351; Ins. Co. v. Bshelman, 80 Ohio St., 657; Wood on Ins., 656-662; Id., 634; Perkins v. Ins. Co., 4 Cow., 645; 19 How. (U. S.), 318; May on Ins., 136; 9 How., 390; 25 Barb., 189; 3 Am. Rep., 301; 44 N. Y., 538; 59 Id., 171; 25 Am. Rep., 93; 24 Ohio St., 345; 20 Ohio, 530.
Perguson $ Noon, for defendant in error.
This application, never acted upon by the company, and subject to withdrawal by the applicant, .was a mere proposition on the part of the plaintiff, and in no sense a contract.
May on Insurance, 139; Bentley v. Columbia Insurance Company, 17 N. Y., 421; see also Insurance Company v. Johnson, 23 Penn. St., 72, and Myers v. Keystone Mutual Life Insurance Company, 27 Penn. St., 268; Wood on Insurance, pp. 38, 39.
An agent has no authority to delegate his power. 1 Parsons on Contracts (6th ed.), 82, 44; Sheldon Corp., 221, 222, 223; 2 Kent’s Com., 879.

Opinion:
Nash, J.
It is contended by the defendant in error that Thompson, who solicited from Mrs. Krumm's agent the application of insurance, who wrote up the application, who fixed the amount of the premium and who extended the time.of its payment for sixty days, was not the agent of the Jefferson Eire Insurance Company and acted without its authority. Towson was its acknowledged agent, and from the facts it appears that he was fully authorized to receive proposals for insurance, to fix rates of premium, to receive .moneys, to countersign, issue, renew and consent to the transfer of policies of insurance, signed by the president of the company and attested by the secretary. In the business of issuing policies of insurance against loss by fire, this company delegated to Towson all the powers possessed by it, to be exercised in Lancaster and its vicinity. The extent of the territoiy in which Towson was to exercise his powers, is evident from what was done by him during the two years and eight months he acted as agent of the company, prior to the happening of the things complained of by the plaintiff in error. During all this time, with the knowledge of the officers of the company, he had received applications for insurance upon property situated in Fairfield, Perry and Licking counties, and issued the policies of the company thereon. By the acquiescence of the company and its officers in the acts of Towson, he was authorized to act as their agent in the three counties named.
It is evident that in this large extent of territory, Towson could not secure for the company its fair proportion of the business of insurance without the aid of solicitors or sub-agents. The interests of the large business committed to his care, required the assistance of sub-agents. He did not exceed his authority in appointing a sub-agent in each of the counties of Fairfield, Licking and Perry to solicit applications for insurance in the Jefferson Fire Insurance Company, to fix the rates of premium, to receive the premiums and to forward the applications to him at Lancaster. Such appointees would be the agents of the company even if its officers had no actual knowledge of their appointment. The officers of this company must have possessed extraordinary obtuseness if they did not know, long before Mrs. Krumm made application for the insurance of her household goods, just how its business was conducted by Towson. His daily reports made for two years and a half, and the visits of the secretary and two general agents to his office, must have given the officers of this company full information as to how their business was conducted.
The rules laid down by the Supreme court in the case of Palm, Adm., v. The Medina Co. Fire Insurance Company, 20 Ohio, 529, are applicable to and control in this ease. Towson possessed the same powers in regard to applications and in regard to issuing policies upon them as were reserved to the home office of the Medina County Fire Insurance Company. Thompson, the sub-agent in Perry county, was clothed with about the same authority as the Medina company gave to its agent, McConnell. In that case it was held that upon an application for insurance made to the agent and by the agent forwarded to the home office the company was liable, although the loss occurred before the arrival of the letter containing the application.
The fact that the premium was not paid by Krumm at the time the application was made, is urged as a reason why the claim of the plaintiff in error is not established. Thompson gave her a credit of sixty days, and at the proper time she tendered to the agents of the company the amount of the premium, and has ever since kept the tender good. On previous insurance effected in this companjr by Mrs. Krumm, the agents of the company had given the same time in which to pay the premium ; she had no notice that the company disapproved such action,and it seems to have been the custom of the agents to grant this extension to their customers. The company is now estopped from setting up the non-payment of the premium as a defense.
It is said that a rule of the company provided that no more than $1,500 of insurance could be placed upon goods situated in one building, and that the amount of the risk named in this application, when placed with that of the previous policy issued to Mrs. Krumm, would make the total risk upon the goods in one building $1,600. This was a rule'made by the company for the government of its officers and agents, but it was not made known to Mrs. Krunam. It does not excuse the company from liability under the circumstances of this case.
Judgment of district court reversed.