Court Opinion

ID: 7971267
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:55:22.308627+00
Date Added: 2024-06-11T16:34:46.963013
License: Public Domain

START, C. J.
I concur in the result on the ground that it was error for the trial court to admit in evidence the admissions of the state agent. I dissent, however, from so much of the decision of the court as in effect holds that the verdict was not sustained by the evidence. The question is not whether the agent, Little, had implied authority to accept the plaintiff’s promissory notes for the first premium. The question is, did he have apparent or ostensible authority so to do ? The evidence on this question was, in my judgment, such as to make it a question of fact for the jury.
On April 13,1900, the following opinion was filed:
BROWN, J.
In denying respondent’s application for a reargument, we deem it proper to add a word to what is said in the former opinion. As there stated, whether the defendant was bound by the act of Little in taking promissory notes in payment of premiums turned in the court below upon the question whether Little had implied authority to so act. If any other theory of the case was there presented or urged by counsel for plaintiff, the learned trial judge did not refer to it in his charge to the jury. But it is not important whether the plaintiff’s theory be that Little had implied or apparent authority. The law remains the same. A distinction between implied and apparent authority is pointed out in Columbia Mill Co. v. National Bank of Commerce, 52 Minn. 224, 53 N. W. 1061. Although there are features distinguishing, in a degree, implied from apparent au*50thority, it is- not necessary to refer to them here; and, as counsel for respondent now relies upon the contention that Little had apparent or “ostensible” authority, we turn our attention for a moment to examine that question.
To bind a principal for an unauthorized act of Ms agent, on the ground that a long course of dealing and conduct on the part of the agent created or established apparent authority in the agent to do the act sought to be enforced, it must be shown that the principal had notice of such conduct and 'course of dealing, and permitted or acquiesced therein, or that the course of dealing was of such a nature and character as to make it the duty of the principal, as a matter of law, to know of it. If the nature of the business or dealings of the agent be of this latter character*, and the principal by his culpable negligence permits it to continue, he is estopped to deny the authority of the agent. This is illustrated in Columbia Mill Co. v. National Bank of Commerce, supra. But, if it be not of such character, then, to bind the principal on the theory of apparent authority, it must be shown that- he knowingly permitted or sanctioned the conduct and course of dealing. 1 Am. & Eng. Enc. 965, 989, 999, and notes.
Little’s conduct and course of dealing were not of such a character as to make it the duty of defendant to know thereof. The company had expressly forbidden him from taking anything but money in payment of premiums, and the very receipt upon which this action is founded so informed plaintiff. The only question with reference to this branch of the case, therefore, is, did the defendant have actual or constructive notice of such course of dealing? It is beyond controversy that it had no actual notice, and the case narrows down to the question whether notice to the state agent was notice to the company. Our statutes require foreign insurance companies doing business in this state to appoint a state agent, and provide that a company shall be bound by the acts of such agent within his apparent authority. Apparent authority in an agent is such as the principal knowingly permits the agent to assume, or which he holds the agent out as possessing. 1 Am. & Eng. Enc. 989. It is a well-settled rule or principle of law that notice to an agent, to be binding on the principal, must-be of facts within *51the scope of the agency. Pomeroy, in his work on Equity Jurisprudence, states the rule thus:
“Also, in pursuance of the fundamental doctrine of agency concerning the powers of agents, the notice given to or information acquired by the agent, in order to be operative upon the principal, must be within the scope of the agent’s authority to bind the principal. If an agent cannot bind his principal by acts beyond the limits of his authority, a notice beyond those limits is equally nugatory.” 2 Pomeroy, Eq. Jur. § 668.'
The same doctrine is laid down in Sandberg v. Palm, 53 Minn. 252, 54 N. W. 1109. In that case it was held that, because an agent with authority to sell land could not bind his principal by an agreement to permit a third person to erect a building on the principal’s land, notice to him that a building was being erected thereon was not notice to his principal. See also Wharton, Ag. 178; Weisser’s Admrs. v. Denison, 10 N. Y. 68; Brown v. Bankers, 30 Md. 39. The rule is an inseparable part of the law of agency. The statute above referred to does not in any way change or modify-it. It simply provides that the company appointing such an agent shall be bound by his acts within his apparent authority. Unless it can be held, as a matter of law, that it is within the apparent authority of an agent appointed pursuant to this statute to violate his express instructions and go beyond his express authority, notice to the state agent in this case of Little’s conduct did not constitute notice to the defendant company. Authority in an agent to do an act, whether apparent or implied, cannot be derived from a violation of his authority. The state agent had no authority to bind the defendant company by taking promissory notes in payment of premiums, nor had he any authority to authorize Little to do so. . Anything of this kind was not only not within the scope of the agency, but in direct violation of the authority with which he was clothed. We cannot, therefore, hold that notice to the state agent was notice to the company, without violating this fundamental rule of the law of agency.
The case of Godfrey v. New York Life Ins. Co., 70 Minn. 224, 73 N. W. 1, has no application. Counsel for respondent did not cite it in his original brief, — presumably, for the reason that it is not in point. We did not refer to it in our former opinion for the same reason. The decision in that ease was put squarely upon the *52ground, not only that the state agent had notice that a subagent was in the habit of taking promissory notes in payment, of premiums, but that the company itself had notice thereof, and had re- , ceived some of the notes so taken. Whatever may have been the state of the evidence in that case, the decision was distinctly put on those grounds. And unless this court was guilty of an intentional play with words, which we do not believe, the court understood the evidence to establish those facts.
Application denied.