Court Opinion

ID: 6414181
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:54:54.980866+00
Date Added: 2024-06-11T15:51:28.842953
License: Public Domain

Bigelow, C. J.
The premises covered by the policy declared on were insured as occupied premises, and it was expressly stipulated in the body of the policy that, in all cases in which premises are so insured, “ the policy becomes void when the occupant personally vacates the premises, unless immediate notice be given to this company, and additional premium paid.” Under this clause, it is clear that the contract of insurance had terminated several weeks prior to the occurrence of the loss by fire. The notice to the agent that the plaintiff’s tenants had eft the premises, and that the premises were vacant, did not fulfil the stipulation in the policy. The agent had no power or authority to receive such notice in behalf of the company. He *233was a special agent only, with strictly limited power. He could not issue a valid policy, or enter into contracts generally in behalf of the defendants. He was authorized only to receive and forward applications for insurance to the company, to collect premiums and to bind the company on special hazards fa; the term of ten days. Beyond this his authority as agent did not extend. He could not receive any notice which would affect the rights of this company under a policy already issued, nor had he any authority to fix an additional premium in consideration of a change in an existing risk, which, by the terms of the policy, the parties had agreed should be deemed an increase of the hazard which the company originally assumed.
It is no answer to say that the plaintiff had no knowledge of the limited extent of the agent’s authority. This he was bound to ascertain before dealing with him as agent. No rule of law is more familiar or better settled than that which requires a person who transacts business with a special agent to take notice of the nature and scope of the agent’s power. He is put on inquiry by the very fact that he is negotiating with an agent, and is bound to ascertain whether he can bind his principal in the transaction which he purports to carry on in his behalf. If it were not so, there would be no distinction between a special and a general agent, and all restrictions and- limitations on an agent’s authority would be nugatory. A principal would in all cases be at the mercy of his agent, however carefully and strictly he might have restricted his authority. Lobdell v. Baker, 1 Met. 201. Snow v. Perry, 9 Pick. 542. Story on Agency, § 133.
The St. of 1861, c. 170, relating to agents of insurance companies has no application to a case like the present. That enactment was not designed to change in any way the rules of the common law regulating the power of agents or their authority to bind their principals, but only to declare that certain classes of persons should be deemed to be so far agents of insurance companies as to be liable to the penalty prescribed by Gen. Sts. c. 58 § 77. Exceptions overruled.