Court Opinion

ID: 8023973
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:28:56.500994+00
Date Added: 2024-06-11T16:36:46.068705
License: Public Domain

MR. CHIEF JUSTICE CALLAWAY
delivered the opinion of the court.
In May, 1918, Merrill J. Babcock borrowed from plaintiff the sum of $1,600. To secure payment of this sum Babcock executed to plaintiff a note and mortgage due. December 1, 1923, the mortgage containing a clause whereby the mortgagor agreed to keep the building upon the land mortgaged insured against loss or damage by fire, the policy to be made payable to the plaintiff in case of loss. The plaintiff negotiated the loan to Babcock through A. C. Farmer at Miles City, and ever after Farmer acted as the correspondent of the plaintiff at Miles City for the purpose of collecting and remitting the interest on plaintiff’s loans in that vicinity. In compliance with the requirements of the mortgage respecting the insurance, Babcock in June, 1918, obtained insurance upon the building to the amount of $500 from the defendant. The insurance was written by Farmer who, in the language of the agreed statement of facts, “during all the times mentioned in the pleadings was and now is the agent of the defendant company at Miles City, Montana.” The insurance policy contained what is known as the “union mortgage clause.” As a part of this clause it was provided: “That the mortgagee shall notify this company of any change of ownership or occupancy or increase of hazard which shall come to the knowledge of said mortgagee and, unless permitted by this policy, it shall be noted thereon and the mortgagee shall, on demand, pay the premium for such increased hazard for the term of the use thereof; otherwise this policy shall be null and void.”
In August, 1919, Babcock sold the insured premises to Roy Kimpton. The plaintiff first had notice of the sale by Babcock to Kimpton “when it was so informed by letter from A. C. Farmer, the defendant’s agent at Miles City, dated October 27, 1919, addressed to plaintiff at its Great Falls office. * * * ” “Neither the plaintiff company nor the said A. C. Farmer ever directly notified the defendant company of the said change of ownership or occupancy of said *590property.” The quoted language is from the agreed statement of facts. The house was destroyed by fire on March 18, 1921, but the plaintiff did not learn of the loss until June 13, 1921. The “defendant first had notice of the said fire loss when A. C. Farmer, its agent at Miles City, was informed thereof by said Roy Kimpton about May 16, 1921.”
The principal indebtedness secured by the mortgage being wholly unpaid plaintiff demanded of the defendant payment of the $500 for which the building was insured, but the defendant refused to pay the same. Plaintiff then brought this suit. Defendant answered and plaintiff replied. Upon the admissions in the pleadings and an agreed statement of facts the cause was submitted to the lower court which entered judgment for the plaintiff and from which the defendant has appealed.
Defendant insists that it should not be held liable for the reason that, contrary to the requirements of the provisions of the insurance policy above quoted, the plaintiff having obtained knowledge of the sale by Babcock to Kimpton failed to notify defendant of the fact. It is not claimed that the sale of the property by Babcock to Kimpton increased defendant’s risk in any way, nor that defendant was prejudiced in any manner by plaintiff’s failure to give it notice of the sale.
It is admitted that plaintiff received its knowledge from  defendant’s agent, and to avoid this embarrassment defendant’s counsel say the rule that the knowledge of the agent is the knowledge of the principal is subject to the condition that the knowledge must be gained by the agent while acting for the principal, and not when he is acting for himself or for someone else upon business having no relation to the business of the principal, citing 3' Cooley’s Briefs on Insurance, 1540.
The stipulation in the record that Farmer was the agent of the defendant is not restricted by any statement showing limitation of his authority. By section 7930, Revised Codes of 1921, it is provided: “An agent for a particular act or trans*591action is called a special agent. All others are general agents.” Therefore, in the absence of a showing to the contrary, and there is none, it must be held that Farmer was the general agent of the company, which implies that he was an agent having exclusive charge and control of his principal’s interests at Miles City and in the region tributary thereto; thus he stood in the position of a vice principal. (Careve v. Phoenix Ins. Co., 67 Mont. 236, 215 Pac. 235.)
The rule that knowledge gained by an agent of an insurance company as to matters within the general scope of his authority is imputable to the company does not require the citation of authority. But see 3 Cooley’s Briefs on Insurance, 2520 (c), and 2520-21 Supplement, vol. 7, and cases cited. Examining the policy we see that it does not specify how or to whom notice of a change of ownership shall be given. The provision is “the mortgagee shall notify this company,” etc. If plaintiff, having obtained information of the sale from any source, had then given notice of the fact to Farmer, the defendant’s general agent, the defendant unquestionably would have been bound. (Joyce on Insurance, sec. 515a; Powell v. Continental Ins. Co., 97 S. C. 375, 81 S. E. 654; Cooley’s Briefs on Insurance, 2520(b).)
Upon the record it makes no difference as to how the defendant’s general agent came into possession of knowledge respecting the sale. For aught that appears he may have learned of it while in the actual pursuit of the defendant’s business. But, however that may be, this agent had written the policy and knew its contents. He was familiar with the provision respecting a change of ownership of the property insured. He came into possession of information showing that Babcock had sold the property. This fact had relation to the subject matter of his agency. Based upon the foregoing postulate it must be held that the knowledge of a general agent, concerning whose authority no limitation is shown, is the knowledge of his principal. Under the conditions foregoing, when defendant’s agent informed plaintiff of the sale *592it would have been a useless act for plaintiff; then . to have given defendant notice. of that 'fact which plaintiff had just received from the defendant. The law neither does nor requires idle acts. (Sec. 8761, Rev. Codes 1921.)
Upon the record the district court could not have decided the cause correctly otherwise than it did. The judgment is affirmed.

Affirmed.

Associate Justices Cooper, Holloway, Galen and Stark concur.