Court Opinion

ID: 3951373
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:13:18.891843+00
Date Added: 2024-06-11T14:17:15.607845
License: Public Domain

It is insisted that the opinion of this court is in conflict with the opinion in Morrison v. Insurance Company, 69 Tex. 353
[69 Tex. 353]; but we think not. In the Morrison case, it was admitted that the agent had authority to grant permission in writing to the insured to obtain further insurance, the only question at issue being the manner in which that permission was evidenced. The policy required that it be in writing indorsed on the policy, and the agent had not done this. While the opinion holds that the verbal permission of the agent would be sufficient to raise an estoppel against the insurance company, still it is reiterated that the basis of the decision is, that the agent had the authority to give the permission to obtain other insurance, and that having this power his act was that of the *Page 403 
company, when it had been acted and relied upon by the insured. In the same case, it is held that insurance contracts do not furnish exceptions to the rule, that "every person having capacity to make a contract, in the absence of fraud, misrepresentation, or concealment, must be held to have known their meaning, and he must also be held to have known and fully comprehended the legal effect of the contract which the words used made."
In the case of Insurance Company v. Lee, 73 Tex. 641, we see nothing that was necessary to the decision that is in conflict with the opinion of this court. As in the Morrison case, the insurer was held to be estopped by a failure to repudiate the action of its agent, which presupposes notice upon the part of the company, because the agent had acted within the scope of his authority. Says the court: "If the act is within the scope of the authority of the agent at the time, it will be binding upon the corporation, without reference to its restrictions contained in the policy." The restrictions referred to must apply to the manner of execution of powers conferred on the agent, as is shown by the quotation from the Morrison case, which immediately follows the above language. In both the Morrison and Lee cases the decisions are predicated upon the proposition that the agent was acting within the scope of his authority, and that in such cases notice to him was notice to his principal. It would be subversive of one of the fundamental principles governing the law of agency to hold, that when notice of the authority conferred upon an agent is given in writing, persons dealing with him could claim notice to the principal through the agent in regard to matters about which it is expressly declared that he shall not have power to act.
The question as to whether notice to the agent is notice to the principal, must depend upon the nature and extent of the agency. Wade on Notice, sec. 674.
The case of Insurance Company v. Josey (Texas Civil Appeals), 25 Southwestern Reporter, 685, at first glance would seem to be in conflict with this principle, but in that case, the point as to a clause in the policy expressly prohibiting the waiver of the clause as to ownership of the property by the agent was not raised.
The motion for rehearing is overruled.
Overruled. *Page 404