Anchor Life Insurance v. Pease — 66 Barb. 360

Majority

p. 360

The Anchor Life Insurance Company vs. Roger W. Pease.

Headnote

The plaintiff, through C. & B., its agents at S., acting under a written authority, agreed to insure the life of the defendant, for $6,000, and the defendant agreed to pay the plaintiff $284.36,• annually, for ten years, in his fees as a inedical examiner for the plaintiff, at the same time giving his note for $284.36, payable in cash. A policy was thereupon issued by the company. This agreement was made by C. & B. without the knowledge of the other officers of the company. The policy contained a provision that the premiums should be paid in cash, and stated that the president and secretary were alone authorized to make, alter or discharge contracts. In an action upon the note;

Held, 1. That a finding by the referee that the agreement was binding on the plaintiff, on the grounds that C. & B. acted as general agents of the plaintiff at S., and so held themselves out, With the knowledge and consent of the company, and that the defendant had no notice of any limitation of the agents’ authority, was erroneous.

2. That the contract which the agents assumed to make was of an extraordinary character, not shown to have been customary or within the scope of the powers of such agents; and that it could not be presumed to be a customary contract usually made by such agents; especially in the face of the direct provisions to the contrary contained in the policy.

3. That the conclusions of law, of the referee, that the contract was valid and binding upon the parties, which would give effect to both the policy and the note to pay in medical examinations, were erroneous.

4. That both the policy and the note being ineffectual and invalid, for want of power in the agents to make such a contract, a judgment for the defendant was correct, in the absence of any valid'ratification by the principal.

APPEAL by the plaintiff from a judgment for the defendant, entered upon the report of a referee.

Fuller & Vann, for the appellant.

H. C. Leavenworth, for the respondent.

By the Court,

This is an action on a note given by the defendant for a premium on a policy of insurance on his life, issued by the plaintiff. George A. Cantine and one Bliss were agents for the plaintiff, at Syracuse. They had employed the defendant, who is a physician, as an examining physician and surgeon

p. 361

for the plaintiff. The note purports to be payable in cash. The referee, however, finds, upon the evidence, "that the defendant applied to the plaintiff, through its said agents, for an insurance upon his life for the benefit of his wife, for the sum of $5,000, and that the defendant then and there entered into a contract with the plaintiff, - through its agents aforesaid, whereby the plaintiff agreed to insure the life of the defendant for $5,000, and in consideration thereof the defendant agreed to pay the plaintiff the sum of $284.35 annually, for ten years, in his fees as a medical examiner for the plaintiff; and that upon the said agreement the policy was issued. He also finds that the note in suit was made by the defendant upon the same agreement stated in writing by the plaintiff. The fact is,, that the agreement was made by the Syracuse agents without the knowledge of the other officers of the plaintiff. It was proved that the authority conferred upon the agents was in writing; and it was objected that it should be produced, on notice to produce it given. The referee, however, overruled the objection, and the defendant undertook to prove the authority by the parol testimony of Cantine the agent. On his direct examination he testified that he was authorized to employ an examining physician, subject to the approval of the plaintiff. But on his cross-examination he testified that he was not in any way authorized by the plaintiff to make such a contract as the referee has found. The policy, signed by the president and secretary, and which the referee has found was delivered to the defendant simultaneously with the making of the note, contained a provision that the premiums should be paid in cash, and the further provision that the president and secretary are alone authorized to make, alter or discharge contracts.

The referee has found the contract to be valid and binding on the plaintiff, on the ground that Cantine and Bliss acted as general agents of the company at Syra

p. 362

cuse, and so held themselves out, with the knowledge and consent of the company; and upon the ground that the defendant had no notice of any limitation of the’, agents’ authority.

[Fourth Department, General Term, at Buffalo,

January 7, 1873.

In this we think the referee erred. /A party dealing with a general agent has a right to presume, in the absence of any knowledge of his actual powers, that he possesses the ordinary powers of such ah agent. The contract which the agents in this case assumed to make was of an extraordinary character, not shown to have been customary, or within the scope of the powers of such agents, and it cannot be presumed to have been a customary contract usually made by such agents; especially in the face of the direct provisions to the contrary contained in the policy delivered to the defendant as a part of the transaction. The plaintiff has never ratified the contract after a knowledge of its terms, but in fact repudiates it. The judgment for the defendant is therefore correct; as both the policy and the note are ineffectual and invalid for want of power in the agent to make such a contract, in the absence of any valid ratification by the principal. And the conclusions of law by the referee that the contract is valid and binding upon the parties, which would give effect to both the policy and the note to pay in medical examinations, must be reversed.

Accordingly the first, second and third conclusions of law of the referee, are reversed; but the judgment appealed from is affirmed.

Mullin, Talcott and E.