Allen v. St. Lawrence County Farmers' Insurance — 68 N.Y. St. Rep. 809

Majority

p. 809

William Henry Allen, App’lt, v. St. Lawrence County Farmers’ Insurance Company, Resp’t.

(Supreme Court, General Term, Third Department,

Filed July 6, 1895.)

Headnote

In súbanos — Fibe—Agent.

Where the only authority of an agent is to solict insurance, and the application informs the applicant, in terms, that the company will not be bound until it is approved by a director and received at the home office, the mere declaration of such agent that the insurance begins at the monent the application is signed, cannot bind the company, where it has no knowledge of the application nor of the risk proposeu.

Appeal from a judgment entered on a nonsuit

Keeler & Russell (John C. Keeler, of counsel), for appl’t; Thomas Sprait, for resp’t.

— The defendant is a co-operative insurance company, organized under chapter 573 of the Laws of 1886. The first section of this act requires that every person insured in any company organized thereunder shall sign a written application for such-insurance “as required by the articles of the association and bylaws of the company, and thereby become a member thereof.” The company, at its annual meeting, in January, 1891, resolved that there should be placed on every application a notice that such application would not be binding on the company until signed by an agent or director, and received bv the secretary at Ggdens

p. 810

burgh. On May 9, 1892, the plaintiff applied to one Crandall, a solicitor for defendant, for insurance on his dwelling house and household furniture, etc., and thereupon, in pursuance of the requirements of the statute and the resolution above cited, signed a written application, containing a statement that the application must be submitted to some director of the company, and approved by him, and the approval signed by him. This application con-' tained also a distinct notice in these words: “Notice: This application will not be binding upon the company until signed by an agent or director, and received by the secretary at Odgenburgh, N. Y.” On signing the application, plaintiff paid the solicitor $1.50; and, upon inquiry as to when his insurance commenced, he was answered, “Now.” The five occurred the same night, before the application had been approved by any director of the ■company, or received by the secretary at Odgenburgb. Of course, no policy was ever issued to the plaintiff; but he now seeks to recover the amount of insurance agreed upon between him and Crandall (the solicitor), on the ground that the answer of Crandall, above quoted, that the insurance began immediately on plaintiff’s signing the application, amounted to an actual insurance by the company.

The application signed by the plaintiff informed him that the company would not be bound until some director or agent of the company had approved it, and it was received at the office in Ogdensburgh. There is no proof that Crandall had any authority to make any other or different agreement than that provided for in the by-laws and requirements of the company. Indeed, there is no proof that he-had any authority to make an agreement whatever for insurance, or to do anything beyond soliciting and receiving applications for insurance. He did not appear to be clothed with authority to contract for the company. He was not provided with policies, and did not deliver any. The plaintiff must have understood that the policies were only issued by the company from its office in Ogdensburgh, and that an insurance was not effected untill his application reached there, and was acted upon. The mere declaration of Crandall that the insurance began at once was ineffectual to bind the company. It was wholly unauthorized, and the plaintiff had no right to accept or rely upon it in the face of the declaration contained in the application that the company would not be bound until the receipt of the application at the office in Odgensburgh. The power of the agent being apparently limited, the plaintiff was bound to inquire concerning the extent of it before trusting to it. Alexander v. Cauldwell, 88 N. Y. 480 . See, especially, page 485. Crandall had only power to receive proposals for insurance. He could not create insurance, nor in any way designate the time when insurance should begin. Bush v. Insurance Co., 68 N. Y. 531 .

The case is quite different from Ellis v. Insurance Co., 50 N. Y. 402 , and kindred cases cited by counsel for plaintiff. In those cases there was an unrestricted right in the agent to issue policies, which to that end were furnished him by the company already signed by its officers, and the agent had authority to effect an im

p. 811

mediate insurance by filling out and delivering a policy already duly executed by the officers of the company. Here the agent, was a mere solicitor for insurance, and wholly unauthorized to contract for the company. The case of Van Loan v. Association, 90 N. Y. 281 , is not applicable. There the company was organized under the act of 1857, as amended in 1858 and 1861. Those acts did not require a written application to be signed by the party seeking insurance, nor was there any notice to the applicant that the insurance would not begin until the application was approved by some authorized agent of the company. The plaintiff applied for insurance to one of the directors of the company. A survey was made, and taken to the secretary of the company, who found it satisfactory, and entered it on the books of the company. The policy was not issued, solely because plaintiff's first name was unknown, though the company was immediately ready to issue it, •and only waiting to learn the full name of the party insured; The action was to compel the company to issue a policy after a fire had occurred. There was an application for a policy, and a clear acceptance thereof, not by an unauthorized agent, but by the company itself. The opinion at general term (approved by the court of appeals) puts the decision expressl}? upon the ground that the company had accepted the application for insurance. In the present case the only authority of Crandall was to solicit insurance •and the application informed the plaintiff, in terms, that the company would not be bound until it was approved by a director, and received at the home office. The mere declaration of an agent having such limited authority that the insurance began at the moment the application was signed cannot bind the company having no knowledge of the application nor of the risk proposed. It cannot be that a party who has not clothed an agent with either a real or seeming authority can be bound by the simple declaration of such agent that it is bound. We therefore think that the learned trial judge was right in granting the' motion for a nonsuit, and this renders it unnecessary to examine the several rulings as to the admission or exclusion of evidence.

The judgment should be affirmed, with costs.

All concur.

Cases cited

Ellis v. Albany City Fire Insurance 50 N. Y. 402 N.Y. 1872-11-26 p. 810