Opinion
May, 1896.
Lyman W. Redington, for respondent.
David Leventritt, for appellant.
Upon the trial the plaintiff was permitted, under objection and exception, to show by parol evidence that at the time of signing her application for the policy in suit the insured communicated the actual facts to the person who solicited and took such application, and that the latter, without the knowledge or fault of the insured, intentionally inserted false answers to the questions propounded in the application blank. It also appeared in evidence that the person who solicited and took such application was, at the time, in the regular employ of the defendant to solicit applications in the furtherance of its business as an insurer. The court denied the defendant's motion for the direction of a verdict in its favor, and directed a verdict for the plaintiff. No request was made to submit any question of fact to the jury; hence it should be assumed, for the purposes of this appeal, that every fact essential to the recovery, and of which there was any evidence, was found to be extant. Kirtz v. Peck, 113 N.Y. 222.
The case was rightfully disposed of in the court below. Nullus commodum capere potest de injuria sua propria. Broom's Leg. Max. (8th Am. ed.) 279.
Upon a former appeal herein (Bernard v. U.L. Ins. Assn., 12 Misc. 10) the late Court of Common Pleas, reversing a judgment for the defendant, ruled (1) that it was within the scope of the apparent authority of the defendant's agent to fill up the application blank for the signature of the insured and delivery to his principal; (2) that, the facts having been truthfully communicated to such agent by the insured, at the time the latter's application was taken, the defendant was precluded from avoiding its liability under the policy subsequently issued upon the claim of a breach of the insured's warranty of the truth of answers which were perverted by the agent without collusion or knowledge on the part of the insured; and (3) that, notwithstanding a stipulation on the part of the insured, contained in the application, in effect to regard the person soliciting and taking the application as her agent, such person, acting, at the time, under general authority from the defendant, continued to be its agent, and that his acts and knowledge were imputable to it.
The first and second of the propositions involved in the ruling just alluded to are in strict accord with the rulings of the highest appellate court. Rowley v. Empire F. Ins. Co., 4 Abb. Ct. App. 131; 36 N.Y. 550; Pitney v. Glens Falls Ins. Co., 65 id. 6, 23; Plumb v. Cattaraugus Co. M. Ins. Co., 18 id. 392; Baker v. Home L. Ins. Co., 78 id. 569; Miller v. Phoenix M.L. Ins. Co., 107 id. 292; O'Brien v. Home Benefit Society, 117 id. 310. See, also, Browne on Parol Ev., 106, § 48, and cases there collated. The third is vigorously assailed upon this appeal by the able and courteous counsel for the defendant, as in conflict with the rulings in the cases cited by him. N.Y. Life Ins. Co. v. Fletcher, 117 U.S. 59; Ryan v. World Mut. L. Ins. Co., 41 Conn. 168; Rohrbach v. Germania Fire Ins. Co., 62 N.Y. 47; Alexander v. Same, 66 id. 464, Whited v. Same, 76 id. 415; Allen v. Same, 123 id. 15. To such last-mentioned cases one other might have been added. Hermann v. Niagara F. Ins. Co., 100 N.Y. 411.
Neither in the Fletcher nor in the Ryan case was a stipulation, such as the one under review, before the court. In each of such cases the agency of the solicitor for the insured was unchallenged, the decision, adversely to the person claiming under the policy, being predicated of matter in the insurance contract which unequivocally conveyed notice to the insured of such solicitor's restricted authority as the agent of the insurer. Baumgartel v. P.W. Ins. Co., 136 N.Y. 547; Frankfurter v. Home Ins. Co., 10 Misc. 157. Obviously, therefore, if such was not the purport of the stipulation in the case at bar, neither the Fletcher nor the Ryan case is pertinent to the question under discussion.
In the Rohrbach case, it was assumed, without argument, that the stipulation comprehended an agent acting in the solicitation and taking of the application for insurance under direct authority from the insurer, and, so far as the report shows, no question was presented to the court with regard to the propriety or reasonableness of such an interpretation of the stipulation. The Alexander case cites the Rohrbach case, also, without discussing any question of interpretation, and, indeed, the decision was independent of any such question, since it was there held that no recovery could be had, under the policy, whether the solicitor was the agent of the insurer or the insured, the court distinguishing the case then before it from those cases wherein it appeared that the breach of warranty was occasioned by the act of such agent (Rowley v. Empire F. Ins. Co., supra), of which last-mentioned class of cases the case at bar affords an illustration. In the Whited case, again, the decision did not proceed from any interpretation of the stipulation. It there appeared that, subsequent to the stipulation, the insurer, by its course of business, had invested the agent with apparent authority to act for it, upon which apparent authority the insured had relied, and the court held that, assuming the stipulation to be operative upon an agent of the insurer, in the matter of soliciting and taking the application for insurance, the insurer was not thereby disabled from afterward clothing such agent with authority to act for it. The meaning of the stipulation was, therefore, immaterial to the point upon which the case was decided. In the Allen case, the solicitor appeared to have been a mere insurance broker, the court explicitly predicating its decision of the absence of all authority upon his part to represent the insurer and what was said in the Hermann case with regard to the comprehensiveness of the stipulation was clearly obiter dictum.
Thus we may regard the question of the proper meaning of the stipulation in the case at bar as still an open one in this state.
If it is remembered that a corporation cannot act except by its agents, the stipulation under review, when urged in avoidance of the insurer's obligation, under circumstances such as are here presented, is so palpably an instrument of duplicity and oppression at command of the insurer that, with due regard for the law's repugnance to the imputation of a fraudulent intention upon mere surmise or conjecture, it cannot reasonably be said that the defendant, when it exacted the stipulation from the insured, meant to visit upon her, if she were without fault, the consequences attending the want of integrity in a representative of its own selection, or that, in thus stipulating, the insured, who could not treat with the defendant otherwise than through some agent appointed by it, so understood the stipulation, and thereby meant to assume responsibility for such agent's misconduct in the defendant's business. Suppose, for the moment, that the insured, while casually at the insurer's office or place of business, was solicited by an executive officer of the corporation to cause her life to be insured, and had signed an application prepared by such officer and containing the same stipulation. Would it be said that by such stipulation either party to the insurance contract intended to cast upon the insured any responsibility for such officer's misconduct in the preparation of the application for the insured's signature? And if not, why not? The officer in the case assumed was no more than an agent employed in the furtherance of his company's business.
An interpretation such as the defendant contends for upon this appeal, it seems to us, can derive support only from an inference that the insurer, by means of the stipulation, intended not only to enable itself to disregard integrity as an essential attribute of its representatives, and with the utmost impunity to employ unscrupulous persons in the furtherance of its own interests, but, also, to arm itself with a furtive method whereby it might retain and enjoy, without risk of any kind, the fruits of its agents' iniquities in the course of their employment. In fairness to the defendant we should not say that such was its intention, if another interpretation of the stipulation is reasonable, and it is questionable that the defendant could lawfully contract in advance for immunity from its agents' frauds.
Accordingly, when the question of the proper meaning of the stipulation under review was presented, the courts have held its reasonable interpretation to exclude from the operation of its provisions those who, at the time of soliciting and taking the application for insurance were acting within the scope of authority previously conferred by the insurer, and whose duties, therefore, were incompatible with the duties resulting from an agency for the insured. 11 Am. Eng. Ency. of Law, 334; 20 Lawyer's R. Ann. 277, note; Kister v. Lebanon M. Ins. Co., 5 Lawyer's R. Ann. 646; 15 Am. St. Rep. 696; Eilenberger v. Protective M. Fire Ins. Co., 89 Pa. 464; Columbia Ins. Co. v. Cooper, 50 id. 331; Nassauer v. Susquehanna Mut. Ins. Co., 109 id. 507 (where the stipulation was stigmatized as a "dishonest" condition, and as "no part of the contract of insurance"); Kausal v. Minn. F. Mut. F. Ins. Asso., 31 Minn. 17; 47 Am. Rep. 776; Planters' Ins. Co. v. Myers, 55 Miss. 479; 30 Am. Rep. 521; Commercial Ins. Co. v. Ives, 56 Ill. 402; Indiana Ins. Co. v. Hartwell, 123 Ind. 177; Gans v. St. Paul F. M. Ins. Co., 43 Wis. 108; 28 Am. Rep. 535; Continental Ins. Co. of N.Y. v. Pearce, 39 Kan. 396; Alexander v. Germania F. Ins. Co., 2 Hun, 655; Susquehanna Mut. F. Ins. Co. v. Cusick, 109 Pa. 157; Sullivan v. Phoenix Ins. Co. of Brooklyn, 34 Kan. 170; Boetcher v. Hawkeye Ins. Co., 47 Iowa 253; Clark v. Union Mut. F. Ins. Co., 40 N.H. 333; 77 Am. Dec. 721; Masters v. Madison, etc., Ins. Co., 11 Barb. 624; Bushaw v. Women's M. Ins. Acc. Co., 28 N.Y.S.t. Repr. 524. With such interpretation we concur.
Moreover, where there is uncertainty as to the exact meaning of words used in an insurance policy, the courts must adopt that interpretation which favors the insured and tends to support the policy. Rickerson v. Hartford F. Ins. Co., 149 N.Y. 307.
The material facts upon this appeal in no wise differ from the facts upon the former. Upon the opinion of the Court of Common Pleas, therefore, as well as for the reasons hereinbefore stated, the judgment of the Trial and General Terms of the court below should be affirmed, with costs.
McADAM, J., concurs
The value of such a stipulation as that contained in the policy, by which an agent of the company, acting throughout within the scope of his authority, is nevertheless by a stipulation in the agreement between the company and its customer declared to be the agent of the latter, has been lately discussed by the Supreme Court of this State. Will v. Postal Tel. C. Co., 3 A.D. 22. That was a case of a telegraphic message, sent to the plaintiffs from the office of the company by one of its messengers, with instructions to wait for an answer. The answer was intrusted to the messenger, who failed to deliver it at the office promptly. The blank on which it was written contained a condition to the effect that, whenever a message was sent to its office by one of its messengers, the messenger should be deemed the agent of the sender; and the company sought to avoid responsibility for his negligence on that ground. But the court held that the company could not thus exempt itself from the consequences of the gross negligence in the use of an instrumentality which itself had furnished. This wholesome doctrine can be readily applied to the case of an insurance company which employs agents to solicit insurance, and yet seeks to shield itself from the misconduct of such persons by incorporating in the application for insurance a stipulation that he shall be deemed the agent of the insured.
In the Will case the liability of the company was put upon the additional ground that the messenger was undoubtedly the agent of the company, because directed by it to ask and wait for the answer and receive it, and that defendant, in so doing, ignored and waived the rule of which it sought to avail itself. The reason applies as well to the case of an insurance agent authorized by the company to receive applications, and in so doing acting in accordance with his authority.
Judgment affirmed, with costs.