Miller v. Brooklyn Life Insurance Company/Opinion of the Court

ERROR to the Circuit Court for the District of Maryland; the suit being one by Mrs. H. Miller against the Brooklyn Life Insurance Company to recover $5000, insured by her husband, Walter Miller, for her benefit, on his own life.

The evidence proved, or tended to prove, the following case: The insurance company-a stock company, not a mutual one-being desirous of taking risks in St. Louis, appointed Dutcher & Fasset their general agents for that place, and gave to them, as they did to all their general agents, a printed book, showing to them their powers as agents, and containing the instructions under which the company meant that they should act. The book contained these passages:

INSTRUCTIONS TO AGENTS.

Agents must not deliver policies until the whole premiums are paid, as the same will stand charged to their accounts until the premiums are received, or the policies returned to the office.

POWERS OF AGENTS.

Agents are not authorized to make, alter, or discharge contracts, waive forfeitures, name an extra rate for special risks, or bind the company in any way; their duties being simply to obtain applications for insurance, to collect and transmit premiums, and, generally, to be the medium of communication between the policy-holder and the company.

Agents are not authorized to write the receipt of premium, or make any indorsement whatever on the policy. The president or secretary are alone authorized to sign receipts for premiums on the part of the company. When a receipt is delivered to a policy-holder by an agent, such agent must countersign the same as an evidence of payment to him.

The said Dutcher & Fasset being thus established as the recognized general agents of the company, Walter Miller, the husband, then of St. Louis, applied, in that place, June 19th, 1868, for a contract of insurance for his wife's benefit, to Dutcher & Fasset, general agents of the insurance company in the State of Missouri. The application, a printed form in part, was headed:

Statement required from persons proposing to effect assurance in this company, and which forms the basis of the contract.

It was stated in this paper that the assured wished to pay partly by note and partly in cash. And at the close of it these words occur:

'It is agreed by the undersigned. . . that the policy of assurance hereby applied for shall not be binding upon this company until the amount of premium as stated therein shall have been received by said company, or some authorized agent thereof, during the lifetime of the party therein assured.'

At the time of the application, the deceased having ascertained from Dutcher what was the amount of the cash portion of the premium, and what the portion to be embraced in notes, said to him:

'Send the policy to me, with the notes, and call on Solomon Scott for the cash part. He has just promised me that he will pay it.'

This Scott had been a partner in business and was a particular friend of Miller's.

The application was forwarded by the agents to the home office in New York, and in the course of a week the policy was received by Dutcher & Fasset. Miller in the meantime had gone to Maryland.

The policy, dated June 21st, 1868, and the premium notes for him to sign, were mailed to him, in a note dated July 2d, 1868, in which the agents said:

'You will find inclosed the yearly note and the six months' note, both of which you will please to sign and return us by mail. The cash payment we will get of Scott when the time arrives.'

It was stated in the policy that it was made—

'In consideration of the representations and agreement contained in the application therefor, and of the sum of $254.85 to them in hand paid, and of the annual premium of $254.85, to be paid on or before the 21st of June in each year during the continuance of this policy.'

And it was provided in it, among other things, that in case the assured

'Should not pay or cause to be paid the premium as aforesaid, on or before the day herein mentioned for the payment thereof, or any note or notes which may be given to and received by said company in part payment of any premium, &c. . . . then this policy shall cease, and be null, void, and of no effect.'

On the margin of the policy were these words:

'Agents are not authorized or permitted to waive, alter, or change any of the provisions of this policy.'

Miller signed the notes sent to him in the letter of Dutcher & Fasset, and returned them, but said nothing about the cash premium. In their letter to Miller, inclosing the policy, Dutcher & Fasset sent a receipt in this form, partly printed, and apparently as to that part a form with which the insurance company furnished all their agents:

RECEIPT.

141 Broadway, New York.

Walter Miller—June 21st, 1868—Policy No. 4447—Life—Amount of $5000—Amount of Premium, $254.85.

NOTE. CASH.

One-third loan note,  $101 94   Two-thirds cash,  $76

Cash note,      76 45 Interest on loan note,  7

---   "      " cash note,    2

$178 39    --

Received payment,

DUTCHER & FASSET,

Agents.

July 1st, 1868.

N. B. Agents MUST NOT DELIVER policies until premium is received, as no policy is IN FORCE until PAID for.

Dutcher & Fasset, as the evidence went strongly to show, frequently gave credit for the cash payment in the case of persons whom they knew would pay when called on, and in this case they sent the receipt, because, as one of them testified, they had 'confidence that they could get the money at any time they called for it.'

As it turned out, however, Dutcher & Fasset did not get the money payment from Scott, although it was a fact that Scott had promised to pay it, and there was no allegation anywhere of fraud.

The following correspondence now took place.

ST. LOUIS, July 23d, 1868.

WALTER MILLER, ESQ.,

Reese's Corner, Maryland.

DEAR SIR: The last of the month we make our report according to custom, and last evening, going home, I (the writer) called in the store and found our friend Scott intending to start East on Monday. I suggested to him that he should pay your cash part of premium as you suggested to me, but he would not listen to it at all; so we depend on you for it, the amount being $86.26, made up as follows:

"   " six months' note,......... 2