
    Tomsecek and another, by guardian ad litem, Respondents, vs. The Travelers' Insurance Company, Appellant.
    
      January 11 —
    January 28, 1902.
    
    
      Life insurance: Payment of first premium: Agency: Implied, authority: Waiver.
    
    
      A life insurance policy provided that it should not take effect unless the first premium was paid while the insured was in good health. The insurer’s agent agreed to accept goods from the insured’s meat market in. payment of tke first premium. Insured died kefore any suck goods were delivered to tke agent. Held, tkat tke agent kad no implied.' autkority to make suck an agreement and tkat tke delivery of tke policy pursuant tkereto did not constitute a waiver of payment of tke first premium, or tke otker conditions of tke policy.
    Appeal from a judgment of tbe circuit court for Crawford county: Geo. ClemeNtsoN, Circuit Judge.
    
      Reversed.
    
    Appeal from a judgment in favor of plaintiffs on an insurance policy, rendered in tbe circuit court for Crawford county. Tbe defense, in tbe main, was noncompliance witb tbe following condition of the insurance contract:
    “All premiums are payable at tbe borne office in Hartford, Connecticut, but will be accepted if paid to an agent in exchange for a receipt signed by its president or secretary and countersigned by tbe agent designated tbereon. Tbis policy shall not take effect unless tbe first premium is paid while the insured is in good health.”
    Tbe evidence was to tbe following effect: Maurice M. En-right and Vincent J. Tomsecek were copartners in tbe busi-mess of running a meat market at tbe time tbe policy was is.sued, for a considerable time theretofore, and thereafter till tbe latter died. By the consent of Enright, Tomsecek and one Webb, agent for tbe defendant company, agreed that Tomsecek should take out a policy of life insurance in such ■company, paying the first premium by giving such agent credit on account at the meat market, as payment for meat furnished and to be furnished, to tbe extent thereof. An application was accordingly made to the company in due form, no mention being made of tbe agreement aforesaid. The application was accepted and a policy containing tbe condition "before mentioned was forwarded to tbe agent for delivery, who sent it to Tomsecek by mail, not knowing that tbe latter was ill. Tomsecek was then in a hospital, too ill to do business. Tbe policy was received at tbe place of business of Enright & Tomsecek, but was never brought to tbe latter’s knowledge. It remained -under seal as taken from the post-office till after he died. That occurred soon after the policy was received. No credit for the first payment on the policy was ever given to the agent as agreed upon, nor was such premium ever paid in any way. There was evidence to the effect that there was an understanding between the agent and Tomsecek that the latter should have an opportunity of examining the policy before deciding whether to accept it or not. The court excluded all evidence as to whether the agent had authority to accept anything in payment of the first premium upon the policy except money, upon the theory 'that the controversy in that regard was to be solved solely by the writings. ■ It was in effect admitted by plaintiffs’ counsel on the trial that no payment was made on the policy in money or otherwise, unless the agreement in regard to payment being made by credit to the agent at the meat market operated as payment. The circuit judge stated in the course of the trial, without dissent by plaintiffs’ counsel, that he so understood the evidence and their position.
    The. jury found specially as follows: It was agreed be-hetween Tomsecek and Webb, defendant’s agent, that the former should take out a policy in said company and that the first premium thereon should he paid by applying what was then due and what might become due from said agent to the firm of Enright & Tomsecek thereafter for meat, etc., furnished by them to him. The policy- was mailed to Tom-secek in fulfillment of said agreement. It was not agreed between the agent and Tomsecek that the policy should not be in force until Tomsecek had an opportunity, after it was written up, to examine and accept it.
    Thereafter the jury, by direction of the court, rendered a general verdict in favor of plaintiffs for the face of the policy less $22 to cover the first premium and interest upon the balance, making $1,153. Defendant’s counsel moved for judgment on the special verdict. The motion was denied and due exception taken to tbe ruling. Sucb counsel then moved tbe court for an order setting tbe special verdict and .the general verdict also aside, and for judgment on tbe undisputed evidence or for a new trial, wbicb motion was denied and tbe ruling duly except^, to. Judgment was then, on motion, rendered upon tbe verdict in favor of tbe plaintiffs.
    Eor tbe appellant there were briefs by A. H. Long, attorney, and TF. E. Howe, of counsel, and oral argument by Mr. Howe.
    
    
      J. P. Evans and O. B. Thomas, for tbe respondents.
   MaRshaix, J.

Many suggestions are made in tbe briefs of counsel for respondents wby tbe judgment is right and should be affirmed, wbicb, in our view of tbe case, need not be considered. Tbe learned trial court rightly decided that if tbe agreement between Tomsecek and appellant’s agent, that tbe first premium on tbe policy might be paid otherwise than in money, and tbe delivery of tbe policy pursuant to such agreement, constituted ■ a waiver by .the company of payment of such premium and of tbe condition that tbe policy should not take effect unless sucb payment should be made while Tomsecek was in good health, then tbe policy took effect before Tomsecek died and plaintiffs were entitled to recover; otherwise appellant is entitled to judgment. Was tbe decision of that'question in respondents’ favor right? That is tbe proposition upon wbicb this appeal turns.

Many authorities are cited to our attention to tbe effect that possession of a policy by the assured at the time of bis death 'prima facie establishes all conditions necessary to its having taken effect as a binding insurance contract in bis lifetime, notwithstanding it contains a stipulation that it shall not take.effect unless tbe first premium is paid while tbe assured is in good health; that if such payment was not in fact made, a waiver thereof will be presumed in tbe absence of evidence to the contrary. Some of sucb authorities bold to rather an extreme doctrine when applied to a policy which does not contain a receipt 'for payment of the first premium and indicates that an independent instrument, evidencing such payment, is to be delivered to the assured upon such payment being made, as in this case. To that extent they are not in harmony with McDonald v. Provident S. L. A. Soc. 108 Wis. 213, and do not meet with our approval. The trial court applied the doctrine of such authorities to this cs.se, and in that, as it seems, committed error. The court went further, not only holding that the agent waived and had implied authority to waive payment of the first premium while the applicant for insurance was in good health, but waived and had authority to waive payment of such premium in money and to make an agreement, binding on appellant, that payment might be made by applying the amount of the premium on the agent’s indebtedness for meat and as a credit entitling him to further delivery of meat. The principle is familiar that the authority of an agent as to waiving conditions of an insurance policy before it takes effect is pretty broad, but it does not go beyond his actual authority and that reasonably implied from the nature of the business carried on. The rule in that regard is the same in respect to an agent for an insurance company as any other. There is no daim that the agent had actual authority to make the agreement found by the jury, so his authority in that regard must be tested wholly by what may be reasonably implied. It may be admitted that Webb was a general agent, and still the difficulty is not lessened, because it cannot be implied that he had any authority in excess of the power of the corporation, and it must be presumed that such power did not include the issue of policies of life insurance for anything but money.

Several cases are cited to- our attention to sustain the decision that an agent may waive the conditions of an insurance .policy calling for payment of the first premium in money, but none of them fit the facts of this case. The nearest ap-proaeh. to a situation similar to the one under consideration is that involved in John Hancock M. L. Ins. Co. v. Schlink, 175 Ill. 284. There the agent agreed to waive payment in money of a part of the first premium, such part not exceeding the amount allowed to him as his commission. The policy was sustained upon the ground that payment of the full amount going to the company was made in money, the court inferentially holding that the agent had no authority to waive payment thereof. The decision followed Lycoming F. Ins. Co. v. Ward, 90 Ill. 554, where the agent agreed to take part payment of the first premium out of the assured’s saloon. In respect to the defense of nonpayment of the first premium in money, the court said:

“As the amount paid in cash was more than enough to pay the premium on this policy, we see no ground for holding that the premium was not all paid in cash.” The agent “was entitled to commissions for procuring the insurance, and if he saw proper to take out his commissions in the saloon, we know of no reason or authority to debar him from doing so.”

So many loose expressions are found in text-hooks and legal opinions as well, as to the power of a general agent of an insurance company to waive the conditions of a policy calling for payment of premiums in money, that it is not to he wondered at that attorneys and courts as well sometimes go astray. A careful analysis of the authorities will show that with few exceptions, which are not of sufficient significance to he followed, the idea, that the agent of an insurance company has implied authority to waive payment of premiums' on an insurance policy in money and agree to take something in lieu thereof which is neither money nor an agreement to pay money, nor an equivalent to money to the insurance company when taken, has'no support. In May, Ins. § 360D, it is said:

“An agent authorized to deliver policies and receive payment may waive the payment of the premium in cash notwithstanding a stipulation in tire policy to the contrary,” citing Home Ins. Co. v. Gilman, 112 Ind. 7.

In that case tbe agent agreed to receive credit on bis own debt to the assured for the amount of the first premium and to pay the insurance company the amount thereof, which agreement was fully carried out, the company actually receiving payment in money. The decision was grounded on the fact that the company received cash for the first premium, substantially according to the contract. The court said:

“We are not required to decide what the rights of the parties would have been in case . . . the agent had failed to give the company credit and remit in the usual course.”

However, the court quoted, without explanation or qualification, and in a way to lead one astray if he fails to examine the supporting authorities, from sec. 360 of May, Ins., this language:

“If the agent be authorized to receive the premium, an agreement between the assured and the agent that the latter will be responsible to the company for the amount, and hold the assured as his personal debtor therefor, is a waiver of the stipulation in the policy that it shall not be binding until the premium is received by the company or its accredited agent,” citing Sheldon v. Conn. M. L. Ins. Co. 25 Conn. 207; Home Ins. Co. v. Curtis, 32 Mich. 402; Willcuts v. Northwestern M. L. Ins. Co. 81 Ind. 300, 309.

The text in May is supported by Sheldon v. Conn.M.L.Ins. Co., supra, and Southern L. Ins. Co. v. Booker, 9 Heisk. 606. In the last case mentioned the agreement was to the effect that the agent should give the assured time to make the first pay ment. There was no waiver of payment in money. In Sheldon v. Conn. M. L. Ins. Co. the facts were that the agent agreed to give the applicant time to make payment of the first premium, to take his note, payable to the company on short time for one half thereof, and his promise to pay such agent the other half, and to personally make the cash payment to the company. It was the custom between the company and the agent to charge the amount of the first premium to the latter upon forwarding to him the policy for delivery, and for the agent to mate settlements with the company from time to time, and to remit money on account. There was no waiver of the payment in money, only a waiver of the time of payment. In Home Ins. Co. v. Curtis, the agent advanced the money for the assured for the first premium, actually paying it to the company, and it was held that there was a sufficient compliance with the provision of the policy requiring payment of the first premium as a condition of the policy going into effect. In Willcuts v. Northwestern M. L. Ins. Co. the facts were that the policy was issued to one of the medical examiners of the company and it was agreed between him and the agent that the dues to the applicant for services as medical examiner might be applied on the premiums. It was held that such agreement was binding on the company as to services actually rendered before the premium became due, because, to that extent, it did not really constitute a waiver of payment in money, as the amount due to the examiner from the company was equivalent to it to a cash payment to that extent.

Enough has been said to indicate the character of the authorities relied upon to show that a general agent of an insurance company has implied authority to waive the provision of an insurance policy calling for payment of the first premium in money. None of them go to the extent of holding that the agent may waive such payment and take something in lieu thereof which does not amount to payment to the corporation in cash,, such as an agreement on the part of the agent to take pay for a premium in meat, no credit being given or payment actually made to the agent, or credit being given by him to the corporation in the usual course of business. The precise question we have here was decided in Hoffman v. John Hancock M. L. Ins. Co. 92 U. S. 161. There the first premium was paid to a local or special agent, by consent of the general agent of the company, in a horse, tbe cancellation of an indebtedness of tbe special agent to tbe applicant for insurance, a note to sncli agent and a note to tbe corporation. Tbe transaction was beld void, SwayNE, T., wbo delivered tbe opinion of tbe court, saying:

“It is an elementary principle, applicable alike to all kinds of agency, that whatever an agent does can be done only in tbe way usual in tbe line of business in wbicb be is acting and tbe implication to that effect “is present whenever bis authority is called into activity, and prescribes tbe manner as-well as tbe limit of its exercise.”

It was further said, in effect, that as life insurance is a cash business, tbe agent of an insurance company, whether be be a general or a special agent, has no implied authority to take or agree to take personal property, such as a horse, in payment of a premium upon an insurance policy; that such an agreement, even if made by^’tbe company itself, would be ultra vires, and if made by an agent without tbe knowledge of tbe company it would not only be ultra vires but a fraud both upon tbe part of tbe agent and tbe applicant for insurance, for tbe latter must be presumed to know that an insurance premium cannot be legitimately paid in horses.

It would seem that nothing further need be said to show that tbe policy in question never became binding upon appellant. Tbe jury found that tbe agent agreed to accept bis own indebtedness for meat as part payment for tbe first premium and to take meat for tbe balance thereof. It is undisputed that such agreement was never carried out by tbe insured so as to obligate tbe agent to pay tbe company. Neither tbe company nor tbe agent received pay for tbe first premium. There is no analogy between this case and one where tbe agent merely agrees to give the applicant for insurance time to make tbe first payment, or agrees that be will advance the amount of tbe first payment himself, and actually does advance it, or agrees to charge himself with the first premium in bis account with the company, according to a custom of doing business between bimself and bis principal, thereby becoming liable to the company. We must bold bere tbat the agent bad no implied authority to use the appellant’s policy of insurance to pay bis meat bills or to build up a credit for future purchases of meat. There are no circumstances disclosed in the evidence to avoid the effect of tbat conclusion. . The motion made by appellant’s counsel for-judgment on the special verdict should have been granted and the duty devolves upon this court to reverse the judgment and remand the cause with directions to strike out the general verdict and render judgment in favor of defendant on the special verdict, dismissing the complaint with costs.

By the Gourt. — So ordered.  