
    Home Fire Insurance Company v. Stanislaus Garbacz.
    Filed June 16, 1896.
    No. 6611.
    1. Insurance: Failure to Pax Premium Note: Effect. An insurance company may by its policy provide that upon the failure of the insured to pay in full at maturity a premium note therein described said policy shall lapse and remain inoperative while such note remains unpaid, and such condition, unless waived, is a complete defense to an action by the insured for a loss during the period of default.
    2. Principal and Agent: Delegation of Authority. Authority conferred upon an agent requiring the exercise by him of special skill, judgment, or discretion cannot, in the absence of a known usage, unless justified by the necessities of the ease, without the consent of the principal, be delegated to another.
    Error from the district court of Yalley county. Tried below before Thompson, J.
    
      J acob Fawcett and Greene é Breclcenridge, for plaintiff in error.
    
      A. M. Robbins, contra.
    
   Post, O. J.

This was an action in the district court for Yalley county, where the defendant in error as plaintiff was permitted to recover for the value of three mares, one mule, and one two-year-old colt, being property 'covered by the policy of insurance, which is the basis of the action.

Of the several allegations of error one only needs be noticed at this time. In the policy introduced in evidence we observe the following condition: “It is hereby understood that if the premium is not paid in cash at the time of making the application for this insurance, and a note, notes, or obligation is given for the whole or a part of the premium on this policy of insurance, that it is a condition of the acceptance of such application, and the issue of this policy, that such note, notes, or obligation shall be promptly paid when due — time, as to such payment, being the essence of the acceptance of such note, notes, or obligation, and the issuing of this policy, and if not paid when due, this policy shall lapse at the maturity of said note, notes, or obligation, and cease to be in force, and be and remain inoperative while past due and unpaid, and until such past due note, notes, or obligation is fully paid, and this company shall not be liable during such default, and no demand or legal action on the part of this company to secure it or enforce payment, shall be construed as reviving the policy. The payment after maturity of such note, notes, or obligation, in whole or in part, and its acceptance and retention by this company, shall not render this company liable for any loss occurring after the maturity of such note, notes, or obligation, and while the same or any part thereof remain past due and unpaid, nor shall such subsequent payment and its retention by this company be construed to be retroactive, or to extend the policy beyond its original term, or be deemed a waiver of any condition in the policy, application, or note. The actual payment of such past due note, notes, or obligation to the company or its authorized collector having such note in his possession for collection, revives the policy as to such note, notes, or obligation, from and after the date of such payment, and its receipt by said company.” On the part of the defendant below it was shown that a note of $11.50, the consideration for said policy, mátured January 1, 1890, and on October 27, following, said note remaining wholly unpaid, suit was commenced thereon. On the 1st day of November said action was dismissed before judgment, upon the execution of a new note for $17.85, due forty days after date, being the amount of the note first described, with interest and costs expended and incurred in the prosecution of said action by the defendant in error. The last mentioned note was taken by Mr. Coffin, whose relation to the plaintiff in error was that of an attorney and collection agent, as “collateral” to the note for $11.50, and is so designated by an indorsement thereon. It also contained the following interlineation, apparently in the same hand as the other waiting thereon, viz.: “This note does not revive policy.” An attempt was made to prove that the words quoted were added without the consent of the maker, subsequent to the execution and delivery of the note, but with what success it is needless to determine, for reasons hereafter appear. The loss, as shown by the proofs, occurred by fire on the 19th day of December, 1890, subsequent to the maturity of the second or collateral note and at which time the said premium was wholly unpaid, wherefore it is argued that the policy had by virtue of the foiegoing stipulation lapsed and remained inoperative up to and including the date mentioned.

A provision similar to that relied upon was held by this court in Phenix Ins. Co. v. Bachelder, 32 Neb., 490, and same case 39 Neb., 95, to be reasonable, and a complete defense to an action for a loss which occurred during the period of default. We have no doubt of the soundness of the conclusion there stated, which is in accord with the decided weight of authority, if indeed there can be said to exist a diversity of opinion upon the subject. But an attempt was made to prove a waiver of the foregoing condition of the policy by an extension of time for payment of the collateral note. In support of that contention the defendant in error testified to a conversation relating to said note, the day preceding its maturity, with Mr. Coffin’s clerk and stenographer, Miss McMahon, in which the latter agreed to extend the time for payment thereof until January 1. He is, however, contradicted by Miss McMahon, who testified that the defendant in error, about the time in question, called at the office in which she was employed and spoke about an extension of his note, but was referred by her to Mr. Coffin as the only person having authority to grant his request. The district court should, we think, have directed a verdict for the plaintiff in error without regard to the testimony of tbe last named witness, since there is an evident failure of proof upon tlie issue of a waiver. Mr. Coffin was, it 'may be assumed, authorized, in behalf of the plaintiff in error, to allow the extension sought, but such authority implies the exercise of a judgment or discretion which in the absence of a known usage, unless justified by the necessities of the case, cannot without the consent of the principal "be by an agent delegated to another. (Furnas, Irish & Co. v. Frankman, 6 Neb., 429; Commercial Bank of Lake Erie v. Norton, 1 Hill [N. Y.], 501; Titus v. Cairo & F. R. Co., 46 N. J. Law, 393; Ruthven v. American Fire Ins Co., 60 N. W. Rep. [Ia.], 663; Mechem, Agency, sec. 186, and cases cited. Had Miss McMahon been in this instance expressly authorized by Mr. Coffin to allow the alleged extension, her act in that behalf would not, in view of foregoing authorities, conclude the plaintiff in error in the absence of a subsequent ratification concerning which the record is silent.

Rio VERSED AND remanded.

Harrison, J., not sitting.  