
    [Sac. No. 489.
    Department One.
    October 30, 1899.]
    JOSEPH LA MARCHE, Appellant, v. NEW YORK LIFE INSURANCE COMPANY, Respondent.
    Life Insurance—Fraud of Agent—Return of Policy—Action for Damages—Erroneous Nonsuit.—One who was defrauded into giving his note for the first premium, upon a policy of life insurance, by the misrepresentations of the agent of the insurance company as to the conditions of the policy to he issued, and who was compelled to pay the note to an innocent holder, notwithstanding a prompt return of the policy, and demand of return of the note, may maintain an action for the recovery of damages for the fraud; and, where the evidence showed a fraud of the agent for which the company was responsible, it was error to grant a nonsuit in such action.
    Id.—Fraud in Securing Application—Filling Signed Blank—Author- . ity of Agent.—An agent of a life insurance company authorized to negotiate applications for policies, who made fraudulent misrepresentations to an applicant not proficient in the English language as to what would be the conditions of a policy to be issued under a blank application, which he induced the applicant to sign, without knowledge of the meaning of the terms used, acted, in filling up the blank application, not as the agent of the applicant, but within the scope of his authority as agent of the company; and the fraud thereby practiced by the agent to the injury of the applicant must be treated as the fraud of the company.
    Id.—Validity of Signed Blank — Authority from Applicant—Oral Agreement.—A signed blank is not an application before it is filled; and an agent of the insurance company who' fills a blank which an applicant has signed, can have no authority from the applicant to insert in the form any proposal different from the oral agreement made between them; and if different proposals therefrom are inserted, the instrument is not the application of the ■party who signed the blank.
    Id.—Provision as to Unwritten Statements by Agent.—The application, as completed by the agent, having been fraudulently obtained from the applicant, the insurance company can derive no advantage from a stipulation therein that the company should not be affected by unwritten statements or promises made by the agent, of which stipulation the applicant had no knowledge, and which was fraudulently procured.
    Id.—-Failure to Read Application—Negligence.—Upon the facts appearing in this case, the applicant was not chargeable with negligence in failing to read the application either before or after the agent filled the blanks therein.
    Id.—Return of Policy—Consent of Beneficiary' not Required.—The fact that the. wife of the applicant, who was named as beneficlary in the policy, did not join in the offer to surrender it, does not affect the applicant’s right of action for the fraud practiced upon him. Having never applied for the policy which the company assumed to issue, and which he did not accept nor agree to accept, his wife had no interest therein.
    APPEAL from a judgment of the Superior Court of Tulare County and from an order denying a new trial. ¡Wheaton A. Gray, Judge.
    The facts are stated in the opinion.
    E. W. Holland, and E. L. Alford, for Appellant.
    No contract existed for the policy, which was never accepted; and the wife of La Marche had no interest to restore. (Bishop on Contracts, secs. 328, 329, 350; White v. Corlies, 46 N. Y. 467; Trevor v. Wood, 36 N. Y. 307; 93 Am. Dec. 514.) The signed blank having been filled out by defendant’s agent in a manner not authorized by the plaintiff, whose consent to the alteration was never obtained, it was not binding on the plaintiff. (Civ. Code, sec. 1700; Bishop on Contracts, sec. 755; Wheelock v. Freeman, 13 Pick. 165; 23 Am. Dec. 674; Stoddard v. Penniman, 108 Mass. 366; 11 Am. Rep. 363; Schwalm v. McIntyre, 17 Wis. 232; Smith v. Mace, 44 N. H. 553; Fay v. Smith, 1 Allen, 477; 79 Am. Dec. 752; Washington Sav. Bank v. Ecky, 51 Mo. 272.) The companjr was hound by the acts and representations of its agent. (Southern Life Ins. Co. v. McCain, 96 U. S. 84; Civ. Code, sec. 2319, subd. 2; Union Pac. R. R. Co. v. Durant, 3 Dill. 343; Henderson v. Railroad Co., 17 Tex. 560; 67 Am. Dec. 675; Fort Wayne Turnpike Co. v. Deam, 10 Ind. 563; Boone on Corporations, sec. 79; Sedgwick on Damages, 755; 8 Am. & Eng. Ency. of Law, 642; Wolfe v. Pugh, 101 Ind. 293; Law v. Grant, 37 Wis. 548; Jeffrey v. Bigelow, 13 Wend. 518; 28 Am. Dec. 476; White v. Sawyer, 16 Gray, 586; Sandford v. Handy, 23 Wend. 260.)
    Page, McCutchen & Bells, for Bespondent.
    .The failure of the wife to surrender her interest in the policy is fatal to plaintiff’s action. (Jurgens v. New York Life Ins. Co., 114 Cal. 161; Civ. Code, sec. 1691, subd. 2.) The policy took effect under the application, however induced. (Griffith 
      
      v. New York Life Ins. Co., 101 Cal. 627; 40 Am. St. Rep. 96.) Yo excuse for nonrescission is alleged, and none can be relied upon. (Daley v. Russ, 86 Cal. 114.) The express stipulation in the application precludes recovery; and plaintiff cannot shelter himself under a plea of equitable estoppel by reason of the agent’s fraud or negligence. (May on Insurance, 3d ed., sec. 137, p. 342; Shawmut etc. Co. v. Stevens, 9 Allen, 332; Chase v. Hamilton Ins. Co., 20 N. Y. 52; New York Life Ins. Co. v. Fletcher, 117 U. S. 519; Simons v. New York Life Ins. Co., 38 Hun, 309; Rohrbach v. Germania etc. Co., 62 N. Y. 63; 20 Am. Rep. 451; Alexander v. Germania etc. Co., 66 N. Y. 467; 23 Am. Rep. 76.) The fact that the plaintiff signed the application without reading it is of no avail. (Hawkins v. Hawkins, 50 Cal. 558; Gulliher v. Chicago etc. R. R. Co., 59 Iowa, 416; May v. Johnson, 3 Ind. 449; Wallace v. Chicago etc. R. R. Co., 67 Iowa, 547; Shawmut Mut. Fire Ins. Co. v. Stevens, supra; New York Life Ins. Co. v. Fletcher, supra; Simons v. New York Life Ins. Co., supra.)
    
   BRITT, C.

—Action for damages sustained by plaintiff because of fraud alleged to have been practiced on him by defendant, a life insurance company, through the instrumentality of one Eaton, its agent, whereby defendant obtained from plaintiff his negotiable promissory note for the sum óf four hundred and thirty dollars and fifty cents, ostensibly in payment of the first annual premium on a policy of insurance to be issued on his life, which note plaintiff was subsequently compelled to pay to a third person holding the same. At the trial defendant moved for judgment of nonsuit on the evidence produced by plaintiff, and the court granted the motion.

It is not contended in this court by the defendant that, the evidence was insufficient to show fraud in the representations by which Eaton, the agent, obtained plaintiff’s note, but it is urged that for certain reasons, to be presently noticed, the plaintiff is in no position to hold defendant responsible on that account. Among the facts which the evidence tended to establish were the following: Plaintiff is a farmer by occupation, a foreigner by birth, unacquainted with the technical terms of life insurance, and accustomed to rely on other persons for the conduct of transactions of moment requiring some proficiency in the English language. Eaton visited him at his farm and represented to him in substance that in consideration of his note aforesaid, and his agreement to pay an annual premium of the same amount for the term of fifteen years, the defendant would issue to him its policy on his life in the sum of ten thousand dollars, payable to the beneficiary to be named therein in case of plaintiffs death during said term, and, if he survived said period, then the policy would be paid up, and, if he chose, he “would draw ten thousand dollars.” Plaintiff agreed to the terms'proposed, and executed the note aforesaid. Eaton produced a blank form of application to the defendant for a policy, and requested plaintiff to sign his name thereto, saying that he, Eaton, would fill the same afterward. Plaintiff complied without reading the paper. Eaton departed with the form thus ■signed, and subsequently completed it and forwarded it to the ■company. Among the provisions of such application was one to the effect that the insured reserved the right to change the beneficiary of the insurance at any time; and another was that “no statements, promises, or information made or given by or to the person soliciting this application shall be binding on the company or in any manner affect its rights, unless such statements, promises, or information be reduced to writing and presented to the officers of the company at the home office in this application.” As completed by Eaton it called for a policy materially different from that he had described to the plaintiff. The company issued a policy accordingly, whereby it engaged to pay the sum of ten thousand dollárs to the wife of plaintiff in case of his death within fifteen years; but the cash surrender value of the policy at the end of that time was therein stated to be three thousand and seventy dollars (together with a “dividend” of undefined amount), instead of ten thousand dollars as orally promised by Eaton, and instead of becoming then a paid-up policy its further continuance was conditioned upon the payment of premium at the rate of three hundred and sixty-seven dollars per year. The policy was sent to plaintiff by mail; he returned it to defendant, accompanied by a letter which he caused to be written stating the particulars wherein the policy differed from the representations of Eaton, and demanding the return of the note he had given for the first premium; such demand was refused; and plaintiff, after payment of the note, brought this sxxit.

1. Defendant contends that by signing the blank application and delivering it to Eaton plaintiff made Eaton his agent to-complete the same, and thus assented to the terms which Eaton saw fit to insert. We do not understand this to be the law in-cases such as the present; the blank form was such as could be intelligently filled only by one possessing some skill in the technology of life insxxrance; for example, it required an answer to the question whether the insured desired "an accumulation policy with guaranteed cash values as set forth in the policy-form of the company”; plaintiff neither knew nor assumed to know the meaning of these terms; presumptively, Eaton possessed the requisite knowledge, and there is no doubt that the preparing of the application was within the scope of his authority as agent for the company (Continental Ins. Co. v. Chamberlain, 132 U. S. 304, 311; Aetna Ins. Co. v. Olmstead, 21 Mich. 246; 4 Am. Rep. 483; Donnelly v. Cedar Rapids Ins. Co., 70 Iowa, 693); his act in filling the instrument over the signature of plaintiff was therefore the act of the company, and fraud by him in the performance of that act, to the injury of plaintiff, must be treated as the fraud of the company. This conclusion, which, as will appear, is virtually decisive of the case, is fully supported by the decisions on the subject. (Wheaton v. North British etc. Ins. Co., 76 Cal. 415; 9 Am. St. Rep. 216; Hingston v. Insurance Co., 42 Iowa, 46; Fitchner v. Fire Assn., 103 Iowa, 276, 279; Swan v. Insurance Co., 96 Pa. St. 37; Dowling v. Insurance Co., 168 Pa. St. 234; Rowley v. Insurance Co., 36 N. Y. 550; O’Brien v. Home Benefit Soc., 117 N. Y. 310; Massachusetts etc. Ins. Co. Eshelman, 30 Ohio St. 647; Farmers’ Ins. Co. v. Williams, 39 Ohio St. 584; 48 Am. Rep. 474; Kausal v. Insruromce Assn., 31 Minn. 17; 47 Am. Rep. 776; Bowlus v. Insurance Co., 133 Ind. 106.)

2. The provision of the application that the company should not be affected b3r statements or promises made 'by or to the-agent unless the same were redxxced to writing and presented in the application can be of no avail to defendant on the facts which the evidence for plaintiff tended to show. Lor present, purposes it is sufficient to say of such provision that plaintiff' had no knowledge of it and did not assent to it; although such knowledge might be imputed to him if his signature to the application had been honestly obtained, yet since the instrument, as completed by the agent was fraudulent as to plaintiff, it must follow that defendant can derive no advantage from any stipulation thus fraudulently procured. (McKay v. New York Life Ins. Co., 124 Cal. 270, and cases cited; Lycoming Ins. Co. v. Woodworth, 83 Pa. St. 223; 1 Joyce on Insurance, secs. 508, 509.)

3. Defendant seems to place most reliance on the circumstance that the plaintiff’s wife, who was named as beneficiary of the insurance, did not join in his offer to surrender the policy. It is claimed that her failure to do so is fatal to plaintiff’s-action, and that Jurgens v. New York Life Ins. Co., 114 Cal. 161, settles the question in defendant’s favor. The ground taken in that case was that since the beneficiary—there, as here, the wife of the plaintiff in. the action—had a vested interest in the policy, the husband could not, without her concurrence, rescind the contract evidenced by that instrument. The case before us differs from that in some essential particulars. The wife of La Marche never acquired an interest in the policy defendant issued to her husband. Aside from any consideration of fraud in the procurement of the application, it seems to us doubtful whether, in view of the provision that the right to change the beneficiary of the insurance at any time was reserved to La Marche, the beneficiary first named could be said to have a vested interest in the policy in any sense that would prevent her husband from disposing of it as he pleased. (See Splawn v. Chew, 60 Tex. 532; Block v. Valley Mut. Ins. Assn., 52 Ark. 201; 20 Am. St. Rep. 167; 2 Joyce on Insurance, sec. 730.) We do not, however, venture an opinion on that question, for this case is for other reasons without the rule held in Jurgens v. New York Life Ins. Co., supra. There the court said: “The policy issued to him [Jurgens] was precisely such a policy as he' had applied for in writing”; and the opinion of the court was-influenced throughout by the fact that Jurgens really assented to the contract which he subsequently assailed, although his assent was induced by fraudulent representations of the company’s agent concerning its meaning; necessarily, in that view, the contract was good until rescinded. (Civ. Code, sec. 1566.) But here, when the blank form left the hand of La Marche it was not an application for a policy; it was meaningless until completed by Baton, and the only ground on which La Marche can be said to be bound by it is that by delivering the paper with his signature attached he constituted Baton his agent to fill the blanks, and so became responsible for what the latter did in that behalf. (Bishop on Contracts, sec. 1174, and cases cited; Loan etc. Co. v. Brown, 50 Mo. App. 461.) It has been held that if the party so made the agent of the other fills the blank with terms different from those which have been orally agreed upon he exceeds his implied authority, and the instrument is not the contract of the party who has signed it (Rounsavell v. Pease, 45 Wis. 506; Green v. Sneed, 101 Ala. 205, 46 Am. St. Rep. 119); however this may be in general, it is plain that the rule to which we have adverted—that one who has signed a contract in blank and delivered it to the other contracting party thereby makes the latter an agent to fill the blanks—has no effect in the case at bar; for, as shown above, the agent of an insurance company who thus deals with the blank application of a customer for a policy acts yet as the agent of the company, not of the applicant, and can have no authority from the latter to insert in the form any proposal different from the oral agreement. We may also observe that upon the facts appearing La Marche is not chargeable with negligence in failing to read the application either before or after Baton filled the blanks. (Fitchner v. Fire Assn., supra; Germania Ins. Co. v. Lunkenheimer, 127 Ind. 536; 1 Joyce on Insurance, secs. 489, 490. See Maxson v. Llewellyn, 122 Cal. 195; McKay v. New York Life Ins. Co., supra.)

It follows that plaintiff never applied for the policy which defendant assumed to issue, and, of course, his wife could have no vested or other interest in a policy which he did not accept nor agree to accept. It was error to grant the nonsuit, and the judgment and order denying a new trial should be reversed.

Gray, C., and Chipman, C., concurred.

For the reasons given in the foregoing opinion the judgment and order denying a new trial are reversed.

Harrison, J., Garoutte, J., Van Dyke, J.

Hearing in Bank denied.  