Insurer estopped by waiver of agent of breach of conditions, when.

SEC. 391. That an insurance agent authorized to make contracts of insurance and issue policies, may waive forfeitures and reinstate and restore a void policy, as a valid instrument, is held by numerous cases. Indeed, it is a power incident to the authority to make a contract of insurance, and the company is as much estopped from denying that he possessed such power, as it is from denying his authority to make contracts when it has delegated such power to him, or permitted him to exercise it. Thus, in a New York case', the policy contained a condition that if the property insured was conveyed, without the assent of the company, it should be void. The property was conveyed to the plaintiff March 4, 1867, and its renewal procured by the vendor March 21, 1867, and on April 15th following, the defendant's agent assented to such conveyance, and to an assignment of the policy to the plaintiff,

loss occurred. Before the buildings were completed they were consumed by fire. Held, insured had the right to assume that G. & C. were authorized to make the indorsement, therefore insurers were liable for the loss. It is not the real, but the apparent authority that controls, and the jury are to say whether the agent had authority in a given case. Hough v. City F. Ins. Co., 29 Conn. 16; Etna Ins. Co. v. Maguire, 51 Ill. 342. In Franklin F. Ins. Co. v. Massey, 33 Penn St. 221, a policy was issued to the plaintiff for one year, and for the full term of any future time or times for which a premium shall be paid and indorsed, or otherwise acknowledged in writing by the secretary or other authorized officer. It was renewed from year to year for about six years, when the company directed the agent who renewed it, to cancel it, of which he notified insured; but he did not pay or offer to insure the return premium. Before that was done the loss occurred. It was held that the authority of the agent did not depend on that which was actually delegated to him by the company, but on that which the plaintiff had a right to believe was given him; that the principal was bound to dissent from the act of his agent in renewing the policy, within a reasonable time after the fact of renewal was communicated, and if that was not done the company could not subsequently repudiate his acts. Where the policy provided that it should be void if assigned without the assent of the secretary. The agent indorsed consent and reported to the company who did not dissent. Held that whether the agent had authority to assent or not, if he was in the habit of doing so, the company were bound. Farmers', etc., Ins. Co. v. Taylor, 73 Penn. St. 342. In Baubie v. Etna Ins. Co., 2 Dil. (U. S. C. C.) 156, the company supplied the agent with blank policies signed by the company's officers. He was authorized to fill them up and to deliver them without first consulting the company. He filled up and delivered one for $4,000, upon the property in question, insuring it for six months; renewed it in writing for six months longer, but beyond that there was no further written renewal. The insured claimed an agreement resting between the agent and himself, that the agent would keep the property constantly insured by renewing the policy every six months, and draw for the premium. It was held that the powers of an insurance agent are presumed to be coextensive with the business intrusted to his care; and his presumed powers were not to be narrowed by limitations not communicated to the person dealing with him; that if the agent did not exceed his apparent authority, the company were bound by his acts. Palm v. Medina, etc., Ins. Co., 20 Ohio, 529; Dayton Ins. Co. v. Kelly, 24 Ohio St. 345; Imperial F. Ins. Co. v. Murray, 73 Penn. St. 13; Hotchkiss v. Germania Ins. Co., 5 Hun (N. Y.) 90. The imposition of a duty implies a power necessary for its performance. Baker v. Cotter, 45 Me. 256; Gloucester Manuf. Co. v. Howard Ins. Co., 5 Gray (Mass.) 497.

'Shearman v. Niagara F. Ins. Co., 46 N. Y. 526; 7 Am. Rep. 380.

and the court of appeals held that the policy was thereby reinstated. The defendant insisted that the policy was made roid by the transfer, and that being void when the agents assented to the conveyance, and assignment of the policy, they had no authority to reinstate it. They further insisted that as the property was conveyed March 4th, the vendor had no insurable interest on March 21st when the policy was renewed in his name, and that the policy for this cause being void, the consent of their agent to its transfer to the plaintiff, knowing the facts when the assent was given, did not render it an operative or valid instrument. But the court held otherwise and the opinion of CHURCH, C.J., upon this point is given in the subjoined note.'

'He said: "The points relied upon by the appellants in this court are the same presented upon a motion for a nonsuit, when the plaintiff rested, and again at the close of the evidence. They are, substantially: 1. That the property, having been transferred without the consent of the company, the renewal of the policy afterward without such consent was void, and rendered the policy a wager policy, void both by statute and common law; 2. That there was no evidence of a consent on the part of the company to a transfer of the property to the plaintiff; and 3. That there was such a change of possession of the property as to render the policy void. The property was transferred to the plaintiff on the 4th of March, 1867, the renewal was made the 21st of March, and on the 15th of April of the same year the policy was transferred to the plaintiff. On the same day the defendant, by its agent, by an indorsement on the back, consented to such transfer of the policy. It is well settled that the person insured must have an insurable interest in the property (Fowler v. New York Ins. Co., 26 N. Y. 422; Ruse v. Mutual Benefit Life Ins. Co., 23 id. 516); and one of the conditions of the policy is, that if any transfer of the title or possession of the property is made, without the consent of the company, the policy shall be void. Assuming that when Lewis J. Shearman transferred the property he retained no insurable interest, I cannot assent to the position that the policy thereby became a wager policy, and void in the sense that it was an illegal contract, and that it could not be revived and restored to life by the act of the defendant. It was void, not for any vice or illegality in the contract itself, but for the reason that there was nothing upon which it could operate. Howard v. Albany Ins. Co., 3 Denio, 301. The parties, it is true, agreed that in a certain contingency it should be void; and if a loss had occurred during that period, no action could have been maintained upon the policy, but the happening of the contingency did not impress upon the contract the character of illegality, so that no subsequent agreement could restore it. The case of Gray v. Hook, 4 N. Y. 449, cited by the learned counsel for the appellant, will serve to illustrate the distinction between a contract valid in its creation, which has become void by an act of the party so that it cannot be enforced, and one that is illegal and contrary to public policy. In that case the cause of action grew out of an agreement between the plaintiff and defendant, by which one of them was to withdraw his application for appointment to an office by the governor in favor of the other, upon an agreement to divide the fees. The court very properly held that this agreement was contrary to public policy and void at common law, and being thus tainted, no new agreement entered into to carry into effect any of its provisions was valid. The same principle was decided by this court in Woodworth v. Bennett, 43 N. Y. 273. But this principle is not applicable to the present case. Here the original contract was lawful and valid; it was not tainted with the vice of corruption or other illegality. It had become void according to its terms, and in that condition it could not be enforced; but it was not beyond resurrection by the act of the parties themselves. I am aware that there is an intimation, by BRONSON, J., in Smith v Saratoga County Mutual Fire Insurance Company, 3 Hill, 508, that a mere waiver would not revive such a policy. He says: It is difficult to see how anything short of a new creation could impart vitality to this dead body.' He did not, how

Facit per alium, facit per se-
-Apparent authority the test.

SEC. 392. The rule is not a doubtful one, either in policy or principle, that in transactions of this character, where one of two persons must

ever, intend to decide the question of waiver, and added: 'But it is unnecessary to put this case upon the ground that the forfeiture could not be waived;' and then proceeds to show that there had been no waiver. In 7 Hill, 49, in a similar case, BEARDSLEY, J., said: 'Whether a policy, after having become void by the alienation of the property insured, can be restored to vitality by a mere act of waiver on the part of the underwriters, need not now be decided.' Precisely what is intended as a 'mere act of waiver' is not very clear; but it is probable that both of the learned judges intended to make a distinction between such an act and an act which would amount to an agreement to revive and continue the contract. I have been unable to find any adjudged case holding that such forfeiture may not be waived, and such policy revived, by an act from which the consent of the underwriters may fairly be inferred. The authorities in this State and elsewhere are quite decisive that it may be done. Solms v. Rutgers' Fire Ins. Co., 5 Abb. (N. S.) 201; Howell v. Knickerbocker Fire Ins Co., 44 N. Y. 276; Wolf v. Security Fire Ins. Co., 39 id. 51; Hooper v. Hudson River Fire Ins. Co., 17 id. 424; Carroll v. Charter Oak Fire Ins. Co., 38 Barb. 402; Keeler v. Niagara Fire Ins. Co., 16 Wis. 523. It is claimed, however, by the counsel for the appellant, that, when the renewal was obtained, the transfer had been made, and that this renewal constituted a new policy, which was void and illegal within the principles before stated. I do not think so. The renewal simply revived the original policy, and continued it with all the virtue which it would have rad, for any purpose, if it had not expired. Besides, Lewis J. Shearman had an insurable interest remaining, as lessee and owner of the equity of redemption, which may be deemed sufficient to obviate this objection. The important question is, whether the forfeiture was waived and the policy revived by the consent of the defendant to the transfer of it to the plaintiff. In the case of an insurance upon goods, it has been held by this court, that a request that the company would consent to an assignment of the policy was sufficient notice to them that the party making it had acquired, or was about to acquire, some interest in the goods insured, and was a compliance with the condition of the policy on that subject. Hooper v. Hndson River Fire Ins. Co., 17 N. Y. 424; Wolf v. The Security Fire Ins. Co., 39 id. 49. An assignment of the policy would be useless for any purpose, unless the assignee had some interest in the subject insured. This interest may be as owner or incumbrancer, but whatever it is, the underwriters, by consenting to the assignment, agree to become answerable to the assignee, to the extent of whatever interest he has, and if the whole interest is transferred, the consent is equivalent to an agreement to be liable to the assignee upon the policy as a subsisting operative contract. I see no reason why the same rule should not apply to a policy upon real as well as personal property, but it is unnecessary in this case to determine that the request to assign was a sufficient notice of the transfer of the property, because it expressly appears that the agent was informed of the fact at the time the request was made. It is objected that the agent was not informed of the time of the transfer, nor that the renewal was subsequent to the transfer, but this is not material. It is enough that the plaintiff requested that he should be substituted as the insured, on the ground that the property had been transferred to him, and the company consented to it. It is of no importance whether his conveyance was recent or remote, nor whether they knew that the policy was void at the time of the renewal by reason of the transfer before that time. They might have insisted upon the forfeiture if they so elected, at whatever time it was made. They knew that the policy was void when the request was made, and they chose to revive it, and thereby consented to insure the property in the hands of the plaintiff as effectually as if they had given a new policy to him. The retention of the premium received on the renewal was a good consideration for this agreement. No other construction can be given to the transaction. The condition requiring consent is important to underwriters, to enable them to determine the character and standing of the insured; and when they agree to a transfer of a policy to a particular person, knowing that he owns the subject insured, the whole purpose of the provision is complied with, and they have no interest to know how or why he acquired it.

sustain a loss, the loss must fall upon him who has made it possible for the other, innocently, to be placed in a position where loss might result to him except for the application of this rule. It would be disastrous to commercial, as well as other interests, if a person, by acting through the agency of another, could shield himself from liability for such person's acts, ad libitum. Fortunately, no such rule exists, and he who entrusts authority to another, in whatever department of business, is bound by all that is done by his agent within the scope of his apparent power, and cannot screen himself from the consequences thereof upon the ground that no authority in fact was given him to do the particular act, unless the act was clearly in excess of his apparent authority, or was done under such circumstances as put the person dealing with him, upon inquiry, as to the agent's real authority; and no exception to this rule exists in the law of insurance. It is always a question of fact, whether the act was done under such circumstances that the assured had a right to believe that the agent was clothed with authority to do the particular act in question.

The rule may be said to be that, unless notice is given to the assured, that in respect of certain matters within the scope of his apparent authority, certain limitations are imposed upon the agent, his acts within the scope of such authority shall be treated as the acts of his principal, and not the acts of the person with whom he deals as the representative of the principal, even though the policy declares him the agent of the assured. The question is not what the powers of the agent in fact were, but what power did the company hold him out as possessing." From the business with which the agent was entrusted, had the assured a right to understand that he had authority to do the particular act, in reference to which the principal denies his authority. In order to charge the company, the

The only remaining point made is, that the possession of the premises was changed, which rendered the policy void. Lewis J. Shearman remained the occupant of the premises, and was temporarily absent with his family at the time of the fire. The house was in charge of one Brown for him. This is not such a change of possession as will avoid the policy. Brown's possession was in fact and in law Shearman's possession. He was Shearman's servant. * * It was never contemplated that the assured should remain constantly on the premises.” 1Commercial Ins. Co. v. Ives, 56 Ill. 402; Columbia Ins. Co. v. Cooper, 50 Penn. St. 331; Beebe v. Hartford, etc., Ins. Co., 25 Conn. 51; Ins. Co. v. Wilkinson, 13 Wall. (U. S.)

2 Eclectic Life Ins. Co. v. Fahrenkrug, 68 Ill. 463.

Etna Ins. Co. v. Maguire, 51 Ill. 354; Washington F. Ins. Co. v. Davidson, 30 Md. 91; Home Life Ins. Co. v. Pierce, 5 Ins. L. J. 290 (Ill.); Farmers', etc., Ins. Co. v. Cheshunt, 50 Ill. 111; In Franklin F. Ins. Co. v. Murray, 73 Penn. St. 13, the defendant's agent entered into a contract wifh the plaintiff to insure his property from year to year, at a certain rate. After the insurance had been kept on foot for about six years, the company directed the agent to cancel it, of

assured must, from the facts, be warranted in relying upon it that the agent had authority to do the act in question, and to bind the company in respect of the matter with which it is sought to charge it.'

which he notified the assured, but did not offer to refund the unearned premium, and a loss having occurred, the defendants denied the authority of the agent to renew the policy. The court held, however, that the derendant's liability did not depend upon what authority they had actually delegated to the agent, but upon that which the assured had a right to believe was given him. In Dayton Ins. Co. v. Kelly, ante, the agent erased certain conditions from the contract before its delivery to the plaintiff, and the court held that, as the insurers held the agent oat as having apparent authority to deliver the contract, with or without the condition; that delivering it with the condition erased, was not notice to the assured that he exceeded his authority, because the assured had no means of knowing whether the agent exceeded his authority or not. Keenan v. Missouri Ins. Co., 12 Iowa, 126; Mound City Life Ins. Co. v. Heeth, 49 Ala. 529. In Ide v. Phonix Ins. Co., 2 Biss. (U. S. C. C.) 333. the insurer's agent was familiar with the property, and offered to insure $1,000 for a term of three years for a premium of $13.50, which money was paid to him. Insured called for the policy frequently, but failed to get it, and soon after he left the state. The property was burned by an accidental fire before any policy was delivered, and before the agent remitted the money to the company. It appeared that the agent had never reported the risk to the company, but had converted the premium to his own use. Prompt notice of the loss was given to the agent, who said he was satisfied that the loss was all right, and promised payment of the claim on different occasions between the autumns of 1864 and 1866. In 1866 the agent notified insured that the company would not pay the claim. It was held that the agent had authority to waive proofs of loss; his acts and assurances in regard to the payment of the loss were also sufficient to waive the clause which required suits to be brought within one year after the loss; and the claim could be enforced without the delivery of a policy, hence the complainant was entitled to recover the amount insured with interest and costs of suit.

'In Winnesheick Ins. Co. v. Holzgrafe, 53 Ill. 516; 5 Am. Rep. 64, the plaintiff sought to charge the insurer with liability upon a parol contract of insurance made with its agent pending an application for insurance. BREESE, C.J., said: "The appellee insists there was a contract of insurance made by the lawfully authorized agents of the company. That contract must rest in parol, for it is not found in the writings we have been considering. Taking the representations and declarations of these agents made to complainant, in connection with his written application to the company for insurance, a contract may be predicated upon them. The question then arises as to the power of these agents to make such a contract. The warrant of their authority is in the record. By that they were only authorized to receive applications for insurance in accordance with the instructions to agents, and to collect and transmit the premiums therefor. This was the extent of their authority, and no instructions have been shown from their principals authorizing them to go one step beyond this, nor is there any proof they ever did, or ever designed, to go a step beyond. They both state they never held themselves out to community as possessing authority to effect insurances, write up policies, adjust losses, or do anything more than the letter of their appointment specified. We have said, in several cases, where an agent of an insurance company shall, with the knowledge of his principal, so hold himself out to the public by receiving applications for insurance, and granting policies, to such an extent as to induce the public doing business with him to believe he is the lawfully constituted agent, the principal, having accepted the cash premium, shall not be permitted afterward, in case of loss, to repudiate the act. Such was the case of Etna Ins. Co. v. Maguire, 51 Ill. 342.

We decide this case on the ground that an application for an insurance was all that was made by complainant, and that the delay in responding to it was not of a character from which an acceptance of the proposal can be implied, and that any contract of insurance effected by the agents of appellants was not binding upon appellants, such contract not being within the scope of the authority with