Knarston v. Manhattan Life Insurance

GAROUTTE, J. This is an action brought to recover upon a policy of life insurance. The defense is, that the policy had become forfeited prior to the death of the insured by reason of the nonpayment of the fourth semi-annual premium. The policy contained the usual forfeiture clause upon failure occurring in the payment of premiums when due. The defendant company, being a New York corporation, was required by the laws of that state to give a written notice to the' insured at a stated time before the premium became due and payable, notifying him of the fact that such premium would become due and payable upon a certain date. The giving of this notice was made by the law of New York a condition precedent to the forfeiture of the policy. It is conceded that in this case the notice was given.

The facts giving rise to this litigation are as follows: The fourth semi-annual payment became due upon November 15, 1895. Upon that day the general manager of the company sent his collector to Knarston, the insured, to collect the premium, but Knarston was absent from his place of business. This fact was reported to the general manager, whereupon the collector was again sent upon November 16th to collect the premium. One Gilmor, representing Knarston, thereupon went to see Landers, the general manager and agent of the company, in reference-to the matter, stating to Landers that Knarston desired an extension until November 24th in which to pay the premium. Landers then stated, in substance, that such extension would be given. Upon November 25th the collector was again sent to collect the premium, and Knarston thereupon [76]promised to pay it that day or make some arrangement in reference to the matter. Upon November 27th the collector was again sent upon the same errand, but failed to get the money. Nothing further was done, and upon December 2d the insured was killed in a railroad accident.

There are but two important questions involved upon this appeal, the first one being: May a general agent of an insurance company waive the conditions of a policy and extend the time of payment of a premium? This question presents but little difficulty in solution, and must be answered in the affirmative. Bacon on Benefit Societies and Life Insurance, section 426, states the true rule when he says: “A general agent has power, unless specially restricted by limitations and instructions communicated to parties dealing with him, to waive or dispense with any of the conditions of the policy. And the company is liable for all acts done by him in the course of his employment. He may waive conditions either in writing or verbally.” It will thus be observed that whatever the restrictions placed upon tile powers of a general agent by the company may be, unless those restrictions are brought home to the insured, the company is bound by the acts of the general agent. The waiver of conditions in a policy of life insurance by the general agent is within his apparent scope and authority, and, in the absence of notice to the contrary, parties dealing with such agent have the right to assume that all general powers rest with him. In this country, where these companies carry on business in almost every state in the Union through the instruments of general agents, such of necessity should be the law. We find ample authority to support the text of the author from which we have quoted. (Silverberg v. Phenix Fire Ins. Co., 67 Cal. 36; Union etc. Ins. Co. v. Wilkinson, 13 Wall. 222; Hartford Life Ins. Co. v. Haydens, 90 Ky. 39; Murphy v. Southern Life Ins. Co., 3 Baxt. 440; 27 Am. Rep. 761; Palmer v. Phoenix Mut. Life Ins. Co., 84 N. Y. 63.) It is said in Joyce on Insurance, section 536: “In general, it may be stated that it is conceded that a general agent may, in the absence of known limitations on his authority, waive a forfeiture as well as the company.” It is .apparent from the foregoing authorities that it is not sufficient .upon the part of the defendant to show that Landers had no