Opinion
No. 32871.
November 15, 1937. Suggestion of Error Overruled January 10, 1938.
1. APPEAL AND ERROR.
Supreme Court, in considering the propriety of a directed verdict, was required to treat as proven all material facts which the evidence established either directly or by reasonable inference.
2. INSURANCE.
An agreement by indemnity insurer's adjusters that insurer would reimburse insured for wages previously advanced by insured to employee during employee's disability if employee would accept cash settlement in satisfaction of liability insured against was binding on insurer, notwithstanding policy provisions that insured should not voluntarily assume any liability and that only insurer's officers could waive policy provisions, in view of statute providing that adjusters should be held to be insurer's agents as to all duties and liabilities imposed by law (Code 1930, section 5196).
3. INSURANCE.
Under statute making an insurance adjuster an agent of the company, insurance adjuster had the same authority that insurer itself had to reimburse insured for wages previously advanced by insured to employee during employee's disability in consideration of a cash settlement, notwithstanding provisions in policy to the contrary, since the statute and not the policy provisions control (Code 1930, section 5196).
APPEAL from the circuit court of Hinds county. HON. J.P. ALEXANDER, Judge.
Harold Cox, of Jackson, for appellant.
The conduct and declarations of appellee's adjusters are competent to prove ultimate facts in issue.
A conversation or other communication between an agent and the party dealing with him, while not evidence of the agent's authority, is admissible to show the understanding of such party on the subject, his good faith, and that he was justified in treating the agent as such.
2 C.J., page 942, sec. 703, page 932, sec. 688 page 939, sec. 695, and page 962, sec. 733; 22 C.J., page 289, sec. 318.
An agent having general authority to compromise or make settlements of claims or accounts for his principal has implied power to do the usual and necessary things to effect such compromise or settlement, and, where the settlement is within the apparent scope of the agent's authority, the principal is bound thereby, especially where he accepts and retains its benefits.
2 C.J., page 652, sec. 298, and pages 570-573, sec. 211.
The agency of this adjuster is made so by statute.
Where general authority is established, and the act of the agent is not shown to be of an unusual or extraordinary character, the presumption is that the agent had authority to do such act, and the burden of proof is then upon the principal to show that he had not such authority.
2 C.J., page 920, pages 925-26, sec. 665.
An admission of an agent may be received in evidence against his principal, where the agent, in making the admission, was acting within the scope of his authority, and the transaction or negotiation to which the admission relates was pending at the time when it was made.
22 C.J., pages 386-88, sec. 460-61, and page 367, sec. 440; National Bank of Metropolis v. Kennedy, 21 L.Ed. 554; 3 Current Legal Thought, No. 8, page 702; McClave Brooks Co. v. Belzoni Oil Works, 113 Miss. 500, 74 So. 332; Western Union Tel. Co. v. Walters, 106 Miss. 59, 63 So. 194; Pennington v. Peoples Bank, 132 Miss. 23, 95 So. 694.
The appellee is shown liable to the appellant by the evidence for the amount in suit.
G. S.I.R.R. Co. v. Magee Warehouse Co., 109 Miss. 9, 67 So. 648; 2 R.C.L., page 776, sec. 33; Allen Gravel Co. v. Nix, 93 So. 244, 129 Miss. 809; 7 R.C.L., page 590, sec. 581; Jackson v. I.C.R.R. Co., 76 Miss. 607, 24 So. 874; Meder v. Superior Oil Co., 151 Miss. 814, 119 So. 318; Russell v. Palatine Ins. Co., 106 Miss. 290, 63 So. 644; 14 R.C.L., page 871; 2 Am. Jur., sec. 97, page 79.
Here we have an adjuster, in fact several adjusters, sent to appellant's place of business for the sole purpose of looking after the adjustment and settlement with this injured employee. Each of these adjusters in turn agreed that the appellant should be reimbursed for the salary paid such employee for the benefit of appellee so as to enable said adjusters to settle said claim.
Unless otherwise agreed, authority to conduct a transaction includes authority to do acts which are incidental to it, usually accompany it, or are reasonably necessary to accomplish it.
A.L.I., Agency, sec. 35, page 89, sec. 50, page 125, and sections 160, 161; London Guaranty Co. v. Miss. Cent. R. Co., 97 Miss. 165, 52 So. 787; New Amsterdam Co. v. East Tennessee Tel. Co., 139 Fed. 602; Fairly v. Nash, 70 Miss. 193, 12 So. 149; Barton-Parker Mfg. Co. v. Moore, 71 So. 909, 111 Miss. 662.
The authority of the adjuster to have made the contract in suit cannot be doubted.
German-American Provisions Co. v. Jones Bros. Co., 87 Miss. 277, 39 So. 521; Thos. McFarland Lbr. Co. v. Selby, 129 Miss. 894, 93 So. 434.
This agreement with appellant was necessary and incidental to the discharge by the adjuster of his duties in connection with the adjustment. The injured employee himself frankly stated that appellee would have been unable to settle with him for his injuries except for the fact that appellant paid said employee's salary throughout such time. The appellant is entitled to be reimbursed by the appellee on its oral agreement so to do, whereunder and whereby appellant was induced to pay said salary. This contract was made under necessitous circumstances by appellee's adjuster for its benefit. It has reaped all of the benefits therefrom by having made a settlement with said employee by reason thereof. This agreement for appellee to reimburse appellant for said salary paid said employee does not infringe upon any provision of the policy of insurance, but is wholly independent thereof. The testimony of appellant's manager in this record is uncontradicted, and it was not for the court to say that appellant was not entitled to a judgment, if no further evidence were offered by the appellee.
Rothenberg v. Packard, 97 Miss. 428, 52 So. 458; New Amsterdam Cas. Co. v. East Tenn. Tel. Co., 139 Fed. 602; Lusk-Harbison-Jones, Inc. v. Universal Credit Co., 164 Miss. 693, 145 So. 623.
Under the facts of this case, the appellee is estopped at every stage to deny its liability to the appellant, regardless of any authority to said agents to have made the agreement in suit with the appellant. The appellee was notified on every term of appellant's agreement that it should be reimbursed for the salary paid Rhymes.
Strauss Bros. v. Denton, 140 Miss. 745, 106 So. 257; 2 C.J., page 920, sec. 649, page 929, sec. 681; Metzger v. Southern Bank, 98 Miss. 108, 54 So. 241.
Watkins Eager, of Jackson, for appellee.
It is apparent that appellant by the terms of the contract was definitely advised and knew that it had no authority to effect any financial settlement "except at the assured's own cost," and further knew in like manner the provisions of the contract that it was not subject to change or alteration in any respect except by written endorsement "signed by the President, a Vice-President, Secretary or an Assistant Secretary of the company," and that "notice to or knowledge possessed by" any alleged agent or other person would not waive, alter or change the contract, and as to which it was expressly agreed that all of the terms of the contract were embodied in the written policy agreement.
It is thus apparent that any contention that McCormick or any of the other adjusters could be held to have been acting within the apparent scope of their authority is wholly inapplicable because the assured was put on express notice by the terms of the exact policy contract which he relies on for recovery that the adjusters possessed limited authority and had no authority whatsoever to make any agreement other than is set forth in the policy contract, as to which separate agreements the company could only be bound by the officers therein named.
The question of apparent scope of authority and ostensible authority is in no wise involved because the policy contract gave full and complete notice as to the limited authority of the adjuster.
A.L.I., Agency, sec. 35, page 89, sec. 50, page 125.
Of necessity, any cause of action claimed by appellant must be dependent upon the terms of the policy contract made an exhibit to the declaration.
Mutual Life Ins. Co. v. Hebron, 166 Miss. 145, 146 So. 445.
Of course it is elementary that the appellant was bound by the terms of the policy contract, which it had had in its possession for some nine months before the accident occurred.
Home Mutual Fire Ins. Co. v. Pittman, 111 Miss. 425, 71 So. 739; Mixon v. Sovereign Camp W.O.W., 155 Miss. 848, 125 So. 113; Maryland Cas. Co. v. Adams, 159 Miss. 88, 131 So. 544.
The authority of an agent who writes a policy of insurance terminates when the policy is delivered to the assured.
Interstate Fire Ins. Co. v. Nelson, 105 Miss. 437, 62 So. 425; Stewart v. Coleman Co., 120 Miss. 28, 81 So. 653; Connecticut Fire Ins. Co. v. Harrison, 173 Miss. 84, 161 So. 459.
Appellant brought this action against appellee in the circuit court of Hinds county on an indemnity insurance policy, issued by the latter to the former, to recover the sum of $806. At the conclusion of appellant's testimony, on motion of appellee, it was excluded, and verdict and judgment directed for appellee. From that judgment appellant prosecutes this appeal.
In considering the propriety of the directed verdict we shall, as required by law, treat all material facts as proven which the evidence establishes either directly or by reasonable inference. Appellant's business is indicated by its name and so is that of appellee. On January 5, 1935, appellee issued to appellant an indemnity policy with a maximum liability of $10,000. By the terms of the policy appellee undertook to indemnity and save harmless appellant from any loss it might suffer on account of personal injuries to its employees caused by its negligence. One of appellant's employees was one Rhymes; his duties required him to travel in an automobile which appellant furnished. Rhymes was seriously injured in a collision with another automobile on the night of September 16, 1935. The collision was caused by defects in the lights and steering assembly of the automobile Rhymes was driving. His injury required hospitalization for several weeks, and entirely disabled him from work for seven or eight months.
On the 18th day of April, 1936, appellant, out of funds furnished by appellee for that purpose, paid Rhymes the sum of $1,578.20 in full settlement of appellant's liability to him for the injury. In the meantime, pending the negotiations leading up to this settlement, appellant had paid Rhymes his regular salary of $26 a week during his disability. This continued for thirty-one weeks, aggregating $806, the amount involved in this suit. The period of investigation and negotiations looking to a settlement of the matter covered substantially that period. Such negotiations were in charge of three different persons, Aycock, McCormick, and Dowd, who were called upon to do the work by the local agency through which the policy was written. They all agreed for their principal that appellant should continue to pay Rhymes his weekly wages. This agreement continued for thirty-one weeks. They also agreed that any adjustment and settlement made by appellee with Rhymes should exclude this $806, for which appellee would reimburse appellant. In other words, in addition to what appellee might pay Rhymes in settlement it would reimburse appellant for this outlay of $806.
The evidence tended to show that the acceptance by Rhymes of the $1,578.20 was upon condition that appellee would reimburse appellant for the $806. Rhymes offered to testify to that effect, but the court ruled his testimony out. As we understand the arguments, the court placed its ruling upon the following provisions of the policy:
"4. The Assured shall not voluntarily assume any liability, nor incur any expense (other than for immediate surgical or medical relief), nor settle any claim, except at the Assured's own cost. The Assured shall not interfere in any negotiation for settlement, nor in any legal proceeding, but, whenever requested by the Company, and at the Company's expense, the Assured shall aid in securing information and evidence and the attendance of witnesses, and shall co-operate with the Company (except in a pecuniary way) in all matters which the Company may deem necessary in the defense of any suit or in the prosecution of any appeal."
"12. No change in the Agreements, Conditions or Declarations of this Policy, either printed or written, shall be valid unless made by endorsement, signed by the President, a Vice-President, Secretary or an Assistant Secretary of the Company, nor shall notice to, or knowledge possessed by, any agent or any other person, be held to waive, alter or extend any of such Agreements, Conditions or Declarations. Upon the acceptance of this Policy the Assured agrees that its terms embody all agreements then existing between the Assured and the Company or any of its agents relating to the insurance described herein."
It is true that no express authority from appellee was shown for the investigation and acts leading to an adjustment by Aycock, McCormick, and Dowd. The evidence does show, however, that they assumed to act, and as a result thereof the adjustment and settlement was made, and accepted and ratified so far as the payment of the $1,578.20 was concerned. The position of appellee is that under the provisions of the policy, quoted above, they had no authority whatever to bind it to reimburse appellant for the $806. That is true if those provisions of the policy are to control. The trouble about that contention is that under section 5196, Code of 1930, they do not control — they are excluded from the policy by the law. The statute provides, among other things, that every person "who shall examine into or adjust or aid in adjusting any loss for or on behalf of any such insurance company, whether any of such acts shall be done at the instance, or request, or by the employment of the insurance company, or of, or by any broker or other person, shall be held to be the agent of the company for which the act is done or the risk is taken as to all the duties and liabilities imposed by law, whatever conditions or stipulations may be contained in the policy or contract."
The adjusters under the statute had the same authority that appellee itself had. Big Creek Drug Co. v. Stuyvesant Ins. Co., 115 Miss. 333, 75 So. 768; Stewart v. Coleman Co., 120 Miss. 28, 81 So. 653; Agricultural Ins. Co. v. Anderson, 120 Miss. 278, 82 So. 146; Lamar Life Ins. Co. v. Kemp, 154 Miss. 890, 124 So. 62.
The case of Mutual Life Ins. Co. v. Hebron, 166 Miss. 145, 146 So. 445, is not in point for appellee. The agent in that case undertook to make no agreement for his principal, he merely expressed an opinion.
Reversed and remanded.