In Iowa it is provided by statute that
"any person who shall hereafter solicit insurance or procure
applications therefor shall be held to be the soliciting agent of
the insurance company or association issuing a policy on such
application, or on a renewal thereof, anything in the application
or policy to the contrary notwithstanding."
Held:
(1) That a person procuring an application for life insurance in
that state became by the force of the statute the agent of the
company in that act, and could not be converted into the agent of
the assured by any provision in the application.
(2) That, if he filled up the application (which he was not
bound to do) or made representations or gave advice as to the
character of the answers to be given by the applicant, his acts in
these respects were the acts of the insurer.
Page 132 U. S. 305
(3) That a "provision and requirement" (printed on the back of
the policy issued on the application) that none of its terms could
be modified or forfeitures waived except by an agreement in writing
signed by the president or secretary, "whose authority for this
purpose will not be delegated," did not change the relation
established by the statute of Iowa between the solicitor and
The case is stated in the opinion.
MR. JUSTICE HARLAN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
This action is upon a policy of insurance on the life of Richard
Stevens, the intestate of the defendant in error. There was a
verdict and judgment against the insurance company.
The policy recites that
"it is issued and accepted upon the
Page 132 U. S. 306
condition that the provisions and requirements printed or
written by the company upon the back of this policy are accepted by
the assured as part of this contract as fully as if they were
recited at length over the signatures hereto affixed."
The signatures here referred to are those of the president and
secretary of the company.
The application for insurance was taken in Iowa by one Boak, a
district agent of the company in certain named counties of the
state, fourteen in number, having written authority "to prosecute
the business of soliciting and procuring applications for life
insurance policies within and throughout said territory."
Among the numerous questions propounded in the application was
the following: "Has the said party [the applicant] any other
insurance on his life? If so, where and for what amounts?" The
answer as it appears in the application is: "No other." That
answer, as were all the answers to questions propounded to the
applicant, was written by the company's agent, Boak. In reference
to the above question and answer, the latter testified:
"I asked him [Stevens] the question if he had any other
insurance, as printed in the application and as we ask every
applicant, and he told me he had certain certificates of membership
with certain cooperative societies, and he enumerated different
ones, and said he did not know whether I would consider that
insurance or not. I told him emphatically that I did not consider
them insurance, and we had considerable conversation about it. He
wanted to know my authority for saying I did not consider them
insurance. I gave him my authority -- gave him my reasons -- and he
agreed with me that these cooperative societies were in no sense
insurance companies, and in that light I answered the question
'No.'"
"Q. Did you tell him at the time that the proper answer was
'No,' after he had stated the facts?"
"A. I did."
"Q. Who wrote the answer in there?"
"A. I did."
The application also contained these clauses:
"And it is hereby covenanted and agreed that the statements and
representations contained in this application and declaration shall
be the basis of and form part of the contract or policy of
insurance
Page 132 U. S. 307
between the said party or parties signing this application and
the said Continental Life Insurance Company, which statements and
representations are hereby warranted to be true, and any policy
which may be issued upon this application by the Continental Life
Insurance Company, and accepted by the applicant, shall be so
issued and accepted upon the express condition that if any of the
statements or representations in this application are in any
respect untrue, or if any violation of any covenant, condition, or
restriction of the said policy shall occur on the part of the party
or parties signing this application, then the said policy shall be
null and void, and all moneys which may have been paid on account
of said policy shall be forfeited to the said company."
"And it is hereby further covenanted and agreed that the
officers of the said company at the home office of the said
company, in Hartford, Connecticut, alone shall have authority to
determine whether or not the policy of insurance shall be issued on
this or any application or whether or not any insurance shall take
effect under this or any application."
"And it is hereby further covenanted and agreed that no
statements or representations made or given to the person
soliciting this application for a policy of insurance or to any
other person shall be binding on the said company, unless such
statements or representations be in writing in this application
when the said application is received by the officers of the said
company at the home office of the said company in Hartford,
Connecticut."
Among the "Provisions and Requirements" printed on the back of
the policy are the following:
"11. The contract between the parties hereto is completely set
forth in this policy, and the application therefor, taken together,
and none of its terms can be modified, nor any forfeiture under it
waived, except by an agreement in writing, signed by the president
or secretary of the company, whose authority for this purpose will
not be delegated."
"12. If any statement made in the application for this policy be
in any respect untrue, this policy shall be void, and all payments
which shall have been made to the company on account of this
contract shall belong to and be retained by the company,
Page 132 U. S. 308
provided however that discovery of the same must be
made by the company and notice thereof given to the assured within
three years from the date hereof."
It was admitted on the trial that at the date of Stevens'
application, he had insurance in cooperative companies to the
amount of $12,000.
The company contended in the court below that by the terms of
the policy, it was discharged from liability by reason of the
answer "No other" to the question as to other insurance on the life
of the applicant, its contention being that the certificates of
membership in cooperative societies constituted insurance which
should have been disclosed in the written answer to that
question.
The court below charged the jury in substance that if at the
time the application was being prepared, Stevens fully stated the
facts to the agent Boak, and the latter came to the conclusion that
certificates in cooperative companies did not mean insurance within
the view the defendant took of insurance, and in that view wrote
the answer that there was no other insurance, then it was the
company, by its agent, that made the mistake, and for such mistake
the responsibility cannot be placed upon the assured. Again:
"If, therefore, you find under the evidence that Stevens did
state fully and fairly the facts in regard to those different
insurances in cooperative companies to the agent, and the agent,
knowing all these facts, wrote the answer in the application as it
is contained therein, the defendant is now estopped from making
defense by reason of the fact that Stevens did have insurance in
these cooperative companies."
It must be assumed upon the record before us that Boak had
authority from the defendant to prosecute the business of
soliciting and prosecuting applications for policies; that Stevens
acted in good faith, and made to the company's agent a full
disclosure of every fact involved in the question as to whether he
had other insurance upon his life; that he was informed by the
agent that insurance in cooperative societies was not deemed such
insurance as the company required to be stated, and that Boak, upon
his own responsibility, as agent of the defendant,
Page 132 U. S. 309
though with the knowledge and assent of Stevens, wrote the
answer "No other," assuring the applicant at the time that such was
the proper answer to be made.
Is the insurance company estopped, under these circumstances, to
dispute its liability upon the policy? This question, the plaintiff
insists, must receive an affirmative answer upon the authority of
Insurance Co. v.
Wilkinson, 13 Wall. 222;
Insurance
Co. v. Mahone, 21 Wall. 152, and
New Jersey
Mutual Life Insurance Co. v. Baker, 94 U. S.
610, while the defendant contends that the case of
New York Life Insurance Co. v. Fletcher, 117 U.
S. 519, requires it to be answered in the negative. An
extended statement of those cases is not necessary, and therefore
will not serve any useful purpose, for the present case can be
determined upon its special facts and upon grounds that did not
exist in any of the others.
By the first section of an Act of the Legislature of Iowa
approved March 31, 1880, entitled "An act relating to insurance and
fire insurance companies," Laws Iowa 1880, c. 211, p. 209, it is
provided that
"Any person who shall hereafter solicit insurance or procure
applications therefor shall be held to be the soliciting agent of
the insurance company or association issuing a policy on such
application or on a renewal thereof, anything in the application or
policy to the contrary notwithstanding."
The second section, among other things, requires all insurance
companies or associations, upon the issue or renewal of any policy,
to attach to the policy or endorse thereon a true copy of any
application or representations of the assured which by the terms of
the policy are made a part thereof, or of the contract of
insurance, or are referred to therein, or which may in any manner
affect the validity of the policy. The third section relates only
to policies of fire insurance. The last clause in the act is in
these words:
"All the provisions of this chapter shall apply to and govern
all contracts and policies of insurance contemplated in this
chapter, anything in the policy or contract to the contrary
notwithstanding."
In
Cook v. Federal Life Association, 74 Ia. 746,
748,
Page 132 U. S. 310
where the question arose as to the scope of the above statute,
the Supreme Court of Iowa said:
"Considering the title of the act and all of its provisions, it
seems to us to be very clear that it applies in its first and
second sections to all kinds of insurance. There can be no doubt
that section one applies to any and all classes of insurance,
whether life, fire, marine, insurance of livestock, or any other
kind of insurance, and the same may be said of the second section.
To hold otherwise would, it seems to us, be inconsistent and
repugnant to the title of the act. If all insurance was not
contemplated, the title would have been, simply, 'An act relating
to fire insurance companies.'"
The object of this legislation is manifest. But if any doubt on
the subject existed, it is removed by the case of
St. Paul Fire
& Marine Ins. Co. v. Shaver, 76 Ia. 282, 286, in which it
was said:
"The purpose of the statute was to settle, as between the
parties to the contract of insurance, the relation of the agents
through whom the negotiations were conducted. Many insurance
companies provided in their applications and policies that the
agent by whom the application was procured should be regarded as
the agent of the insured. Under that provision, they were able to
avail themselves, in many cases of loss, of defenses which would
not have been available if the solicitor had been regarded as their
agent, and many cases of apparent hardship and injustice arose
under its enforcement, and that is the evil which was intended to
be remedied by the statute, and it ought to be so interpreted as to
accomplish that result."
This statute was in force at the time the application for the
policy in suit was taken, and therefore governs the present case.
It dispenses with any inquiry as to whether the application or the
policy, either expressly or by necessary implication, made Boak the
agent of the assured in taking such application. By force of the
statute, he was the agent of the company in soliciting and
procuring the application. He could not, by any act of his, shake
off the character of agent for the company. Nor could the company
by any provision in the application or policy convert him into an
agent of the assured. If it could, then the object of the statute
would be
Page 132 U. S. 311
defeated. In his capacity as agent of the insurance company, he
filled up the application -- something that he was not bound to do,
but which service, if he chose to render it, was within the scope
of his authority as agent. If it be said that by reason of his
signing the application after it had been prepared, Stevens is to
be held as having stipulated that the company should not be bound
by his verbal statements and representations to its agent, he did
not agree that the writing of the answers to questions contained in
the application should be deemed wholly his act, and not in any
sense the act of the company by its authorized agent. His act in
writing the answer, which is alleged to be untrue, was, under the
circumstances, the act of the company. If he had applied in person
at the home office, for insurance, stating in response to the
question as to other insurance the same facts communicated by him
to Boak, and the company, by its principal officer, having
authority in the premises, had then written the answer, "No other,"
telling the applicant that such was the proper answer to be made,
it could not be doubted that the company would be estopped to say
that insurance in cooperative societies was insurance of the kind
to which the question referred, and about which it desired
information before consummating the contract. The same result must
follow where negotiations for insurance are had, under like
circumstances, between the assured and one who in fact and by force
of the law of the state where such negotiations take place, is the
agent of the company, and not in any sense an agent of the
applicant.
It is true that among the "Provisions and Requirements" printed
on the back of the policy is one to the effect that the contract
between the parties is completely set forth in the policy and in
the application, and
"none of its terms can be modified nor any forfeiture under it
waived except by an agreement in writing signed by the president or
secretary of the company, whose authority for this purpose will not
be delegated."
But this condition permits -- indeed, requires -- the court to
determine the meaning of the terms embodied in the contract between
the parties. The purport of the word "insurance" in the question
"Has the said party any other
Page 132 U. S. 312
insurance on his life?" is not so absolutely certain as, in an
action upon the policy, to preclude proof as to what kind of life
insurance the contracting parties had in mind when that question
was answered. Such proof does not necessarily contradict the
written contract. Consequently, the above clause, printed on the
back of the policy, is to be interpreted in the light of the
statute and of the understanding reached between the assured and
the company by its agent when the application was completed --
namely that the particular kind of insurance inquired about did not
include insurance in cooperative societies. In view of the statute
and of that understanding, upon the faith of which the assured made
his application, paid the first premium, and accepted the policy,
the company is estopped by every principle of justice from saying
that its question embraced insurance in cooperative associations.
The answer of "No other," having been written by its own agent,
invested with authority to solicit and procure applications, to
deliver policies, and, under certain limitations, to receive
premiums, should be held as properly interpreting both the question
and the answer as to other insurance.
The judgment is affirmed.