INSURANCE COMPANY
v.
MCCAIN
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An insurance company that appointed an agent to handle premiums was bound by the agent's receipt of a premium payment, and could not later deny liability on a policy by claiming the premium was never paid, because the company's silence after receiving notice that the agent had collected the payment constituted adoption of the agent's act and because parties dealing with an apparent agent are entitled to rely on the agent's authority until formally notified otherwise. The Supreme Court affirmed the judgment, establishing that principals cannot benefit from an agent's acts while simultaneously disclaiming responsibility for them, and that special limitations on an agent's authority must be communicated to third parties or the principal remains bound.
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Mr. Justice Field,
after stating the facts of the case, delivered the opinion of the court.
The law embraced by the instructions to the jury is clearly and correctly stated. No company can be allowed to hold out another as its agent, and then disavow responsibility for his acts. After it has appointed an agent in a particular business, parties dealing with him in that business have a right to rely upon. the continuance of his authority, until in some way informed of its relocation.. The authorities to this effect are numerous, and will be found cited in the treatises of Paley and' Story on Agency.
The law is equally plain, that special instructions limiting the authority of a general agent, whose powers would otherwise be coextensive with the business intrusted to him, must be communicated to the party with whom he deals, or the principal will be bound to the same extent as though such special instructions were not given. Were the law otherwise, the door would be open to the commission of gross frauds. Good faith requires that the principal should be held by the acts of one whom he has publicly clothed with apparent authority to bind him. Story, Agency, sects. 126, 127, and cases there cited.
The law on the silence of the company, after receiving the statement of the agent that the premium had been paid, is also free from doubt. Silence then was equivalent to an adoption of the act of the agent, and closed the mouth of the company ever afterwards. It does not appear that the company ever objected to the payment of the premium to him until after the death of the insured. It was then too late. As pertinently said by counsel, the company cannot be permitted to occupy the vantage ground of retaining the premium-if the party continued in life, and repudiating it if he died.
Judgment affirmed.
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Am. Cas. Co. OF Reading v. Castellanos, 203 So. 2d 26 (Fla. 3d DCA 1967)…ion of an assigned risk plan. However, that question is not before us. What is before us are the facts of this particular case. We are inclined toward the view expressed by Mr. Justice Field in the case of Southern Life Insurance Company v. McCain, 96 U.S. 84, at page 85, 24 L.Ed. 653, (1878), wherein he states: “Good faith requires that the principal should be held by the acts of one whom he has publicly clothed with apparent authority to bind him.” We find that American Casualty Company “clothed” the…
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Lyons Milling Co. v. Goffe & Carkener, Inc., 46 F.2d 241 (10th Cir. 1931)…not binding upon a third person who deals with such agent in good faith without knowledge of such instructions or limitations, and in reliance upon the apparent authority with which the principal has clothed him. Southern L. Insurance Co. v. McCain, 96 U. S. 84, 26 L. Ed. 653; Aetna Ind. Co. v. Ladd (C. C. A. 9) 135 F. 636, 647 ; 2 C. J. p. 566, § 209. 155,000 bushels of wheat was not an excessive hedge for a flour mill of 500 barrel capacity and there was nothing about the transactions which would have wa…
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Hall v. Union Indem. Co., 61 F.2d 85 (8th Cir. 1932)…id and said, as found by the.special master, was calculated to confirm the plaintiff in his belief that he was dealing with an authorized general agent of the defendant. The applicable rule of law is stated in Southern Life Insurance Co. v. McCain, 96 U. S. 84, 86, 34 L. Ed. 653. The court said: “No company can be allowed to hold out another as its agent, and then disavow responsibility for his acts. After it has appointed an agent in a particular business, parties dealing with him in that business have…
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