Corrigan v. Natl. Motor Underwriters , 222 Mo. App. 113 ( 1928 )

The form of written application, on file in the Insurance Department of this State, used by the defendant in writing policies of insurance, contains a form of power of attorney that reads as follows:

"I hereby designate the Equitable Underwriters Company, a Corporation, my Attorney-in-Fact, hereinafter called the Company, with power to appoint a substitute and deputies to exchange several inter-insurance contracts for me, but not joint contracts with the National Motor Underwriters, hereinafter called the Underwriters, in accordance with the laws of the State of Illinois providing indemnity against loss under any and all classes of automobile hazards of fire, theft, tornado, cyclone, collision, death, personal injury and property damage. The Company is hereby authorized to appoint the Director of Trade and Commerce of the State of Illinois to accept service of process in any suit or action brought upon any inter-insurance contract issued by the Company. The Company may adjust all losses and claims arising out of contracts so issued and may accept service of process and appear in suits, actions or proceedings thereon and bring, prosecute, defend, compromise, settle or adjust the same. The Company shall receive for its services hereunder an amount equal to twenty-five per cent of payments made by each policyholder. Each policyholder shall deposit with the Company a sufficient sum to pay for the insurance applied for. After deducting the compensation due the Company, the remainder of said premium shall be used for creating and maintaining reserves required by law for paying losses and for all other necessary expenses. Each policyholder hereby assumes as to any risk a liability of proportionate payment not exceeding an amount equal to the current annual premium deposit. The Company may act generally in the premises and on my behalf do all such acts and things in relation thereto as fully and effectually in all respects as I, myself, could do. This instrument may be altered or amended at any regular or special meeting of the National Motor Underwriters by a majority vote in person or by proxy.

"Note: Here follows description of Automobile.

"I have paid $____ required hereon, and agree that insurance applied for is not effective until Policy is issued and that the Company is not bound by any knowledge of or statement made to or by any agent or solicitor, unless written herein.

"Dated at ____ this ____ day of ____. 192_

"Witnessed by __________________

"Signature of Applicant ____________________________

"Filed December 21, 1923."

It is insisted by the defendant that in view of the relationship between the various subscribers who signed applications containing a power of attorney like the one above set out, together with section 6376, Revised Statutes 1919, as amended (Laws of 1921, p. 409) there can be no oral contract of insurance by an attorney-in-fact of this kind; that the above power of attorney shows that the attorney-in-fact in this case was not empowered to enter into parol contracts of insurance and that the very nature of the relationship between the various subscribers requires a written contract. In this connection it is argued that the relationship between the subscribers is not that of a partnership, one subscriber being in no sense the agent for the others; that the personnel of the subscribers is always changing by the expiration of old contracts and the execution of new ones; that the relationship between the subscribers is that fixed by the power of attorney. In this connection it is insisted that the attorney-in-fact can have only such authority as is granted him by the power of attorney.

It will be noted that the power of attorney in the case at bar does not expressly prohibit the attorney-in-fact from making oral contracts of insurance. It has been held, under a similar arrangement, that the attorney-in-fact is given almost unlimited powers, as in this case, in reference to the risks to be written and, therefore, the public in dealing with it is warranted in treating the person (attorney-in-fact) held out by the underwriters (the subscribers) as their credited representative as a person possessing plenary power usually vested in such officers. [Ralli v. White, 47 N.Y.S. 197, 203, 204; Young v. Mfg. Co., 124 Ill. App. 94, 96; Ralli v. White, 46 N.Y.S. 376, 378.] In the case of Young v. Mfg. Co., supra, the court said, l.c. 96, that prospective subscribers are not even bound at their peril to examine the power of attorney to ascertain what limitations of power, if any, are contained therein.

The statute relied upon by defendant (Laws of 1921, p. 409) provides that a copy of the form of the power of attorney and the form of the policy shall be filed with the Superintendent of Insurance and that the location of the office where "such contracts . . . are issued" must be set out in the declaration to be filed with the said superintendent. [See Laws of 1921, p. 409.] The Superintendent of Insurance is given no authority to approve or disapprove the form of the power of attorney or the policy. However, the filing of these forms is no doubt required to furnish evidence to the Superintendent of Insurance, who must license reciprocal companies under the law (section 6383, R.S. 1919), that the character of insurance to be written is the kind mentioned in the statute.

We fail to see how a mere provision for the filing of a copy of the contract or policy with the Superintendent of Insurance can be construed as prohibiting an oral contract of insurance. See section 9753, Revised Statutes 1919, which, undoubtedly, applies in cases like this one where the attorney-in-fact is a corporation, also King v. Ins. Co., 195 Mo. 290, 301, 307; Baile v. Ins. Co., 73 Mo. 371, 381; Lea v. Ins. Co., 168 N.C. 479, 484, 485; Trustees, etc., v. Ins. Co., 19 N.Y. 305; Commercial Mut. Marine Ins. Co. v. Union Mut. Ins. Co., 19 Howard 318; Massachusetts Bonding Ins. Co. v. Vance, 15 A.L.R. 981, 986, 989. In King v. Ins. Co., supra, l.c. 305, it is held that an oral contract of insurance is valid unless expressly prohibited by statute. The case of Salquist v. Oregon Fire Relief Ass'n,100 Or. 416, 420, involves a statute unlike the Missouri statute relied upon by defendant. The case of Schilbrek v. Casualty Co. (Wis.), 192 N.W. 456, cited by the defendant, is not in harmony with those that we have cited from our Supreme Court. In neither the Oregon nor the Wisconsin case was there a statute considered similar to our section 9753, Revised Statutes 1919.

A point is made that the position pleads an oral contract to insure in the future and not a contract of present insurance, but an examination of the petition discloses that this point is wholly without merit.

I concur in affirming the judgment.