Henne v. Glens Falls Ins. Co. , 245 Mich. 378 ( 1929 )

The plaintiff is a common carrier of merchandise. He owns several trucks and vans which are used to transport such merchandise on the highways. He desired indemnity insurance which would reimburse him for amounts he might be required to pay shippers for losses occurring in transporting such goods. He did not seek and did not receive a fire insurance policy. He received an indemnity policy, referred to in the record as a "floater" and as "transportation and marine." It indemnified him for losses he was required to pay on goods destroyed in transit while being carried on one of his trucks. This policy was issued through Osborn Lange, general agents of defendant at Chicago, and was signed by Charles G. Olds, State agent and attorney at Detroit. It was procured for plaintiff by the Schwahn-Khuen agency at Saginaw. Some of the provisions of the policy become important. It was issued to plaintiff:

"On lawful goods and merchandise the property of others for which the assured may be legally liable while in the custody of the assured but only while contained in or on the following specified motor truck or trucks, while in ordinary course of transit.

Trade Name: G. M. C.

Year built: 1922.

Factory Motor Number: Motor No. 14965.

Tonnage: 3 1/2.

Limit of insurance: $3,000.00.

Rate: 2 per cent."

The transfer and assignment of the insurance was only permitted with the written consent of the company, as appears by the following language:

"And it is also agreed that no assignment, or transfer hereof shall, in any case, relieve the insured of the property hereby insured from any or all of the conditions expressed in this policy, and that this policy shall be void in case of its being assigned or transferred without the written consent of this company indorsed thereon."

As to the relation of the broker to the parties, it was agreed:

"It is a condition of this policy that any broker, person, firm or corporation who shall procure this insurance to be taken by this company, shall be deemed to be exclusively the agent of the insured in any and all notices, transactions and representations relating to this insurance or connected with or arising out of the same during its continuance."

Plaintiff claims that after their policy had been issued and delivered to him, he called up the office of the Schwahn-Khuen agency, and being unable to get either partner, requested the girl who answered the 'phone to transfer the insurance from the G. M. C. truck to a Union truck, which she agreed to do, and that afterwards Mr. Schwahn informed him it had been done. The Union truck was the one destroyed with its load. Mr. Schwahn, who was called for cross-examination under the statute, denies this conversation. Upon the subject of the authority of the agency, he testified (and he is the only witness who testified on the subject):

"Q. Well, when a transfer was to be made, how was that done?

"A. We would write in for it.

"Q. To the Glens Falls Insurance Company for their consent?

"A. Yes, sir.

"The Court: It was not the custom to transfer from one truck to another without getting the company's indorsement?

"A. No, sir.

"The Court: You had no authority to do that yourself?

"A. No, sir. We would send it to the general agent at Chicago. Then it would come back to Detroit and the agent there would sign it to make it legal and it would come back to Detroit for the State agent, he is both State agent and attorney to countersign it. I acted as a broker for Henne Company. And doing that I was acting differently then on the issuing of insurance on a house. In one case I issue the policy to them and in the latter case I am broker for the assured and acting as agent for the assured. And at that time I did everything I could for Mr. Henne to effect the insurance he wanted me to get for him. I acted for him in this matter as his broker.

"The Court: Did you have a certificate from the Glens Falls Insurance Company giving you the authority to represent them?

"A. Just fire insurance. We had no authority in this kind of insurance.

"Q. You were not their agent for this kind of insurance?

"A. No, sir.

"Q. And the policy provides itself, you are the agent for the assured in this kind of an insurance?

"A. Yes, sir."

The certificate of authority issued by defendant to the agency gave the agency and only gave the agency:

* * * "full power and authority to receive proposals for insurance against loss or damage by fire, lightning and tornado in Saginaw, aforesaid and vicinity to fix and determine rates of premium, to receive and receipt for moneys, to countersign, issue, renew, consent to the transfer change by indorsement in writing and to cancel policies of insurance signed by the president and secretary of said company, subject always to the rules and regulations of said company and to such instructions as may be given from time to time by its officers or authorized representatives. This appointment to continue during the pleasure of said company."

The Schwahn-Khuen agency had the usual license issued by the insurance commissioner on request of defendant.

My Brother construes section 6, chap. 3, pt. 2, Act No. 256, Pub. Acts 1917 (Comp. Laws Supp. 1922, § 9100[92]) to inhibit one from acting as insurance broker in Michigan. The section cited does not expressly prohibit the conduct of a brokerage business, and section 13 of the same chapter (§ 9100[99]) expressly authorizes the licensing of brokerage business in unauthorized companies. But whether such construction is the proper construction of this section is unimportant. If the Schwahn-Khuen agency violated the statute when it acted as broker for plaintiff, and I do not desire to be understood as so holding, that fact would not render defendant liable on a contract of insurance it never entered into, upon another truck than the one named in the policy which it actually issued. If the agency acted as broker for plaintiff in procuring the insurance, and the only testimony in the case is to that effect, it is manifest that it could not by its acts bind the defendant company which was not its principal. Bonewell v.Insurance Co., 167 Mich. 274 (Ann. Cas. 1913A, 847); Leach v.Insurance Co., 239 Mich. 10.

Let us lay aside the question of rights of the parties if the agency acted as a broker, and consider the rights of the parties if the agency acted as local agent for the company, and in no way acted for or represented the insured. Let us see what the legal rights are if the agency was agent for the company and not broker for the plaintiff. Let us accept plaintiff's premises and see if his conclusions are right. Plaintiff claims that he requested the girl in the agency's office to transfer the policy from the G. M. C. truck to the Union truck and that Mr. Schwahn afterwards told him this had been done. The policy, which was the contract between the parties, as appears by the provision I have quoted, required that such transfer could not be made without the written consent of the company indorsed on the policy, and provided unless it was so done, the transfer should be void. It is admitted the transfer was not so made. So that unless a local agent, who solicits insurance, writes and issues policies, collects and remits premiums, with the authority usually incident to a local agency, may bind the company by waiving such important provisions of the contract, such transfer in the language of the policy "shall be void." That a local agent, who is authorized to solicit insurance, sign and issue policies, collect and receipt for premiums, has not the authority to waive the express provisions of the policy, has long been the settled holding of this court.Barry Finan Lumber Co. v. Insurance Co., 136 Mich. 42; Fisk v. Insurance Co., 198 Mich. 270; Gambino v. Insurance Co.,232 Mich. 561, (on rehearing) 234 Mich. 651; Serbinoff v. InsuranceCo., 242 Mich. 394. If some of the language used in Coverdill v. Insurance Co., 243 Mich. 395, is to be construed as going as far as plaintiff's counsel insists, it must be regarded not only as out of accord with these cases but also to be in conflict with the following language from section 1, chap. 3, pt. 2, Act No. 256, Pub. Acts 1917 (Comp. Laws Supp. 1922, § 9100[87]):

"A solicitor is hereby defined as any person acting under express authority from an agent, having authority to appoint solicitors, to solicit insurance for such agent, but without the power or authority to issue or countersign policies orotherwise bind any company of which such agent may be the dulyauthorized representative."

It cannot be claimed on this record that the defendant company in any way held the agency out as possessing authority to change or modify its policies or to waive any of their provisions. Nor is the company estopped from asserting that its policy issued on a G. M. C. truck did not cover a Union truck. In Ruddock v. Insurance Co., 209 Mich. 638, 654, in holding that a contract of insurance contrary to the express terms of the policy could not be created by estoppel, it was said:

"To apply the doctrine of estoppel and waiver here would make this contract of insurance cover a loss it never covered by its terms, to create a liability not created by the contract and never assumed by the defendant under the terms of the policy. In other words, by invoking the doctrine of estoppel and waiver it is sought to bring into existence a contract not made by the parties, to create a liability contrary to the express provisions of the contract the parties did make."

The judgment is affirmed.

NORTH, C.J., and FEAD, WIEST, and SHARPE, JJ., concurred with FELLOWS, J.