Warren v. New York Life Ins. Co. , 40 N.M. 253 ( 1936 )

I cannot agree with the majority on the first point decided. Appellant first contends that the facts prove there was a rescission of the insurance contract between the parties as a matter of law to be decided by the court, and therefore the case should not have been submitted to the jury.

That there was no actual mutual rescission between the insured and the company is apparent from the facts. He did not cash the check. He did not expressly consent to the rescission. Therein lies the distinction between this case and the case of Kincaid v. New York Life Insurance Co. (C.C.A. 5th) 66 F.2d 268, which the appellant cites as authority to support its theory. In the Kincaid Case the insured cashed the check, thus expressly assenting to the rescission.

In the instant case we must find rescission, if at all, in agency express or implied. This I cannot do. One of the parties to a contract cannot rescind the contract without the other's express or implied assent. 6 R.C.L. 921. The insurance company, acting alone, could not rescind the contract. It required the assent of the insured.

To concede appellant's contention, we must presume that Mrs. Warren, in cashing the check, was acting as appellee's agent, or, if not his agent, that he later ratified her acts, and in so doing such ratification was as effective to consummate the rescission as though he alone had cashed the check.

The wife, in cashing the check, did not act as the authorized agent of the appellee. The evidence conclusively shows that in cashing the check she did so without the knowledge, consent, or authority of her husband. The jury so found from the facts. A wife is not as a matter of law the general agent of her husband. No presumption is to be indulged as to her agency because of his illness, nor did his illness vest in the wife a general or unlimited authority as to all his affairs. Mrs. Warren was not the agent of appellee by virtue of the power which the wife has, in certain cases, to charge her husband, in procurement of necessaries for herself or the family.

It may be usual for a wife to purchase food for the family and bind the husband in contract for the purchase price. However, it is not usual for a wife to cash a check payable to the husband and thereby rescind the husband's insurance contract. No implication can arise from the circumstance that the wife cashed the check. The check in its usual course came back into the hands of the appellant with an irregular indorsement. Appellant should have, upon noticing the irregular indorsement, inquired as to the right, power, and authority of the wife to indorse and cash the check, which act appellant now claims amounts to a rescission. It would be unreasonable and unsafe to extend the powers of a wife to bind the husband by implication or presumption to hold as a matter of law that a wife can cash a husband's check and thereby rescind the husband's insurance contract.

In the leading case of Benjamin v. Benjamin, 15 Conn. 347, 39 Am.Dec. 384, the court said: "A wife, as such, has no original or inherent power to make any contract, which is obligatory on her husband. No such right arises from the marital relation between them. If, therefore, she possesses a power in any case, to bind him, by her contracts made on his behalf, it must be by virtue of an authority derived from him, and founded on his assent — although such assent may be precedent or subsequent, and express or implied; and this is the light in which such contracts are universally viewed. When such authority is conferred, the relation between them and the consequences of that relation, are analogous to those in the ordinary case of principal and agent. And that she has the capacity to be constituted, by the husband, his agent, and to act as such, equally with any other person, there is no doubt. In Fitz. Nat.Brev. 120. G. the law is thus laid down: `A man shall be charged in debt for the contract of his bailiff or servant, where he giveth authority unto the bailiff or servant to buy or sell for him: and so the contract of the wife, if he give such authority to his wife, otherwise not.' In Manby v. Scott, 1 Mod. 125, it is said, by Mr. Justice Hyde, that `a feme covert cannot bind or charge her husband, by any contract made by her, without the authority or assent of her husband, precedent or subsequent, express or implied.'"

Having no power to bind the husband by contract unless he had given his authority or assent, conversely Mrs. Warren could not rescind her husband's contracts. Appellant, who claimed a rescission of the husband's contract of insurance by the wife, failed to show that the husband had given such express assent. I refuse to say as a matter of law that the cashing of the check by the wife was a rescission binding on the husband.

Appellant then must resort to an implied assent or ratification. It is not always easy to determine what amounts to proof of the husband's assent, where it is claimed to be implied as in the instant case. Whatever difficulty there may be in the present case is of that character.

It is a familiar principle of the law of agency that every authority given to an agent, whether general or special, express or implied, impliedly includes in it, and confers on such agent, all the powers which are necessary, or proper, or usual, to effectuate the purposes for which such authority was created. It embraces the appropriate means to accomplish the desired end. Making the proof of loss for appellee did not clothe the wife with any implied power to cash the check and thereby rescind the insurance contract.

Appellant claims that appellee did ratify what was done by his wife in not disavowing her act of cashing the check. It does not seem so. He was not obliged, at his peril, to take steps which might charge her with forgery. The appellant knew, or ought to have known, of the irregular signature. It took no steps to protect itself. Certainly, under the circumstances, there was no ratification as a matter of law. The court did submit to the jury the question in respect to the subject, as a matter of fact, and the jury found against appellant. The minds of reasonable men can honestly and clearly differ on the duty of appellee under the circumstances. The jury differs with the majority view. The trial court differs. I cannot agree. Are we all unreasonable men?

Where reasonable men can differ, the question then becomes one of fact to be determined by the jury. The law is clearly stated in Corpus Juris, as follows:

"As to Ratification. Where competent evidence adduced is such that reasonable men could draw different conclusions as to whether or not there has been a ratification of unauthorized acts or contracts, the question is one of fact to be determined by the jury under proper instructions from the court, and it is error to withdraw the case from them by instruction or by direction of verdict. But if there is not sufficient evidence of ratification or if the evidence is such that only one conclusion could be drawn therefrom by reasonable men, the question becomes one of law for the court and should not be submitted to the jury.

"What is a reasonable time within which a principal must object to acts of his agent or be held to have ratified them is ordinarily a question of fact for the jury." 2 C.J. 965 and 966.

It was the province of the jury to determine from the facts whether or not the husband ratified the acts of the wife in cashing the check and, upon discovery of her act, in not disavowing the same. The jury found against appellant. On this point I feel bound by the verdict.

I concur with the opinion of the majority as to the appellant's second contention of error, and am therefore in accord with the result.