Robinson v. International Life Assurance Society of London

By the Court, Daniels, J.

It appeared, by the evidence given upon the trial of this cause, that the defendant, at the time of the issuing of the policy in suit, and at all times since then, was an insurance corporation, created by an act of the English parliament. And as that was its legal character, although it had complied with the laws of this state providing for the manner in which foreign insurance companies may carry on and transact the business of insurance within this state, it nevertheless still remained and continued an English corporation. The law of this state, however, conferred authority upon the defendant only to transact its business within the state of Yew York. It could not, nor did not, authorize or empower it to appoint an agency, or carry on its insurance, within the state of Virginia. Whatever it did, in that respect, was done by virtue of the laws or comity of that state. And, for that reason, no particular reference will be required to the provisions of the statute, under which foreign insurance companies are permitted to carry on the business of insurance in the state of Yew York.

It is sufficient, for the purposes of this case, to assume that the defendant was lawfully engaged in that business in this state, and that it had legally and properly created and maintained its agency for that purpose. And that the agency here, by a proper exercise of its authority, had appointed the agent at Richmond to transact the business of the defendant and its Yew York agency, required to be done at that place. But even these assumptions, added to the circumstance that the defendant had organized a local board of directors at the city of Yew York, having authority to issue policies, and adjust losses, without consultation with the corporation itself, could not have the effect of changing the nature of the corporation, under which all this was performed. The board was organized, and the agency was created, by the act and under the authority of the corporation. The local board and the *465agency combined, did not form or constitute a corpora^ tion, but, simply, the local means or agency through which the corporation carried on and transacted its business in this country. When the local board and agency issued a policy, collected a premium, adjusted a loss, or appointed a subordinate agency, it was not done for itself, but for the defendant. And the power exercised in performing either, or all of those acts, was derived from, and used for, the defendant. Eb matter how formal or complicated such a local organization may be; it can only possess and exercise the power conferred by its foreign charter and the laws of the state upon the corporation itself. And when it makes use of such powers, it does so not as an independent body, or in the nature of a subsisting corporation, but as an agency, merely, of the corporation under which such organization may have been effected. This is entirely apparent, from the facts that, without the charter, and the laws of the state relating to such corporation, the local board could be neither regularly organized or acquire the power of acting at all. And in case these laws were to be repealed, and the charter were withdrawn, or the corporation were to be otherwise dissolved, the local board and agency would, necessarily, from that time cease to exist. It is not intended to be affirmed, that the right of foreign corporations to transact business in this state, is absolutely dependent upon the existence of some statutory regulation in their favor. But only that the transaction of such business is dependent upon a compliance with the provisions of those statutes, while they may be maintained by the legislative authority of the state. But it is maintained that, while these laws are in existence, a compliance with their requirements, whether it be by a mere agency, properly so called, or by a board of local direction, having a general charge and control over the American business of the corporation, without *466any immediate dictation or control from the corporation itself, constitutes, in fact as well as in law, a mere agency, and nothing beyond that. And this, is insufficient to change the domiciliary nature of the corporation itself, under whose power and authority, whether acquired by its foreign charter, or the laws of the state relating to foreign insurance companies doing business here, this formal as well as efficient organization may have taken place. This organization was merely the medium through which the defendant carried on and transacted its American insurance business—the means through which it was done, not the body itself, which did that business. Accordingly, when insurances were made, as is shown by the policy issued in this instance, it was the defendant that made the insurance, and was to receive the premium for it, and pay the loss arising under it, and not the agency and board of directors existing in the city of New York. It is true the mon'ey would pass into the hands of the local agency, and under the control of the local board, when premiums were paid, and from them, in the payment of losses, accepted and adjusted by them, but still it would be all the time received and disbursed as the money of the defendant, in whose behalf, and under whose authority, the local board and agency alone had the power of acting.

As the contract of insurance made in this case was necessarily the contract of the defendant, therefore, when the war, or southern insurrection arose, it was not one which existed between a loyal citizen and a rebel. But of necessity between a neutral and a rebel recognized by the defendant’s government as a belligerent. And this recognition, though not binding upon or adopted in a friendly spirit to the government of the United States, was'binding and controlling as authority upon the defendant. As a contract between a neutral and a rebel, or, as the defendant’s government designated him, a belligerent, it was. *467neither annulled nor suspended by the proclamation of the president, or the laws of congress. For they were not expressly or by necessary implication made applicable to cases of that character. The plaintiff was not, therefore, prevented from maintaining this action by any thing rendering illegal the insurance which was eiiected in this case.

But by the terms of the policy, the right of the assured to depend upon it as an insurance, was rendered conditional upon the performance of the stipulations requiring payment of the premiums. By the written appointment of the agent at Bichmond, no authority was conferred upon him to receive payment of insurance premiums. That appears to have been derived from what were called renewal receipts, which were forwarded from the agency at Yew York to the local agent, and by him delivered to the assured as the premiums were paid. Even this practice was discontinued after the early part of the year 1861. This discontinuance, did not arise out of any disposition, manifested by any act of the defendant, or the Yew York agency, to terminate its policies, or to decline payment of its premiums, but on account of their inability to communicate readily with the local agent at Bichmond. When it took place, the means for carrying on such communication had been interrupted and suspended by the insurrection. The facilities before that time supplied by the mails and express companies traversing the country had necessarily been withdrawn, on account of the hostile and dangerous condition of the southern states. And the only remaining means of communication was that which was supplied by individuals occasionally passing around or through the lines of the military forces.

The agency at Yew York appears to have been of the most complete and general character, but still, as already shown, merely an agency. It therefore had the power to *468create and appoint subordinate agencies, wherever in its judgment the business of the defendant required them to be located. And this it could do either by way of writing or by parol. And when the appointment, was made by writing, and nothing limiting the action of the local agency was contained in it, the power of the local agent could afterwards, without any legal impropriety be enlarged by parol. In this respect the Yew York agency was unrestricted by any limitations placed upon its action by the defendant, or the instruments used by itself for the creation of the subordinate local agency. For while the written power of appointment issued to Cowardin in this case, conferred certain authority upon him as agent for the defendant, not as agent for the Yew York agency at the city of Richmond, it contained nothing preventing additional authority being given to him, either by the Yew York agency or by the defendant itself. Yeither was any thing of that nature contained in the renewal • receipts. For, by the printed instructions issued to him by the Yew York agency, he was only prohibited from receiving premiums without a regular renewal receipt, in the absence of special authority for acting otherwise from the Yew York office. This agency could, therefore, authorize the subordinate agency to receive the premiums accruing on the defendant’s policies without supplying him with renewal receipts for that purpose. And in the condition of the country, after the premium was paid in June, 1861, which rendered the transmission of these renewal receipts impracticable, it was claimed on the part of the plaintiff that such authority was actually conferred.

Evidence was given upon the trial tending to substantiate this claim, and on the part of the defendant to resist it. This evidence was of a conflicting nature, and as it was fairly submitted to the jury, this court, at the present time, has no power to interfere with their conclusion upon that subject. They have found that the authority was *469conferred, substantially, of course, as the evidence on the part of the plaintiff tended to establish it. And if it was, it amounted to a general authority to the local agent at Richmond to receive the premiums without renewal receipts, and without specific directions as to what he should receive them in. It was therefore a general authority to him to collect the premiums accruing in the defendant’s favor upon the policies which it had previously issued. And this authority, under the well settled principles of the law of agency, the agent became bound to his principal to make use of according to the ordinary course of the business he was employed in, and the settled usages, if any were found to exist, relating to the subject. He could not therefore bind his principal, or satisfy the powers of his agency, by accepting property for the premiums; for that would convert the power to receive payment merely, into an authority to traffic in merchandise. But from the nature of the power to receive payment, the agent necessarily derived the authority to accept whatever was generally used for the purposes of making payments in the locality where the debts were to be collected. As it has turned out, it would have been more profitable for the principal if the agent had collected the premiums upon this insurance in gold coin or treasury notes of the Hnited States. But when this authority to collect the premiums was exercised, it appears from the evidence that it could not be either conveniently or effectively used in that manner. For gold was shown to have disappeared almost entirely from circulation, and it is a matter of history that the insurrectionary authorities discountenanced the use of Hnited States treasury notes.

When this authority was given, which the jury have found was conferred upon the agent at Richmond, there was no immediate indication that any further opportunity would be afforded for communicating with him while hostile relations existed between the government and the *470rebel states. And it must, therefore, have been designed for his guide under circumstances at that time not fully anticipated or comprehended. The end to be obtained by the use and exercise of the authority, was to be the payment of the indebtedness accruing to the defendant. And if circumstances should arise requiring the exercise of judgment and discretion, in making the collection, it must have been intended that this agent should determine such matters for himself. On account of the impracticability of communicating either with the defendant or the general agency .located here for the procurement of special directions, such emergencies must, from the nature of the times, have been necessarily within the expectation of the general agency, and when they arose afterwards it was the duty of the special agent, to determine upon the best mode of securing the object of his principal, under the circumstances. His duty, as well as his authority, was to collect the debts maturing in favor of the defendant. How that could best be done, was necessarily left to his own prudence and judgment when the changes in the times rendered a determination upon that point indispensable to the exercise of his authority.

That such changes did -arise is clearly shown by the evidence. For soon after the agent at Bichmond was directed to collect the premiums without renewal receipts, the actual currency of that locality was supplanted by Confederate notes of the insurrectionary government. Although not made a legal tender for the payment of debts, all other species of currency was soon driven out of circulation by them. And after that, they were the financial means used for buying and selling property, and for creating and discharging debts; and while that was their character, and the premium upon gold and foreign exchange was not far above them, they were received by this agent in payment of the premiums due on this insurance. The uncontradicted evidence given in the case is that these *471notes were issued soon after the passage of the act providing for them, which was, on the 19th of August, 1861. And from that time they passed, equal to bank notes, and during the residue of 1861, and through 1862, they were known as Confederate money, and passed almost at par ■ at Richmond. The acceptance of this currency as payment of the premiums upon the policy in suit, spurious and unlawful as the currency itself was, very materially differed from the acceptance of payment in property, or in counterfeit notes or the notes of insolvent banks. For the acceptance of property was not within the spirit or scope of the agency, and the bills of insolvent banks and counterfeit notes would be wholly devoid of value, and therefore no payment whatever, in any just senseftf that term. But these notes were not of that description. For they had a circulating value, at the time the agent received them, and were used for all the ordinary purposes of currency. While in that condition, he received them as payment, and from the hopeful account given by him of the prospects of the Confederacy, contained in his letter of June, 1861, he undoubtedly did so’ in good faith, believing he was promoting his principal’s interests by doing so. From the nature of the power which the jury have necessarily found was conferred upon him, the circumstances that must have been expected to attend the execution of it, the emergency he afterwards encountered, when the previous currency of his state was practically excluded from circulation by that which was issued by the Confederate authorities, the premiums upon this policy "were in judgment of law paid, when the defendant’s agent received the amount due for them, in these notes. It was the only feasible mode under the circumstances existing at that time, in which the premiums could be collected by him, and as it had been made his duty to obtain them payment, he was necessarily authorized to receive it in that manner.

*472But even if that authority were not a necessary incident of the power conferred upon him, still as he was authorized to collect the premiums, his acceptance of Confederate notes for the amount of them discharged the assured. For, under the circumstances existing" at the time when the authority to collect was conferred upon him, it could neither have been expected nor intended that the identical currency received by him should be remitted to the general agency at the city of Hew York. This currency, although valuable at Richmond, was worthless at Hew York. The only mode, therefore, in which the value it had at Richmond could be transmitted to Hew York, was by purchasing gold or foreign exchange with it, and it appetrs from the evidence that it was capable of being so used. In addition to this, the course of business previously established between Hew York and the Richmond agency was for the agent at the latter place to make up his accounts, and remit his collections once in each month, which was inconsistent with the obligation or expectation that the identical moneys received by him were to be remitted to the agency at Hew York. On the contrary, the notorious and general course of business, in cases of that description, was to purchasese exchange with the local currency, and in that manner transmit its value to the place to which it was to be forwarded. Hot only the state of public affairs, but the customary mode shown to have been adopted in the transaction of this business, also indicate that it could not have been intended that the local currency used and received for the payment of debts at Richmond should be remitted in kind to Hew York. On the contrary this was received for the convenient transaction of the agent’s business at the place where it fulfilled all the purposes and offices of a monetary currency. And accompanying its receipt was the corresponding duty to invest it in such funds or commercial paper, as would enable him to transmit its local value to the gen*473eral agents whose business was carried on at a place where that local value had no existence.

Under this relation and obligation of the local agent, he became the defendant’s debtor for the value of the Confederate currency at the time and place when and where it - was received by him. And that obligation can only be effectually discharged by transmitting or paying that value in lawful money or its equivalent to the defendant’s general agents at the city of Hew York. By the acceptance of the premiums in Confederate notes the agent discharged the assured, but, at the same time, under his obligations arising out of the peculiar circumstances of the case, and the previous course of business between himself and the defendant’s general agency, he became the defendant’s debtor for the amount received, with the duty of remitting it in such a manner to the general agency at Hew York, as to transfer the full local value for the time being received by him to such agency.

The portion of the answer to the sixth cross-interrogatory propounded to the witness Cowardin was properly excluded. It was not evidence tending to prove any fact whatever in the case. But it consisted merely of the supposition of the witness, which in no sense constituted evidence of the existence of the fact it related to.

Ho ground is presented by the case in this action which will justify a reversal of the judgment recovered by the plaintiff; it should, therefore, be affirmed.