Opinion · Supreme Court of the United States
Insurance Company v. McCain
96 U.S. 84
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1878-01-28
- Topic
- general
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..
Citator
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Headnotes
- Business & Corporate Law — Apparent Authority A principal that holds out another as its agent cannot disavow responsibility for that agent's acts; parties dealing with an appointed agent in the business for which he was appointed may rely on the continuance of his authority until they are informed that it has been revoked.
- Business & Corporate Law — Special Instructions Limiting General Agent's Authority Special instructions limiting the authority of a general agent, whose powers would otherwise be coextensive with the business entrusted to him, must be communicated to the party dealing with the agent; absent such communication, the principal is bound to the same extent as if the instructions had not been given, because good faith requires that a principal be held by the acts of one whom he has publicly clothed with apparent authority to bind him.
- Business & Corporate Law — Ratification by Silence A principal's silence upon receiving notice that its agent had stated a premium was paid is equivalent to an adoption of the agent's act and precludes the principal from later disputing it; a company that retains the benefit of a premium while the insured lives cannot repudiate the payment after the insured's death.
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.