this is based upon his possession of the document for purposes of delivery, and his instructions to deliver it, and consequently his power does not extend to subsequent premiums or premium notes.1

It might, however, be necessary for the insured to give some evidence that such a custom was known and permitted by the company, if the policy expressly denied the agent this power, for it has been held that the soliciting agent has no authority simply by virtue of his position to accept anything but cash; and of course he would have no implied authority to take in payment personal property, as, for instance, a horse.3

2

2. Where the application for insurance is filled in by the soliciting agent of the insurer, and true answers of the insured, given orally, to the interrogatories contained therein are erroneously or improperly written by the agent at his own suggestion, without carelessness or fraud or collusion on the part of the assured, the insurer is responsible for the mistake, and is estopped from seeking to convert its own act into a ground of defense against the insured for an alleged breach of contract. In such a case the courts are disposed to hold the company, no matter what the policy or the application may provide to the contrary, on the ground that the act is purely the act of the company, and that an estoppel derives its sanction from a rule of law and not at all from the contract itself, which indeed its ostensible object is to subvert.1

If, however, the erroneous statements in the application are the result of fraud on the part of the insured, or collusion with the agent, the equities of the insured are no better than those of the company, and the company is not estopped from insisting upon the letter of the written contract. Thus where the

1 Critchett v. Am. Ins. Co., 53 Iowa, 404; s.c., 36 Am. Rep. 230. Walsh v. Hartford Ins. Co., 73 N. Y. 5. Life Ass. Co. v. Ward, 17 C. B. 645. Roehner v. Knick. Life Ins. Co., 63 N. Y. 160.

'Messelback v. Norman, 122 N. Y. 578. Tubbs v. Dwelling House Ins. Co., 84 Mich. 646. Continental Ins. Co. v. Pearce, 39 Kans. 396. O'Brien v. Home Benefit Society, 117 N. Y. 310. Miller v. Phoenix Mutual Life Ins. Co. v. Continental

2 Raub v. N. Y. Ins. Co., 14 N. Y. Ins. Co., 107 N. Y. 292. State Rep. 573. Wilkinson, 13 Wall. 222. Hoffman v. John Hancock Mut. Ins. Co. v. Chamberlain, 132 U. S. 304.

Co., 92 U. S. 161.

insured told the agent that he could write the answer as he liked.1

2

The Maryland case, like others of a similar kind, is not to be commended; for the insured in the Maryland case knew that the company was to be misinformed as to his age, and, although he was an ignorant man, the company ought not to have been held responsible for his moral degradation, whether the act of writing the erroneous answer was the act of the agent or not.

If the mistake in the application constituting the alleged breach of warranty occurs because of the omission of the insured to read the application, and he is not reasonably deterred from reading it by affirmative representations of the agent, or by inability through blindness or ignorance, the insured ought unquestionably to be held responsible for the written statements which he has signed as the basis of the contract; and clearly an omission to read the application is prima facie carelessness 3 on his part.

3

On this last point, however, the courts have divided, and in many cases it has been held that the company is bound by the act of its agent in writing the mistake into the application, although the error is perfected through the carelessness of the insured in neglecting to read what he signs.

3. If the statements of the application are what the insured intended them to be, and the mistake arose through ignorance of the meaning of the terms employed, which were used at the suggestion of the agent, the insured ought to be held to the written contract, and the policy avoided, if the agent is only an ordinary canvassing agent, although such agent be styled a general agent with power to select sub-agents; for, as we have seen, soliciting agents of life companies are in law nothing but special agents, without authority to alter policies by their representations or promises. They have no right to interpret the terms of the application or the policy. The law determines what the written language means, and an agent who has no

authority to make a contract has no authority to unmake one by expressing his opinion of its meaning.1

It must be conceded, however, that in many cases the contrary view has been accepted by the courts; namely, that by allowing any representative, though only a special agent, to take an application for insurance, the company impliedly gives an authority to him to interpret the meaning and effect of the interrogatories contained in the paper, and also of such answers as may be made to them by the applicant: and this view has in certain instances seemed to receive the sanction of judges of the highest eminence. See, for example, the language of Chief-Justice Ruger in the New York case, and of Justice Hunt in the Federal case.?

Whatever may be the sound rule on this point, the companies, in consequence of divers decisions against them, are apt to give an express notice to the insured, in the application or premium receipt, of a restriction upon the agent's authority to interpret or otherwise change the terms of the contract; and by such notice of restriction, if true, the insured will be bound. Thus where in answer to the question contained in the application, "Are you now insured in any other company?" the applicant truthfully stated to the agent that he had certain other insurance, but the agent wrote "No," it was held that the company was not liable; for on the back of the policy was a notice that no agent had the power to bind the company by receiving any representations or information not contained in the application. And this case has lately been affirmed on appeal by the New York Court of Appeals.3 These cases are on the border line, and other courts upon similar facts are disposed to consider the doctrine of waiver as dominating the contract restrictions. Similarly if the assured knows or has agreed that the agent is a special agent, without

Allen v. German Am. Ins. Co., 123 N. Y. 6. Devens v. Mech. & Traders Ins. Co., 83 N. Y. 168.

2 Miller v. Phoenix Mut. Life Ins. Co., 107 N. Y. 296. N. J. Mut. Life Ins. Co. v. Baker, 94 U. S. 610.

3

McCollum v. Mut. Life Ins. Co., 55 Hun. 103; s. c., 124 N. Y. 642 (1891). Wilkins v. Mut. Reserve

Fund Life Asso., 54 Hun, 294. Kabok v. Phoenix Mut. Life Ins. Co., 4 N. Y. Suppl. 718.

Tubbs v. Dwelling House Ins. Co., 84 Mich. 646 (1891). Bushaw v. Women's Mut. Co., 8 N. Y. Suppl. 423. Baumgartel v. Prov. Wash. Ins. Co., 61 Hun, 118 (1891).

power of controlling the terms of the contract, the knowledge by such agent of a forfeiture at the time the contract is closed will not bind or estop the company. This is clearly sound.1 If, however, the agent is in fact a general agent, with authority like an officer of the company to make and modify contracts in his discretion, his interpretation of the questions and answers in the application, if relied on by the applicant, will bind the company, as will also knowledge on his part of a cause of forfeiture at the time the contract is closed. The Mahone case has been made an authority, but improperly, for the extension of the rule announced in it to cases where the agent had in fact no such extensive authority.

Knowledge by the soliciting agent of facts constituting a ground of forfeiture at the time of the inception of the contract ought not to avail to estop the company, even in conjunction with the receipt of premium or delivery of the policy, unless the agent communicate the knowledge of forfeiture to one having discretionary power to waive the conditions of the contract.

The acquisition of such knowledge does not in any way enlarge the powers of the special agent, though if he already had the authority to alter the terms of the contract it might then become a factor in operating an estoppel. If the knowledge by the special agent of a ground of forfeiture could work an estoppel simply because he was doing something for the company when he acquired it, then the knowledge of his clerk or office boy might accomplish the same result, and the conclusion would be reached that the binding obligation of a solemn written contract may be destroyed by the casual information acquired or said to be acquired by a wholly irresponsible person doing some trivial act for the company without the connivance or knowledge of the company or any of its commissioned agents. Estoppel is a doctrine to prevent fraud. Knowledge to operate as a waiver of contract rights should only be imputable to the company when possessed by some one who is fairly a substitute for the company in the premises.

The reasoning of the Iowa court in Boetcher v. Hawkeye 1 Kenyon v. Knights Templar, etc., Asso., 122 N. Y. 247. But see Fitz

patrick v. Hartford Annuity Co., 56 Conn. 116.

2 Ins. Co. v. Mahone, 21 Wall. 152.

Insurance Company, that the soliciting agent of the company should not be deemed the agent of the assured, though the policy provided that he should be, is weighty; but their conclusion, that knowledge of forfeiture by the special agent should bind the company, is not so satisfactory.1

This case, however, is only one of a large class, and serves to illustrate the proposition that some of the judges have enforced the doctrine that notice to an insurance agent is notice to the principal in a manner unknown to the general law of agency. There can be no question that some of the courts have gone too far in this direction; and for confirmation of this view the recent and carefully considered opinions of the House of Lords should be consulted.2

A distinction may perhaps be made between the case where it is sought to destroy a condition of the contract altogether by knowledge possessed by the agent, and the case in which the agent is held to be a suitable representative for receiving a notice pursuant to the terms of the policy. In an English case where the policy provided that notice must be given to the directors and their consent obtained for non-residence, and the assignee of the assured gave notice to the local agent of the company that the assured had left the country, and thereafter paid his premiums for several years upon the policy, it was held that the insurers, who had received these premiums in the regular course of business, were liable, although in fact the agent had no authority to give such a permit.3

§ 94. Effect of Stipulations in the Policy in Respect to the Authority of Canvassing Life Agents. -Where the application gives truthful notice to the insured that the agent of the company has no authority to waive conditions or forfeitures, or where the assured expressly stipulates that the written statements of the application shall be the only statements upon which the contract is made, any errors of the agent in transcribing the answers will not estop the company, except as the assured is able to make out a clear case of estoppel by reason of acts of the agent within the actual scope of 1 Boetcher v. Hawkeye Ins. Co., 47 Wing v. Harvey, 5 De G. M. & G.

Iowa, 253.

2 Blackburn v. Vigors, L. R., 12 App. Cas. 531.

3

265.