Burns & Reilly Real Estate Co. v. Philadelphia Life Insurance

Citations

• 239 Pa. 22
• 86 A. 642
• 1913 Pa. LEXIS 517

Syllabus

<p>Insurance — Life insurance — Authority of general agent — .Making of loans.</p> <p>A brokerage firm acting for clients approached the general agent in its own city oí a life insurance company of a distant city, for the purpose of making application for mortgage loans for its clients. The agent had authority to solicit insurance and take applications therefor and to receive premiums in payment for insurance but he had no authority to deal with the matter of loaning money by the company upon mortgages, or with the making of loans in any way. He perhaps had in his possession blank forms upon which application for loans could be made. Upon these forms the brokerage firm made applications for the mortgage loans, and these were sent to the home office of the company. At the time this was done the agent represented to the brokerage company {hat as a condition of obtaining the loans policies of insurance would have to be taken out on the lives of their clients. Applications for insurance containing no reference to the loans were accordingly signed by the clients, and the money to pay for the premiums for the first year was advanced for the applicants by the brokerage company, and paid over to the agent. Subsequently the company declined to make the loans. The agent did not refund the money to the brokerage' firm although he- agreed to do so if the loans were not made. There was no evidence that the company knew of the action of the agent or had ratified it. The brokerage company brought suit against the insurance company to recover the premiums paid to the agent. Held, (1) that as the contract of insurance was between the defendant company and the applicants, the plaintiff company had no standing to maintain the action; (2) that if the applicants were entitled to the policies which the insurance company refused to deliver, they, and not the brokerage firm were the proper parties to maintain the suit; (3) that the insurance company was not bound by the act of its agent in