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The American reports: containing all decisions of general ..., Volume 36 online

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[A minor question omitted.]

The question we propose to consider, and upon which the de-
termination of the case turns, is this: Is defendant, without regard
to its character as a school corporation, liable to plaintiff upon the
facta of the case? The question as thus stated will require us to
regard defendant as standing in this case in the same position as to
rights and liabilities as a natural person. We will proceed to its
consideration.

The city is charged by its charter with the duty and p5wer to
grade and construct streets and sidewalks. In the exercise thereof
the ordinance under which it is claimed that defendant is liable in
this action was passed. There can be no dispute upon these
positions.

The manner of exercising the power is left largely to the discre-
tion of the city government. It may cause the work to be done,
and assess the cost thereof as a special tax upon the lots abutting
upon the streets to be improved- It may require the lot-owners
to make the improvements, and in case of their default cause the
work to be done and assess a special tax upon the abutting lots to
pay for the improvements. The city, it is very plain, is clothed
with authority to determine whether the improvements are proper



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m IOWA,

a%j of Keokok v. Independent District of Keokuk*

and demanded by the public, and the character and extent thereoi
It may order the improvements to be made, and prescribe the time
and manner of their construction. When it has exercised its author-
ity thus far it must determine another question, namely: In what
manner shall the money be raised to pay for the work, or what fund
shall be used for that purpose? The city may assess special taxes
upon abutting lots in order to raise a special revenue to pay for the
work. When this is done it is very plain that the improvements
are made and paid for by the city in the exercise of its municipal
authority. The owners of lots abutting upon the streets improved
are charged with no duty touching the work other than the pay-
ment of the special tax assessed upon their property. They have
no other or greater responsibility as to the improvements than
other tax payers. The case is simply this. The city in the exer-
cise of its lawful authority causes the improvement to be made,
and pays for it out of the funds raised by a special assessment upon
the abutting lots ; the lot owner supplies the revenue from which
payment is made. It is very plain that the property holder is not
liable for failure to construct or keep in repair the street or side-
walk.

In the case before us, the ordinance of the city provides that the
lot owner may be required to do the work. Of course, upon his
compliance no assessment can be made by the city. No question is
raised as to the validity of this provision of the ordinance. The
question next presented is this. Does the provision of the ordi-
nance just stated impose liability upon the lot owner for injuries
sustained by reason of the sidewalk not being repaired, after he has
been required and notified to make the repairs ? In this case the
necessity for, and character of, the repairs, and time and manner of
doing the work, are determined by the city. Instead of assessing
the cost of the improvement upon their lot in the first instance,
the owner is called upon to do this work. In this case the city pur-
sues a difiEerent manner of causing the improvement to be made*
Instead of exercising its power through officers or contractors to
employ workmen, it requires the owners to do what the officers of
the city or contractors would do in other cases. Now, under what
authority does the lot owner in this case make the improTementf
Clearly, the authority of the city. For whom is the work done?
The city. The owner then, as the agent of the city, is authorized
and required to make the improvement. In this case the city sim-



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JUNE TERM, 1880. 229

City of Keokuk v. iDdependent District of Keokuk*

ply punaes a coarse, in caasing the improvements to be made,
^hich dispenses with taxation therefor, either general or special.
It is anotl^er method of providing for the payment of the cost of
the improvement The lot owner may do the worlc, and thus es-
cape taxation, or he may do the work in discharge of his liability
for assessment for the cost thereof. The case may be stated in
other and plainer words, namely: The city causes the work to be
done, and the lot owner pays for it instead of being taxed for it
^He lot owner is assessed with the work, instead of being assessed
^ith a money tax. All the difference between £he cases where the
lot owner does the work and where the city officers do it, is in the
Method of accomplishing the improvement and paying for it All
^^tters pertaining to the authority to make the repairs, and the
Purposes thereof are the same in each case. In each case it is
^yoaiij plain that liability for the injuries resulting from the non-
/^r/brmance of the work rests, where the authority to do it is found,
^tt the city. The lot owner, in doing the work, stands in the posi-
^^ of a tax payer making payment of taxes. If he refuses to do
G w^orfc^ he simply fails to pay his taxes in a manner which the
/ ^^^y lawfully require, but he is not liable for injuries resulting
^ defective sidewalks which were not repaired, for the reason he
vauot j^ayhis assessment, either of labor or money. Who ever
^^^ ^htfct a tax payer of a city would be liable for injuries result-
5 «t>0[^ the failure of the city to make improvements, because the
.^^^y owner refused to pay his taxes, and thus supply revenue,
r^^^ ^ "^hich the city was not able to do the work ?
- .. ^ ^>i^nance of the city provides that in case the lot owner
^ ^^^ **^fuse8 to make repairs of sidewalks required, he is liable to
. . ®* Without stopping to inquire into the validity of this pro-

. ^^ ^^'^e may say that it is but a method of enforcing the per-
a*>.<^^ of the work, which, we have seen, is in lieu of the taxes. It
pos^^ ^j^^ liability upon the lot owner for injuries resulting because
fiT^^^^^ is not done, which as we have seen, rests only where the
*^ ^*"^*^y to order the work is found.

^ ^Conclusions, as above expressed, are sustained by the follow-
^m ^^^^^0"<'i«8. Kirby v. Boylston Market Co., 14 Gray, 249;
Flynr^ ^r. Canton Co., 40 Md. 3i2; 8. c, 17 Am. Eep. ^OZ{Heeney
^' ^^^^^y 11 R. I. 456; 8. c, 23 Am. Rep. 602; Bustace v. Joh?is,
^^^^ ^;/arwc» v. Atchison, 16 Kans. 358.

*^ * The cases cited by counsel for plaintiff are based upon the



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230 IOWA,

Ciitcbett y. American Insarance Compiuij* % .*;

n^ligenoe of the lot owner iu using the sidewalk, or in permitting
obstruction thereon, or upon an obligation, by contract or other-
wise, resting upon him to keep the highway in repair. Se^ RotoeU
V. WilliamSy 29 Iowa, 210; Ottuviwa v. Parks, 43 id. l\^\. Chicago
V. Rabbins, 2 Black, 418; Bobbins v. Chicago, ^^bW. 657 -, Inhabit-
ants of Woburn v, Henshaw, 101 Mass. 193; s. c, 3 Am, Eep. 333;
Lowell V. Short, 4 Cush. 275; Lowell v. Spaulding, id. 277; Inhabit-
ants of Milford v. Holbrook, 9 Allen, 17; Brooklyn v. Brooklyn R.
R. Co,, 47 N. Y. 475; s. c, 7 Am. Rep. 469; Troy v. Troy, etc.,
R, R. Co., 49 N. Y: 657; Gridleyy. Bloomington, 68 111. 47; DuratU
V. Palmer, 5 Dutcher (29 N. J. L.), 544; Portland v. Ricfiardson,
54 Me. 46 ; Inhabitants of Lotoell v. Boston, etc., R. R. Co., 23 Pick.
24; Inliabitants of Stoughton v. Porter, 13 Allen, 191.

Iu our opinion the decision of the District Court is correct; it is
therefore affirmed.

Judgment affirmed.



Critchett v. America k Insurance Company.

(53 Iowa, 404.)

Iriaurance — extension of time of payment of premium — agent — iammt.

in insurance agent authorized to receivo applications and collect and remit
priemiums, but not authorized to issue policies, has no power to extend the
time of payment of renewal premiums. {See note, p. 235.)

ACTION on insurance policy. The opinion states the case. The
plaintiff had judgment below.

Lafferty & Johnson, for appellant.

John F. Lacey and M. E. Cults, for appellee.

Adams, C. J. The plaintiff claims that he was not in default at
the time the loss occurred, notwithstanding the non-payment of the
installment, which, by the terms of his note, fell due on the first
day of November, 1876. He claims that the company had extended
the time of payment. As evidence of such extension he testified
that one Kennedy, the agent of the company at Oskaloosa, near



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JUNE TERM, 1880. 231

Critchett v. American Insarance Company.

where he resided, agreed with him after the installment became
dne to extend the time of payment nntil he (plaintiff) should re-
ceive a certain pension ; that he received his pension March 8,
1877, and on the same day went to Kennedy's office to pay the in-
stallment due upon his insurance note, but did not find him, and
on the next day, about four o'clock in the afternoon, the property
insured was destroyed by fire.

The defendant denies that any agreement for extension was made
between the plaintiff and Kennedy, and introduced Kennedy as a
witness, who testified that none was made. Upon this point the
jury found against the defendant, and the evidence being conflict-
ing, their finding must be taken as conclusive. But the defendant
insists, that conceding that Kennedy agreed to an extension, the
defendant would not be bound by it, because Kennedy had no
authority to bind the company in that respect, and further, if he
had, that the plaintiff cannot recover, because the loss occurred
after the time as extended, and the plaintiff had not paid even then.

Kennedy's authority was shown by the certificate of his appoint-
ment introduced in evidence. From it it appears that he was
authorized to receive applications for insurance, and collect and
transmit premiums. Kennedy testified that he was not authorized
to issue policies, and it is not pretended that he was.

The court instructed the jury, in substance, that the plaintiff
would bo entitled to recover if they found that Kennedy agreed to
extend the time of payment, and timt the loss occurred within such
time. The giving of this instruction is assigned as error.

According to the terms of tlio policy, the company ceased to carry
the risk at the end of thirty days from the time the installment
became due. If the company continued to carry it, it was by reason
of a contract not contained in the policy, and that contract must
have been the alleged contract with Kennedy. Now, what precisely
was that contract, taking the plaintiff's statement as to what it was?
He Bays: "He (Kennedy) agreed he would give me time to get
my pension." From this it will be seen that Kennedy did not
undertake to contract that the company would, without payment,
continue to carry the risk after it had ceased by the terms of the
policy. It is doubtful, indeed, whetherjie even meant to bind the
company not to enforce payment of the installment before plaintiff
could get his pension. The words do not necessarily mean more
than that he would not himself enforce it



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^ IOWA.

Critchett v. American Insarance Company.

But we are of the opinion that if Kennedy had expressly con-
tracted that the company should carry the risk without payment
after it had ceased by the terms of the poUcy, such contract would
not have bound the company. There is no pretense that Kennedy
had any express authority to bind the company by any contract
whatever. He belonged to an extensive and well recognized cla^s
of insurance agents from whom the power to make contracts ig
withheld. If he had the power to contract m the name of the
company to carry the risk without payment after it had ceased by
the terms of the policy, it is because the law would imply sucli
power from the fact that he was authorized to collect and transmit
premiums. Butan agent employed to collect a claim does not thereby
have authority to bind his principal even to grant an extension of
time. Hutchings v. Ifunger, 41 N". Y. 155 ; Kirk v. Hiail, 2 Cart
(Ind.) 323 ; Corning v. Strong, 1 id. 329. Still less would such
agent have authority to bind his principal by a contract of insurance.
We have seen no case where the doctrine contended for by plaintiff
has been held. We do not say that where apolicy is delivered by an
agent without the prepayment of the premium, it will not take
effect though the agent have no authority to pass upon and accept
the risk, and even though the policy provides that it shall not take
effect unless the premium is prepaid. Where an agent is intrusted
with a policy for the purpose of delivering it, and does deliver it,
though in violation of a provision of the policy as to prepayment,
it has been held that the assured has a right to assume that prepay-
ment has been waived. Toung y. Hartford Fire Ins. Co., 45 Iowa,
377 ; s. c, 24 Am. Rep. 784 ; Bowman v. Agncultural Ins. Co,, 50
N. Y. 521 ; Mississippi Valley Ins. Co. v. Neyland, 9 Bush.. 430 ;
Sheldon v. Conn. Mut. Ins. Co,, 25 Conn. 9.

But the waiver rests not simply upon something said by the agent
which could be construed into an agreement of waiver, but uj)<)n
Romething done by the agent which he was employed to do. TIjc
authorities all agree that a mere agreement to waive prepayment
will not put a policy in force where it is not delivered. It is, tliere-
fore the delivery of the policy which constitutes the ground of waiver.

It IS true that in Hallock v. Commercial Insurance Co,y 2 Dutch.
268, a recovery was allowed although the premium had not been
paid nor the policy delivered. But the agreement for the insurance
had been made and the premium tendered, which the agent declined
to receive because the policy was not made out.



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JUNE TERM, 1880. 233

Critchett v. American Insurance Company.

In Trustees of Baptist Church v. Brooklyn Ins. Co., 19 N. Y. 305,
there was a parol contract for a renewal, but no payment of the re-
newal premium. It was held that the plaintiff was entitled to re-
cover. That case was substantially like the case at bar except that
the contract was made by the officers of the company and not by
an agent. The principle decided, therefore, was materially different.
Nor does the case at bar come within the rule held in Viele v.
Germania Ins. Co., 26 Iowa, 9. That was a case where the risk
was increased by the act of the assured contrary to the provisions
of the policy. It appeared, however, that the agent assented to
the use of the premises by reason of which the risk was increased.
Such assent was held to be a waiver of the forfeiture. The doc-
trine of that case is unquestionably correct, but it rests upon the
fact that the agent is made the judge as to whether a given use
is an increase of risk or not. Mr. Justice Beck, who wrote the
opinion, said: '*The agent is charged, by the terms of the policy on
which this suit is based, with the power to determine whether the
risk is increased. If he so determines, he may cancel the policy and
put an end to the contract. This {involves the necessity of exam-
ination of the condition of the insured property during the life of
the policy, and constant watchfulness to protect the interest of the
underwriters. If he determines that the risk is increased, such de-
termination is final. Such being the great and extraordinary powers
of the agent, it follows that he is clothed with the power to dis-
pense with conditions and waive the effect of breaches thereof in con-
tracts of insurance made by him. If he can determine that the
conditions of the contract have been broken, surely he can also
determine that they have not been broken."

In our opinion there is nothing in this doctrine that affords sup-
port to the proposition that an agent who has not the power to
make the contract of insurance can bind the company by his con-
tract to an indefinite postponement of the payment of a renewal
premium, and keep the policy in force in contravention of its pro-
visions. In Bouton v. The American Mutual Life Insurance Com*
pant/, 25 Conn. 542, the premium was actually paid to the agent,
though after the day it fell due. It was held that though the
agent had power to make the contract of insurance, and had power
to receive the premium when due, he had no power without an
express authorization to bind the company by receiving it after it
was due. Substantially the same doctrine was held by implication
Vol. XX XVI — 30



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^4 iOVVA,

Critchett v. ADjerican Insurance Company.

iu Insurance Company v. Norion, 96 U. S. 234. In that case a
recovery was allowed where the agent had extended the tim« of pay-
ment of premiam, but the right of recovery was made to turn upon
the ground that the jury was justified in inferring from the practice
of the company an express authorization of the agent to extend the
time of payment. There was no pretense that the agent by virtue
of his power to make tlio contract of insurance and collect pre-
miums could extend the time of payment. It is not uncommon,
we think, for agents to keep a policy iu force after a renewal
premium becomes due, without actual payment by the assured.
The agent sometimes credits the assured or issues a receipt to him
without payment by him, the understanding being that the agent
becomes personally liable to the company, and the assured to the
agent. In such case as between the assured and the company the
premium is regarded as paid. See Flanders on Insurance, page
164, and cases cited.

There is a class of cases where a receipt of premium by an agent
paid when due has been held to be a waiver of a forfeiture incur-
red by a violation of a condition of the policy. See Walsh v. ^ina
Life Insurance Company, 30 Iowa, 133, and cases cited; 8. c, G
Am. Rep. 664. But where an agent who is authorized to receive
premiums receives a premium paid when due, he is acting within
the scope of his general authority. The assured has a right to sup-
pose that the payment is valid ; that it becomes a payment to the
company, and that the company by receiving it, if it receives it
with knowledge of the forfeiture, waives the forfeiture. We have
been unable to discover any rule in the law of insurance which
would justify lis in holding that an agent can bind the company
by his consent to a postponement of a payment of a [renewal
premium, and keep a policy in force contrary to its provisions,
unless he is expressly authorized to do so.

It has been suggested that Kennedy's authority to receive pay-
ment of premiums should be deemed to include the authority io
bind the company to carry the risk without payment, because i:
might be for the interest of the company to do so. But authoriiy
to an agent to do one thing does not include by implication an
authority to do another thing, merely because it might be for the
interest of the principal to do the other thing. An agent has im- ^
plied authonty to employ the usual and necessary means to accom-
plish what he is expressly authorized to do. In the case at bar the



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JUNE TERM, 1880. ^



Critchett v. American inBuraoce Company.



carrying of the risk without pttyment of the premium was not nec-
essary to enable the company to colleci the premium; that was
collectible without any new contract or consideration. In no view,
then, did Kennedy have the implied power to make the contract
relied upon.

In our opinion the rule contended for by plaintiff would have a
tendency to impair the value of all insurance, both fire and life. If
insurance agents can grant a valid extension of the payment of
renewal premiums for a few months, as in this case, while the risk
continues, they can grant such an extension for a few years, or such
length of time as the policy can be renewed. No company under
such rule would be safe. Liabilities would constantly tend to
become dispfcportionate to available resources. The interests
bound up in insurance are too important to be thus jeopardized.

The foregoing considerations dispose of the case without regard
to the fact that the loss occurred one day after the alleged exten-
sion had expired. The evidence was not such as to justify the
instruction given, nor the verdict rendered.

Judgment reversed.

Note bt ^tHBiRBPoirrBR.— Bbck, J., dissentinf?, said amonf: other things : ' * The-agent was
authorized to collect the premiums. It cannot be doubted that if the plaintiff had paid to
the agent the premium after default, the policy would have again attached. The agent
could have enforced the payment under the terms of the policy. Thus far he was clothed
with authority, upon the exercise of which, at his discretion, depended the binding force
of the policy.

** His authority to collect the premium could be exercised in such a manner and at such
times as tlie interest of the defendaut determined by the agent required. 8urely the au-
rtiority to collect the premium was not so limited that it could not have been exercised
after default by plaintiff. It follows that the agent before default could arrange with the
plaintiff to extend the time in the exercise of his authority to collect, or in other words
could extend the time for payment.

'' It is not necessary to hold that the agent had authority to enter into a contract for the
extensioD of the time upon the note. This would require authority to make a new con-
tract under which the old contract would L>e modified. But the extension of indulgence to
the plaintiff under an agreement that the insured shall not be prejudiced by delay is quite
a different thing.

" I «iil illustrate this point by a supposed case. A. enters into a contract for the sale uf
lands to B., payment to be made upon a specified day, the time of payment being of th<»
essence of Uie contract. The note given by B. to sei'ure the purchase-money Is placed in
the hands of C. for collection, who agrees with B. that indulgence shall be extended for n
lime agreed upon. In such a case the condition as to time is waived. The agent^s power
to collect the money was exercised in granting indulgence. I know of no reason why the
name doctrine should not apply to policies of insurance. It is based upon the plainest
reasons. Parties to a contract should not bo enabled to lay ambuscades and pitfalls for
one another ; they should not by professions of kindness and Indulgence Induce the vi(»-
lation of the contract, and then take advantage of the default.

"The agent of defendant in this case was authorized to collect the premium; there was
no limitation upon this authority. He therefore, could in the exercise of his authority, do



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ae IOWA,

Kincaid v. Hardin.



all acts that could have been done by his principal in collecting the premtam. He coaki
grant indulgence and delay in the exercise of his authority.**

'* My brothers In the foregoing opinion express the thought that the agent could not
grant indulgence, unless he had the authority to enter into a contract of insurance. They
think that the time for the pajrment of premiums can only be extended by insurance
agents when they deliyer the policy, or do some other act required in the execution of the
contract. That agents possessing such authority, and under such circumstances ma: '
waive conditions as to the time of payment, does not support the conclusion that indul>
gence, or if you please, extension of time, may not be granted by an agent employed to
collect premiums after the policy has attached. In my opinion the time at which an sgent
may perform acts under his authority, if not prescribed by the principal, rests in his discre
tion, to be exercised for the Inter %t of the principal . The agent of defendant was author-
ised to collect the premium, he determined that he would not collect it, or demand its pay-
ment, until plaintiff received his pension, and so informed plaintiff, who relying upon the
arrangement, did not pay the premhim before his house was burned. As the act of the
agent in extending the time of payment was done in the exercise of authority to collect
the premium, the defendant Is estopped to enforce the forf^ture for the non-payment of
the Installment."



Kincaid v. Hardin.

(58 Iowa. 430.)

Municipal corporation — negligence — county — court-tunue.

A coantj Is not liable for personal injuries sustained by reason of the defect,
ive constructfon and imperfect lighting of the court-hooBe.*

ACTION of damages for personal injuries. The opinion states



Online LibraryIrving Browne Isaac Grant ThompsonThe American reports: containing all decisions of general ..., Volume 36 → online text (page 28 of 123)