Phoenix Assurance Company Limited v Berechree [1906] HCA 6

Phoenix Assurance Company Limited v Berechree [1906] HCA 6 - HCA 1906 case summary — Zoe

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5, Was Camp the agent of the company or the agent of the intiff in filling in the answers? Answer: Yes, agent for "company. This last question, we were informed, was put in view of a possible affirmative answer to the first question. Tt was arranged that a general verdict should be taken, but that the parties should be at liberty to argue that the points in- volved in questions 2 and 5 were points of law and not of fact. The learned Judge in effect directed the jury that if they answered : the first question in the negative they should find for the plain- tiff, No objection to this direction was taken at the trial. After the jury had retired, leave was reserved to the defendants to 'move to enter a verdict for them if the answer to question 2 _ should be in the affirmative, whatever might be their answers to 2 questions 3 and 4. Motion was accordingly made to the learned Judge (in accordance with the practice of the Court) to enter _ judgment accordingly, or for a new trial on the grounds that the ~ answers to questions 3 and 4 were against the evidence. This _ motion having been refused, the defendants gave notice of appeal ; oad the decision of the learned Judge to the Full Court, and in

their notice of appeal claimed that they were entitled to judgment "aotwithstanding the answer to question 1. This point had been taken before the learned Judge on the motion, but he refused to entertain it on the ground that it was not covered by the leave. It was, however, in our opinion, open to the defendants under the Local Court Statute on the appeal to the Full Court, as a matter _ of misdirection ; and it was entertained and dealt with by the Full Court, who were of opinion that Camp, the local agent, was
acting as the agent of the company when, as found by the jury, he falsified the proposal by inserting the words in question. They : also thought that the declaration, although untrue in fact, was é not a false declaration within the meaning of condition 9, and that the findings of the jury in answer to questions 3 and 4 were not against the evidence. They therefore dismissed the appeal. The finding of the jury in answer to question 1 is not _ impeached. 'The case must therefore be dealt with on the assump- _tion that the proposal when signed contained a true statement as _to plaintiff's title to the land and buildings, and was improperly

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in the letter as received by him. In this case, if no more it is clear that B. cannot hold A. bound by the contract essed in the documents in their existing state. In order that . may be bound it must be shown that the alteration was made y his authority, which may be proved, certainly by evidence of dent authority given by him to the person by whom the alteration was made, and, possibly, by evidence of ratification. ut this would seem to depend upon whether the falsifier should e regarded as having purported to act as agent for A. in making ne alteration: see Keighley, Maxsted «& Co. v. Durant (1). It is also that B. would not be bound by the offer as written by A, he were estopped from denying the alteration. And, since mtract must be mutual, it would seem that, as B. could not A. upon the contract contained in the altered document, so also A. could not sue B. upon that contract. If this is the correct , there could not in such a case be any binding contract at If, however, A. could sue B., and did sue him, upon the act evidenced by his letter of acceptance, it is clear that would be bound by the terms of the letter which B. actually wed. Another case may be put, which in principle seems tical. A writes a letter to B,, making an offer of a con- t, and hands it to C. for delivery to B. C., instead of ering the document written by A., delivers a different ment containing a different offer, which B., by letter to A., pts. Here again, if A. can sue B. on the contract evi- iced by the substituted letter, it must be either on the ground that C. was A's agent to make the substitution, or on the ind that A. by suing ratifies C.'s act. This latter view accepted by the Supreme Court of Maine in the case Richardson v. Maine Insurance Co. (2) cited with approval by the Supreme Court of the United States in New York life Assurance Co. v. Fletcher (3). If, however, B. is to be held bound to the terms of A.'s genuine offer, it must be on the ound that he is estopped from denying that ©. made the titution. Such an estoppel must arise from his own conduct, dcan only arise if he has failed in some duty which he owed to in the particular transaction. See Farquharson Bros. & Oo. v.

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accepted the offer, and the point might be regarded as one of form rather than substance. But I cannot see my way, consis- tently with any recognized rules of law, to imply any such stipu- lation. Nor do I know of any doctrine of English law by whieh a principal is estopped by a fraudulent act of his agent not done within the apparent scope of his authority. The cases relied upon by the Supreme Court on this point were all cases where the fraudulent act was so done. The learned Judges thought also that the facts supported the finding of the jury that Camp was the agent of the defendants in filling in the answers to the questions in the proposal form. In the face of the express terms of the pro- posal and the interim receipt I cannot accept this view, which is contrary to the opinion of Wright J. in Biggar v. Rock Life Assurance Co. (1), and the opinion of the Supreme Court of the United States in Mew York Life Insurance Co. v. Fletcher (2), which I think are good law, Camp's statement that it was his duty to fill in the answers is nothing to the purpose. Upon the evidence the jury might have found that Camp knew the actual facts as to the plaintiff's title to the land and buildings, but I cannot find any ground for holding that his knowledge bound the company. In the case of an express warranty, ¢.g. of title, it is ordinarily immaterial that the person in whose favour it is given knows that it is un- true at the time. If the untruth can be relied upon, it must be on some ground which would justify the rectification of the contract by excepting the fact known from the warranty. In the present case the reasons which I have given would be equally applicable as an answer to a claim to rectify the contract of insurance sued upon. For these reasons I am unable to concur in the judgment of the Supreme Court. I think that the better view is the third of those above suggested, and that there was never any completed contract except that evidenced by the interim receipt. The plaintiff's rights, therefore, cannot be more than to have a return of the whole or part of the premium. His right to recover the whole was not disputed by the appellants, and the plaint may be taken to be amended by including a claim to that effect. «

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company as having. Those powers cannot be cut down by any- thing in the letter of instructions of the 28th July 1903, of which the respondent had no notice. But even if that were not so, there is nothing in the instructions that bears on the matter one way or the other, The jury have found that Camp was the agent of the company in filling in the answers. That is, of course, the answers which the respondent gave him. It is apparent on the face of the receipt dated the 21st November 1903, given by Camp for the premium received at the same time as the proposal, that, although the receipt of the premium operated as a cover for 14 days and was to that extent a contract of insurance, there could be no further or other contract made to bind the company until the proposal had been approved by the manager in Launceston. On the other hand it must be taken that Camp was the agent of the company to transmit the respondent's proposal together with the premium to the manager in Launceston. It must also be taken that the proposal so made and delivered by the respondent to Camp, and assented to by the respondent as the basis of the insurance, did not contain a representation that the purchase money under the pur- chasing option had been nearly paid up - Camp afterwards, and clearly without the respondent's authority, altered the proposal by inserting that representation, sent it on to the company as being the repondent's proposal, and the company's manager having con- sidered the proposal in that form, accepted it in that form as the basis of the insurance. On these facts, if the matter rested there, it is clear that the respondent's proposal as assented to by him was never assented to by the appellant company, and that the proposal actually assented to by them was never assented to by him, that the parties were thus never ad idem, and that there never was any completed contract between them. But, notwithstanding these facts, there would be a contract binding in law on the respondent if,as was contended by the appellants, Camp in making the altera- tion was the respondent's agent. There is however no ground for that contention. The principle laid down in Biggar v. The Rock Life Asswrance Co. (1) relied on by Mr. Waterhouse, cannot be applied to the facts of such a case as this where the alteration was made after the proposal had been signed and without the respon-

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Ql But there is a second ground upon which Mr. Clarke contends that, notwithstanding the actual facts, the respondent is entith to insist that there exists a contract based on the proposal as signed by the respondent, which is binding on the appellant com- pany. Admitting for the purposes of his argument that the proposal was altered by Camp after he had received it, and before it was transmitted to the Launceston office, that the alteration was without the knowledge of the appellants and without any authority from them, and that in accepting the proposal as altered - they believed that they were accepting the proposal in the form : assented to by the respondent, he contends that the law will not under these circumstances allow the appellants to set up the actual facts. His contention in other words is that the - appellant company are estopped from denying that the pro- - posal accepted by them was any other than the proposal - in the form as signed by the respondent. It is essential to" estoppel in a case of this kind that there should be either know-_ ledge in the principal express or implied of the act of the agent relied on, or that there should have been some breach of duty to the other party which enabled the agent to do the act complained of, or which prevented the principal knowing of it. It is clear that the appellant company had no express knowledge of Camp's ~ alteration, nor any reason to suppose that the proposal as it reached them was not in the same form as when Camp signed it. _ Nor could the knowledge be imputed to them by reason of any authority which Camp was held out as having. On the contrary the interim receipt given by Camp to the respondent showed, as I have already pointed out, that Camp could have no authority to make the alteration, and there was nothing in the proposal itself, or in the cireumstances in which it reached the company, to indi- cate to them that Camp had on this occasion exceeded his authority as agent by making an alteration behind the back of the proposer. Neither was there neglect of any duty owing by the appellant company to the respondent. It is difficult to suggest the existence of any duty to the respondent arising under the circumstances which the appellant company did not fully dis- charge. Clark J. in delivering the judgment of the Supreme Court implies that there was in the opinion of the Court some

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Before

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Judgment (101 paragraphs)

Cited By (2)