REHEARINGS DENIED. [Cases in which rehearings have been denied, without the rendition of a written opinion, since the publication of the original opinions in previous volumes of this Reporter.] Eldriedge v. Hoefer (Or.) 93 P. 246. 94 P. Krebs Hop Co. v. Levesley (Or.) 92 P. 1084. (xiv)† THE PACIFIC REPORTER. VOLUME 94. (36 Mont. 592) WEIDENAAR v. NEW YORK LIFE INS. CO. (Supreme Court of Montana. Feb. 25, 1908.) 1. INSURANCE CONTRACTS AUTHORITY OF AGENT-FRAUD-CONSTRUCTIVE NOTICE. An applicant for insurance, unable to read or write English, signed a note for the premium on an insurance policy. Without knowledge of his rejection in that company, he signed another note by which that note was taken up, on representations made by the agent of the company, who falsely introduced another person as agent of the New York Life Insurance Company, that he could get a better policy in that company. The agent of the first company procured an application from the agency director of the New York Life, who had power to hire agents, with the consent of the company, on a brokerage basis, which the company had knowledge its agents used at times, and the applicant signed such application in the presence of his daughter, two sons, and another person, without question. The policy, with the medical examination, was then returned by the agent to the agency director, who, in his own name, witnessed the signature, and sent in the policy, and accepted $5, which the agent falsely claimed had been paid him. No receipt for advance premiums, as provided by the policy, had been signed or detached. Held, that under Civ. Code, §§ 30733075, 3091-3095, and section 3114, determining authority of agents, and defining actual and implied authority, the facts did not show that the agent of the first company was hired by the director of the New York Life as agent, and that the maker of the note, on its negotiation and coming into the hands of a third person, could not hold the New York Life for the amount thereof, as the maker was charged with constructive notice of the lack of power of the agent. 2. SAME-FRAUD-RATIFICATION. The fraudulent acts of an alleged insurance agent in procuring an application and note for insurance are not ratified by the conduct of an insurance company, where it had no knowledge of the fraud until long after the application had been rejected. 3. APPEAL-REVIEW-DISPOSITION OF CAUSENEW TRIAL. Where a judgment in an action, not being in equity, or based upon an agreed statement of facts, is reversed on appeal, a new trial will be ordered. [Ed. Note.-For cases in point, see Cent. Dig. vol. 3, Appeal and Error, §§ 4597-4603.] Holloway, J., dissenting. Appeal from District Court, Gallatin County; Thos. C. Bach, Judge. Action by John Weidenaar against the New York Life Insurance Company to recover 94 P.-1 money paid on an insurance premium note. From a judgment for plaintiff, and an order denying a motion for a new trial, defendant appeals. Reversed. Hartman & Hartman, for appellant. Wal rath & Patten, for respondent. SMITH, J. The complaint in this action contains the following allegations: That on December 21, 1904, one W. J. McBride was a duly authorized and acting general agent and agency director of the defendant company in the state of Montana, with office at Butte, and as such had the authority to 'appoint agents of the defendant to solicit applications for insurance in the state. That on said date the defendant, through and by its said general agent, W. J. McBride, and one J. Sam. Castleberry, who at the time was an agent duly authorized by McBride to take such application, solicited and took plaintiff's application for a policy of life insurance in the sum of $5,000. That on the date of the taking of said application Castleberry induced plaintiff to execute to him and one E. E. Saunders, for the use and benefit of defendant, and in payment of the first premium on the policy, a certain promissory note for $462.30, bearing date December 21, 1904, due four months after date, payable to said Castleberry and Saunders, at the National Bank of Gallatin Valley, with interest at 8 per cent. per annum from date until paid, and defendant at said time, through its said agent Castleberry, delivered to plaintiff its receipt for said promissory note, wherein it was provided that in case plaintiff's application was not accepted by the company no policy should be issued, and the promissory note should be canceled and returned to plaintiff. That the application was forwarded by Castleberry to the general agent McBride, at his office in Butte, and the same was thereupon subscribed by McBride as the agent of defendant. That on the 13th day of March, 1905, defendant notified plaintiff that his application was rejected, but neither defendant, nor McBride, nor Castleberry, had returned or offered to return the note. That on the 23d day of December, 1904, Castleberry negotiated, sold, and assigned the note to the National Bank of Gallatin Valley, and on the 24th day of July, 1905, plaintiff paid the same, amounting to $383.90. That defendant, prior to the payment of the note by plaintiff, had refused on demand to pay the same, and has not paid to plaintiff any part of the sum so paid by him to the bank. said application so signed by plaintiff reads The defendant by answer denied that it ever solicited or took plaintiff's application for insurance; denied that either Castleberry or Saunders was its agent at any time mentioned in the complaint; and denied any knowledge or information sufficient to form a belief as to the transactions between Castleberry and Saunders and the plaintiff, or either of them, concerning the note. After admitting that Castleberry forwarded the application to McBride, and that McBride subscribed the same as general agent of the company, it alleged affirmatively that neither Saunders nor Castleberry was its agent, and that neither of them had ever been appointed, or "pretended to be appointed," or held out, by defendant or McBride, as an agent. It then proceeds: "(3) That shortly after the 24th day of December, 1904, an application for life insurance in the sum of $5,000 in the defendant company, purporting to be signed by plaintiff, was submitted at the office of defendant in the city of Butte, in the state of Montana, to said W. J. McBride, who was requested to submit the same to defendant for action, and for that purpose to sign his name thereto as agent. That said W. J. McBride was ignorant of any of the transactions with plaintiff alleged in the complaint to have been A reply was filed, putting in issue the afhad by said Saunders and Castleberry, or firmative allegations of the answer, and then either of them, and neither he or said comalleging: "(1) That at the time the plainpany, or any of its officers or agents, ever tiff signed an application for a policy of life had any knowledge of said alleged transacinsurance to be issued by the defendant comtions until long after the application of said pany on the 21st day of December, 1904, as plaintiff for insurance had been declined, alleged in the plaintiff's complaint herein, as hereinafter set forth. (4) That the said the said J. Sam. Castleberry, as the agent of W. J. McBride, being in ignorance of such the defendant as alleged in the complaint alleged transactions, and supposing and beherein, presented the said application to plainlieving that said application was submitted tiff for signature after all blanks therein had in good faith and had been properly obtained, been filled out by the said Castleberry, and forwarded the same to the home office of this the said Castleberry thereupon stated to defendant in New York City, where the same plaintiff the contents of said application. was afterwards declined, and said plaintiff That the plaintiff is a foreigner by birth, to notified accordingly of such declination. wit, a native of Holland. That the plaintiff That by said application, so signed by said is unable to read the English language to plaintiff, the plaintiff made the following any extent at all, being able to read only simagreements therein contained and set forth: ple matter when printed in large type, and (I) That no statements, promises, or infor- does not write the English language more mation made or given by or to the person than to write his own name. That plaintiff, soliciting or taking this application for a by reason of his lack of knowledge of the policy, or by or to any other person, shall be English language, was not able to read the binding on the company, or in any manner application so prepared for his signature by affect its rights, unless such statements, the said Castleberry, and did not read the promises, or information be reduced to writsame, and that plaintiff was entirely depending, and presented to the officers of the coment upon the statements of the said Castlepany, at the home office, in this application. berry as to the contents thereof. (2) That * * (IV) That any payment in advance at the time of the signing of the said applion account of premium shall be binding on cation by plaintiff as aforesaid the said Castlethe company only in accordance with the berry well knew that the plaintiff could not agent's or cashier's receipt therefor on the read the English language so as to be able company's authorized form.' That a part of ❘ to read the said application and know the |