Syllabus.

mination to build the branch road, the judgment of the circuit court reversing the judgment of the common pleas court is

Affirmed.

DAVIS, C. J., SHAUCK, PRICE, CREW and SPEAR, JJ.,

concur.

STATE LIFE INSURANCE COMPANY V. HARVEY.

Policy of life insurance-Not to take effect until first premium paid Agent of company issues policy to himself-Son-in-law of agent, stranger to the policy-Furnishes money to agent to pay premium-Agent does not account to the company for premium-Agent's wife, the beneficiary, cannot recover on the policy.

1. Where a policy of life insurance contains the provision that the policy "shall not take effect until the first premium shall have been paid to and accepted by the company or an authorized agent," the payment of such premium, unless waived, is necessary to put said policy in force.

2. H., who was agent of a life insurance company, procured from said company the issuance to himself of a policy of insurance on his own life, which policy contained the above clause or provision as to prepayment of the first premium. Upon the delivery of said policy, H., being unable to pay said first premium, D., his son-in-law, who was a stranger to said policy, for the purpose of paying said premium for H., furnished or paid to H., himself, as agent for said insurance company, the amount due from the latter to said insurance company as and for said first premium. This transaction was without the knowledge or consent of the insurance company and no part of the money received by H. was ever accounted for or paid over by him to said insurance company. Held: H. could not act for himself and for his principal in the same transaction, and the payment to and receipt by him of the money from D. was not a payment of the premium to the insurance company or its authorized agent, and such payment was not a compliance with the condition of the

Statement of the Case.

policy and did not bind the company or put said policy in force.

(No. 8530-Decided March 21, 1905.)

ERROR to the Circuit Court of Tuscarawas county.

The facts found in the record in this case, so far as they are pertinent to the question considered and determined by this court, are as follows: On the eighth day of November, 1900, W. W. Harvey, by contract and appointment, became an agent of the State Life Insurance Company of Indianapolis, Indiana, for certain counties in the state of Ohio. While this contract and appointment was still in full force and effect, and while said W. W. Harvey was yet acting as the agent of said State Life Insurance Company, he made application to said company for a policy of insurance on his own life. The application so made by him was in writing, was in the usual form and was on one of the company's blanks such as was ordinarily used in making application for a policy of insurance. In due course a policy for $5,000 was issued upon said application and the same was forwarded to said W. W. Harvey by mail. This policy was by its terms made payable to Margaret S. Harvey, wife of the insured, if living, otherwise to the legal representatives or assigns of the said W. W. Harvey. Before making application for this insurance Harvey entered into an arrangement with one A. V. Donahey, his son-in-law, by which it was understood and agreed between them that if Harvey would make application to said State Life Insurance Company for a policy of life insurance on his own life, for $5,000, and should procure the issuance of such policy, then and in that event if he

Statement of the Case.

should at any time be unable to meet and pay the premiums on said policy, as they fell due, he, Donahey, would pay them for him. This arrangement between Harvey and Donahey was not disclosed to, or known by the insurance company. A life policy for $5,000 was issued to W. W. Harvey on December 19, 1900, and he being unable to pay the premium of $37.95, which by the terms of the policy was due thereon upon delivery of said policy and the payment of which was a condition precedent to the taking effect of said policy, notified Donahey of his inability to make such payment, whereupon Donahey furnished or paid to him the sum of about $19.00, being the amount of the premium then due, less the commission of Harvey as agent, and Harvey thereupon delivered to Donahey the following receipt which with others had been forwarded to him with the policy for collection.

No. 31356.

THE STATE LIFE INSURANCE COMPANY,

INDIANAPOLIS, INDIANA.

$37.95.

Received from William W. Harvey, of Canal Dover, O., the sum of thirty-seven and 95-100 dollars, being the quarter annual premium on Policy No. 18411, for $5,000, due on the nineteenth day of December, 1900, which pays the regular premium up to the nineteenth day of March, 1901.

This receipt to be valid must be signed by the president or secretary, and countersigned by an authorized agent of the company.

W. S. WYNN,

Secretary.

Countersigned this ..

day of ..

.......

189..

.Agent.

Statement of the Case.

When the next premium was due Donahey again furnished or paid to Harvey the amount thereof less Harvey's commission and received from him a like receipt. Neither of these receipts was countersigned by any one. Before the next installment of premium was due Harvey died. At the time of his death no premium had been paid to the company on this policy except in the manner above stated, and no part of the money furnished or paid by Donahey to Harvey was ever turned over or paid to the company or accounted for by Harvey as agent. W. W. Harvey, the insured, died on the fourteenth day of June, 1901, about six months after the policy had been issued. On September 7, 1901, the defendant in error, Margaret S. Harvey, the beneficiary named in said policy, brought her action in the court of common pleas of Tuscarawas county against the plaintiff in error to recover the amount of said insurance. In that action, the defendant, the State Life Insurance Company, pleaded among other defenses that the policy sued on never became and never was a valid contract of insurance for the reason that no premium was ever paid thereon to the company or its authorized agent as required by the terms of said application and policy. This was denied by reply.

At the close of the plaintiff's testimony a motion was made by the defendant, the State Life Insurance Company, asking the court to direct a verdict in its favor, which motion was overruled and proper exceptions noted. The cause was submitted to a jury and resulted in a verdict and judgment in favor of the plaintiff, Margaret S. Harvey, for the full amount claimed. This judgment was affirmed by

Argument for Plaintiff in Error.

the circuit court. Plaintiff in error now asks that this judgment of affirmance may be reversed and that judgment may be rendered in its favor upon the undisputed facts.

Mr. Charles F. Coffin; Mr. P. S. Olmstead and Mr. Gilbert H. Stewart, for plaintiff in error.

All oral negotiations relating to a contract of insurance are merged in the contract when executed. Elliott on Insurance, sec. 108; Higginson v. Dall, 13 Mass., 96; Insurance Co. v. Lyman, 15 Wall., 664; Insurance Co. v. Mowry, 96 U. S., 544; Fayerweather v. Phenix Ins. Co., 6 L. R. A., 805.

An agent dealing with the subject-matter of his agency in his own name and on his own behalf, will not as to that transaction, be deemed an agent but a principal and as to all acts relating to such transaction he must deal "at arm's length" with his principal. Kerr on Insurance, sec. 79.

The case of Spare v. Home Ins. Co., 19 Fed., 14, was a case involving the precise question involved here, that is, whether one can, as a matter of law, act as agent in a matter in which he had an interest adverse to his principal for whom he is agent in other matters.

The cases above cited and quoted all announce, and elaborate the reasons for the legal principle, that no man can act for himself and his principal in the same transaction, although the facts in said cases are somewhat different from the facts in the case now before this court. No two cases, arising in different jurisdictions and between different parties, will ever present quite the same facts. But given certain essential facts and the principle controls everywhere.