Phoenix Assurance Company Limited v Berechree [1906] HCA 6

THE PHGNIX ASSURANCE )

HIGH COURT

(HIGH COURT OF AUSTRALIA.]

APPELLANTS ; COMPANY LIMITED J : DEFENDANTS, AND BERECHREE . 3 ' A . % . RESPONDENT. PLAINTIFF,

ON APPEAL FROM THE SUPREME COURT OF TASMANIA.

H.C. or A. Fire insurance —Policy—Condition for avoidance if untrue statement made—Pro-

1906. a

Horaxr, Feb. 19, 20,

MELBOURNE, March 16.

Griffith C.J., Barton and O'Connor JJ.

posal—Fire claim—False statement in proposal filled in by agent—Agency— Estoppel—Ratification— Holding out.

B. effected a policy of fire insurance with the appellants through their local agent. The policy made the proposal the basis of the insurance, and its incorrectness or untruth in any respect, material or not, was to exonerate the company from all liability ; and fraud or falsehood in the notice of claim for loss under the policy was to work a forfeiture of all benefits thereunder. On signing the proposal, B, received from the agent a cover-note signed by him and containing the words: 'Accepted by the company subject to the approval of the manager (&c.)." Across the document were written the words: 'Fourteen days cover only." In the proposal which was filled up by the agent, and in the notice after the fire, B.'s interest in the premises was falsely described to a material extent. In an action on the policy against the company, the jury found that the false description had been inserted by the company's local agent in the proposal after it had been signed by B. The jury also found that the false description in the claim was not wilfully and intentionally untrue, and that the local agent in falsifying the proposal was acting as the agent of the eompany, not of B.

Held, that the authority of the local agent was limited to transmitting the proposal to the company, and issuing to the proponent an interim receipt, giving temporary cover ; that of this limitation B. had express notice, and that the company was therefore not estopped from setting up the excess of authority of the agent.