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the truthfulness of any statement in the application for the policy, or to relieve the allplicant from any warranties therein, or to bind the company by any knowledge he might possess in relation to such statements or warranties, is clearly shown by the terms of the application itself, which expressly limits the power and authority of soliciting agents in those and in all particulars relative to matters pertaining to such application.

An insur:ince company can, like any other principal, prescribe limitations upon the power and authority of agents, and persons dealing with such agents with knowledge of the limitations upon their authority are bound by the restrictions imposed. Now, in the application made and signed by the insured it was expressly agreed by him that all his answers therein were true; that they should form the basis of the contract of insurance, and, if any were untrue, the policy should be void. Ile was informed by it plainly that only the officers at the home office had authority to determine whether a policy should issue on the application, and that they acted on the written statements, answers, warranties, and agreements contained in it in determining that matter. It was further expressly declared in the application and agreed to by the applicant that no statements, promises, or information given to the person soliciting the application for the policy should be binding on the company, or in any manner affect its rights, unless reduced to writing and presented to the officers of the company at the home office. Clearly, by these provisions of the application, express notice was given to the applicant that the officers at the home office reserved the exclusive right to determine whether the company would be bound by any statement or information made or presented by its soliciting agents, and then only when such statements were presented to them in writing, and that soliciting agents had no authority or right at all to bind it by any statements, promises made, or information possessed by them. The company had a right to thus limit the authority of its soliciting agents, and the beneficiary under the policy cannot now assert that the company was bound by the information possessed by its soliciting agent and undisclosed to it, when it was expressly declared in the application that the agent had no authority thereby to bind the company, that the company would not be affected by it unless it was forwarded to the officers at the home office for their consideration and action upon it. ind the insured had knowledge of this when he made his application. As by the termis of the application and to the knowledge of the insured the soliciting agent had no aluthority to bind the company in any way, either by express agreement or the possession of any knowledge or information concerning the falsity of any of the statements or warrauties contained in the application, mere

possession of knowledge of such falsity was not kuowledge acquired within the scope of his authority, and therefore cannot be said to be the knowledge of the company.

(ounsel for appellant cites us to cases where the company has been held bound by the conduct of its soliciting and other special agents. But these are cases where either the agents had ostensible authority to act in the matters in question there or had deceived the insured, been guilty of some misrepresentation, or perpetrated some fraud upon him; the insured not being in fault and acting in good faith without notice of any limitation upon the authority of the agent. But the case at bar presents none of these situations. It is not claimed that the agent perpetrated any fraud on the insured, or that he represented he would or had authority to waive the truthfulness of any statements in the application or the accompanying warranty respecting its truth. The position taken here by appellant simply is that, because the agent had information that a statement the assured warranted to be true was false, the mere possession of this knowledge bound the company and relieved the assured from his warranty, notwithstanding it was expressly provided in the application, and the insureel knew that the company could not be so bound, and could only be bound by having such information imparted in writing to the home officers, who were authorized to act upon it. This position could only be sustained by holding that it was not competent for the company to limit the authority of its agents and that the insured is not bound by the knowledge of such limitations. Of course, it cannot be so held. In the case at bar there is no question of fraud, deception, or misrepresentation practiced by the agent. The sole question is one of contract. The applicattion contained a limitation on the authority of the agent expressly providing against the company being bound by any information possessed by him not disclosed in the application and declaring the only way it could be bound, namely, by written statements furnisheil the officers at the home office for their action upon them. The assured knew all this and agreed to it. It was the contract of the parties upon the subject of the agent's authority, and prescribed the only method in which the company could be bound, which it is not pretended was followed; and we know no reason why the assured should not be controlled by the terms of the contract and the limitations on the authority of the agent imposed thereby. New York Life Insurance Co. v. Fletcher, 117 V'. S. 31.9, 6 Sup. Ct. 837, 2. L. Ed. 9:4; Northern Assurance Co. v. Grandl View Ass'n, 183 W. S. 308.2 Suj. ('t. 133. 10 L. EX. 213: NeCoy v. Metropolitan Life Ins. Co., 133: Mass. 52; Clemens v. Supreme Council, 131 V. Y. 18.7, 30 X. E. 1990, 10 I. R. 1. 3:3 : Dimi kv. Jet. Lite Ins. Co., 09 X. J. Law, 381, JJ Atl. 291, 62 L. R. A. 774.

In discussing this matter we have refer

(151. Cal. 701) red simply to the finding of the court as to WOOLLACOTT et al. V. MEEKIN. (L. A.

v. the knowledge possessed by Clark, the solicit

1,808.) ing agent, who actually solicited the applica- (Supreme Court of California. Aug. 19, 1907, tion for the policy by the assured. We have

Rehearing Denied Sept. 18, 19:37.) in mind the fact that the court found that 1. MUNICIPAL CORPORATIONS — STREET IMClark had imparted this information to his

PROVEMENTS-CONTRACTS-VALIDITY. immediate superior, also a soliciting agent of viding that all damage arising from the nature

A contract for a street improvement, prodefendant in charge of the other soliciting of the work to be done should be sustained by agents in Pasadena. That he imparted this the contractor and that the latter should ininformation to him does not affect the ques

demnify the city from all suits against it on

account of any damages from the actions of the tion. The knowledge of the superior solicit- contractor, was void as imposing conditions nating agent, under the limitation as to the au- urally tending to increase the cost of the work

and add to the burden of the property owners. thority of such agents, bound the defendant

2. SAME — ACTION TO ANNUL ASSESSMENT — no more than did the knowledge possessed


In an action to annul an assessment for It follows, from the view we take of the street improvements and bonds issued thereunlaw applicable here, that the insurance com

der constituting a lien on land owned by plain

tiffs, on the ground that the contract for the pany had not waived the warranty made by improvements was void, no substantial right of the assured in his application for a policy defendant was affected by the joinder as plainrelative to paralysis; that knowledge by the

tiffs of several owners of separate lots of land soliciting agent of the falsity of this state

not claiming under a common source of title.

3. APPEAL AND ERROR—MISJOINDER OF PÅRment as to that matter did not have that ef

TIES-HARMLESS ERROR. fect, in view of the limitation on his authority A judgment, after trial on the merits, will contained in the application and known to

not be reversed because the court impropery

overruled a demurrer on the ground of mi the assured, and the further provision as to

joinder of parties, where such misjoinder ai. the only method by which the warranty not affect any substantial right of a party. might be waived by the company; that the [Ed. Note.For cases in point, see Cent. Dig. judgment is supported by the finding that

vol. 3, Appeal and Error, $ 4095.] there was a breach of such warranty, and is 4. MUNICIPAL CORPORATIONS — STREET Im


Where proceedings for street work were

void ab initio, there was no moral obligation We concur: McFARLAND, J.; SLOSS, J.; on the part of the owners of land abutting on HENSIIAW, J.

the street to pay any part of an invalid assessment made for such street work, so that a ten

der of the amount properly due was not a conANGELLOTTI, J. I concur in the judg. dition precedent to the right to sue to set aside ment, and generally in what is said in the opin

the assessment.

[Ed. Note.-For cases in point, see Cent. Dig. ion. I, however, base my concurrence solely

vol. 36, Municipal Corporations, $ 1200.] upon the presence in the application for the

Beatty, C. J., and Shaw and Lorigan, JJ., policy of the provision set forth in the opinion, dissenting. and the knowledge thereof which, by the record before us, must be imputed to the applicant In Bank. Appeal from Superior Court, Los at the time he made the application. Mr. Angeles County; Waldo M. York, Judge. Cooley, in his Briefs upon the Law of Insur- Action by H. J. Woollacott and others ance, states that the general rule that the against Cora L. Veekin, substituted for D. A. knowledge of an insurance agent is imputable Meekin. Judgment for plaintiffs, and defendto the company applies also, in most instances, ant appeals. Affirmed. to a soliciting agent with reference to mat

Munson & Barclay, for appellant. 0. B. ters made known to him prior to the execution Carter, for respondents. of the policy. Volume 3, p. 2524 et seq. This declaration appears to be supported by many ANGELLOTTI, J. This is an action by 12 decisions. But where the company has, to persons, owning separate lots of land in the the knowledge of the applicant, expressly pro- city of Los Angeles, to obtain a decree de. vided that it shall in no way be bound by claring void and annulling a certain assess any knowledge possessed by the soliciting | ment upon their land for street work done agent, and that, as to matters covered by the on Mott street, in said city, and the bonds isquestions asked the applicant, it acts solely sued thereon, constituting a lien on said land. upon the written information furnished by Judgment was given in favor of plaintiffs, the applicant to the home office, in determin- and defendant appeals therefrom. ing whether or not a policy shall issue, which Upon the question as to the validity of is the effect of the provision in question, I do the assessment and bonds it will be necesnot see how the company can be held to be sary to notice but one of the objections of bound by the mere knowledge of the solicit- / plaintiffs. The street work done consisted of ing agent of the falsity of an answer know- the grading and graveling of a portion of Mott ingly made by the applicant.

street, and the construction therein of a ce

ment (urb, a redwood curb, a cement sideI concur: SHAW, J.

Walk, and a cobble-pared gutter. The various proceelings of the city officials, from was also a provision in the cases cited that and including the resolution of intention to the contractor "shall hold the city harmless and including the contract for the work, pro- for any and all suits for damages arising out vided that the work should be done in ac- of the construction of said improvements.” cordance with certain described specifications This court held that, while a fair construcon file in the office of the city clerk of said tion of the other provisions might warrant a city. By reference, these specifications were conclusion that they referred only to damexpressly made a part of the contract, and ages resulting from the negligence of the conthis inclusion of such specifications as a furt tractor in prosecuting the work, the proviof the contract was, of course, authorized by sion as to loss or damage arising from the the reference thereto in the anterior pro- nature of the work had a broader meaning, ceedings. The specifications so referred to and incl: led practically any damage for in all the proceedings were separate specific which the city would be liable which might cutions for the different kinds of work. Each originate "in the nature of the work to be of these specifications contained the following done." It was held, citing Brown v. Jenks, provisions: ".111 loss or damage arising from :

98 Cal. 10, 32 Pac. 701, and Alameda Macthe nature of the worl: to be done under this adamizing Co. v. Pringle, 130 Cal. 226, 62 agreement, or from any unforeseen obstruc- Pac, 391, 52 L. R. A. 204, 80 Am. St. Rep. tion or difficulties which may be encountered 124, that such a provision was not only unin the prosecution of the same, or from the authorized by statute, but that it imposed conaction of the elements, or from any incum- ditions naturally tending to increase the cost brances on the lines of the work, or for any of the work and increase the burden of the act or omission on the part of the contractor, property owner, and the judgments giving or any person or agent employed by him, not the owners the relief sought on account of authorized by this agreement, shall be sus- the invalidity of the assessment and bonds tained by the contractor.

* The con

were affirmed. tractor shall indemnify and save harmless So far as the question as to the proper conthe city of Los Angeles from all suits and struction of the provision under discussion is actions of every name and description brought concerned, there is no material difference beagainst it for or on account of any damages tween the case at bar and the cases of Blochreceived or sustained by any party or par

v. Spreckels, supra, and Goldtree v. ties, or by or from any of the acts of or any- Spreckels, supra. The added clauses present thing done by said contractor, his servants, or in the case at bar in no degree tend to affect agents in the prosecution of said work.” The the force or meaning of what is clearly a italies are ours. These two provisions were separate and independent provision as to in no way connected, and were apparently the loss or damage arising from the nature separate and independent stipulations.

of the work to be done. The words "which The question is to the effect on the as- may be encountered in the prosecution of the sessment and bonds of the italicized portion same" can be read only as applicable to the of the first of these provisions is determined clause "or from any unforeseen obstruction by the decision of this court in Blochman v. or difficulties," immediately preceding. The Spreckels, 135 Cal. 602, 07 Pac, 1061, and second provision in the case at bar is obviousGoldtree v. Spreckels, 135 Cal. 606, 67 Pac. ly a separate and distinct provision, having 1091. These were actions to restrain a pur- no reference to the provision relating to damchaser at sales made on bonds issued on an ages arising from the nature of the work, and assessment for street work in the city of in no degree affecting the meaning thereof. Coronado from applying for a deed, and to No principle of construction would justify quiet the owner's title as against such sales. the conclusion that this provision was intendThere was an ordinance of the city providing ed to detract from the effect of the former that the work “shall be done in accordance provision, and relieve from the burden therewith the following specifications," which or- by imposed. There is no merit in the contendinance was held to constitute a part of the tion that the unauthorized provision was not contract for the work. That ordinance, after a "specification” as to the materials to be specifying the manner of doing the work and used, and the manner of doing the work, and, the materials to be used, provided, among therefore, was not included in the reference other things, as follows: "All loss or dam- to the specifications made in the preliminary age arising from the nature of the work to be proceedings. Whether or not the provision done under these specifications shall be sus- is, in strictness, a “specification," it was a tained by the contractor." It will be ob- part of each of the documents on file referrel served that the only difference between this to, entitled simply "Specifications No. 68, for and the italicized portion of the provision in the Construction of Graveled Streets in the the case at bar is in the use of the words City of Los Angeles," "Specifications No. 51, "these specifications," instead of "this agree- for the Construction of Cement Curls in ment.” This difference in verbiage is clear- the City of Los Angeles," etc., and was manly immaterial. The provisions are substan- ifestly included in that term, both in the doctially the same, and necessarily mean the uments entitled “Specifications" and the refsame thing, unless the connection in which erences thereto, just as it was in the ordithey are used makes a difference. There nance involved in the Spreckels Cases above cited. See, also, Brown v. Jenks, 98 Cal. 10, joinder did not affect any substantial right of 32 Pac. 701. It is apparent that, unless a party. See Daly v. Ruddell, 137 Cal. 671, the decisions in Blochman v. Spreckels, supra, 074, 70 Pac. 784; Hirshfeld v. Weill, 121 Cal. and Goldtree v. Spreckels, supra, are to be 13, 15, 53 Pac, 402; Asevado v. Orr, 100 Cal. overruled, the assessment and bonds here in- 293, 300, 34 Pac. 777; Reynolds v. Lincoln, 71 volved must be held void. While those cases Cal. 183, 185, 9 Pac. 176, 12 Pac. 449. This were decided in department, the decisions is but an application of the rule declared by were practically by the court in bank, for section 475, Code Civ. Proc., that the court Blochman v. Spreckels was decided by de- must disregard errors and improper rulings partment 1, and Goldtree v. Spreckels was de- not affecting the substantial rights of the cided on the same day on the authority of parties. the Blochman Case by department 2. All of ; It is urged that the complaint is fatally the then justices of this court except the defective, in that there is no allegation that Chief Justice then gave their adherence to plaintiffs ever offered to pay what the street the views there expressed, and applications improvements were reasouably worth to their for a rehearing in bank denied. These deci- lots. It is said that they cannot have the sions, given February 28, 1902, constitute a equitable relief sought without doing equity. rule of property declared by this court, upon The equitable maxim thus invoked has no apthe faith of which, we must assume, parties plication under the facts shown by the comhave acted in their dealings in regard to plaint. We have here proceedings for street lands. The construction given by these de work had, presumably, without the consent cisions to the provision in question was cer- of the landowner, which were void ab initio. tainly a permissible one. Under these cir- They could not serve as a sufficient foundacumstances, we would not feel warranted in tion for any assessment, and for this reason overruling such decisions, even if we felt the entire assessment was void. It cannot that a different construction might have been be held upon the facts shown that there was given to that provision. It is to be noted in any moral obligation on the part of the owner this connection that the proceedings for the to pay any part of such an invalid assesystreet work here involved were inaugurated ment. The mere fact that the street work by the city of Los Angeles nearly one year called for by the invalid proceedings and conafter the decisions above referred to.

tract has been done does not create such a A demurrer was interposed to the complaint moral obligation. The case in this respect is in the court below, and overruled. We have


the same as Chase v. Treasurer, etc., 122 Cal. deferred consideration of the points made 540, 55 Pac. 414, where it was held, in an acrelative to this ruling, as they can be dis- tion by the owner to restrain a sale on such a posed of more briefly in the light of the bond, that, as the entire assessment was void knowledge afforded by what we have said as and there was no tax to be tendered, no tento the merits of the case. It was urged by der was essential to the maintenance of the the demurrer that there is a misjoinder of action. The case here does not fall within parties plaintiff and causes of action, in that the doctrine of the cases cited by defendant, several owners of separate lots of land not nor within that of the later cases (not cited) claiming under a common source of title are of Ellis v. Witmer, 134 Cal. 219, 66 Pac. 301, joined in an action to have the assessment and Couts v. Cornell, 147 Cal. 560, 82 Pac. and bonds issued thereunder, constituting 194, 109 Am. St. Rep. 168, in the latter of liens on the several parcels, declared void. which the application of the maxim relied It is unnecessary to consider the argument upon is fully discussed. of learned counsel for plaintiffs in support of

There is no merit in the claim that, if the this joinder. Assuming, for the purposes of assessment and bonds are void, they cast no this decision, that there was a misjoinder, cloud upon the title of plaintiffs. The invait is apparent that no substantial right of the lidity is not apparent upon an inspection defendant was affected thereby. Defendant's merely of the assessment, warrant, and diaclaim as to each and all of the lots was gram, and the bonds, which constitute prima based entirely upon the validity of the legal facie evidence of the validity of the proceedproceedings, common to all the lots, leading ings, and the owners of the land, in any acup to the assessment. Those proceedings

tion founded upon a deed issued in proceedwere, as we have seen, ineffectual for any ings to enforce the lien of the bonds, would be purpose, and void. No prejudice could possi- required to offer evidence to defeat a recovery. bly result to defendant from having that The precise point here made was made in question determined in a single proceeding Chase v. Treasurer, etc., supra, and decided mantained by the different owners. On the against the contention of defendant. contrary, in at least one respect, such a course There is no other point requiring considerawas manifestly to his advantage, namely, in tion. the matter of costs and attorney's fees. It The judgment is affirmed. seems to be thoroughly settled that a judgment after trial upon the merits will not be We concur: SLOSS, J.; MCFARLAND, J.; reversed because the court improperly over- HENSHAW, J. ruled a demurrer on the ground of misjoinder of parties, where it is plain that such mis- I dissent: BEATTY, C. J.

SHAW, J. I dissent. In my opinion the like manner, under the direction and to the clauses of the so-called specifications, upon satisfaction of the said street superintendent. which the validity of the assessment in the all of the following work [here follows the prevailing opinion is based, were not incor- description with references as above mentionporated in the contract and proceedings lead- ed] * * * according to the specifications ing up to the assessment and formed no part on file in the office of the city clerk of said thereof. In the first place, the reference in the city, which are known as 'specifications Vos. proceedings and in the contract are to things 68, 51, 52, 55, and 51,' and made part of this designated therein as "specifications," and the contract." extent of the incorporation of the documents The specifications provide with great detail thus designated into those proceedings and the manner in which the work is to be done contract must be confined to that which con- and the materials of which it is to be comstitutes the specifications alone. In Baltimore posed. Each is prefaced by a heading in& 0. R. Co. v. Stewart, 79 Md. 487, 29 Atl. dicating the purpose for which they were 961, speaking of a reference of this character originally adopted by the council. For inin a building contract, the court says: "The stance, that relating to the cement curbs Is term 'specifications,' as thus used in contracts as follows: "Specification No. 51, for the of this kind, ordinarily means a detailed Construction of Cement Curbs in the City of and particular account of the structure to be Los Angeles." The others are in the same built, including the manner of its construction language, thus demonstrating that the speciand the materials to be used.” In the sec- fications were prepared as specifications of ond place, the purposes for which the docu- construction alone. There is nothing in the ments (alled "specifications" are referred to proceedings, or in the contract, expressing are limited by the words in which the several any purpose to refer to the specifications for references are couched. The proceedings and the details respecting the rights, obligations, contract called for five separate classes of

or liabilities of the contractor or of the city. work, for each of which separate specifica

The two clauses in the documents called tions were referred to. These specifications "specifications," which are supposed to create were evidently general specifications prepared

liabilities against the contractor, and which in pursuance of some city ordinance and filed are declared to have the effect of making with the clerk, to be made applicable to all the entire proceedings invalid, have no refsubsequent proceedings for the particular

erence whatever to the construction of the classes of work. The work required to be work required to be done, nor to the materidone by the contract and proceedings includ

als of which that work is to be composed. ed the grading and graveling of the street, the

It is true that the contract. after referring construction of a cement curb along part of to the specifications, contains the statement its course, a redwood curb along another part,

that they are made part of the contract. This a cement sidewalk, and a cobble pared gutter. language, by grammatical construction, is As an illustration of the method of reference, limited in its meaning to the specifications the ordinance of intention provided, with re

previously referred to, and manifestly respect to grading and graveling, that the street lates solely to the specifications of the manshould be "graded and graveled in accord- ner of doing the work and the materials to ance with the plans and profile in the office be used therein. It does not have the effect of the engineer and specifications for the con- of incorporating into the contract other parts struction of graveled streets in the city of of the document called "specifications," which Los Angeles on file in the office of the city have no reference whatever to the work, but clerk of said city, said specifications being only to the rights and liabilities of the parnumbered 68," and provided, with respect ties. In Short v. Van Dyke, 50 Minn, 280, 52 to curbing, that "a cement curb be construct X. W. 643, the court, referring to the extent ed *

in accordance with specifica- to which a separate document was made a tions for constructing cement curbs, on file part of a contract by a reference thereto, in the office of the city clerk, said specifica- states that “if the reference be made for a tions being numbered 51." Similar language

Similar language particular purpose, expressed in the contract, was used with respect to each of the other it becomes a part only for that purpose." In classes of work. In the notice for street Ncuval v. Cowell. 30 Cal. 030, where other work, in the ordinance declaring that the documents were referred to for matter of work should be done, in the notice inviting description, the court said that the other proposals for the work, and in the notice of documents were admissible in evidence as award of the contract, the language above part of the agreement, to aid the contract in quoted was repeated word for worl with re- regard to the description, and that "for any spect to each class of work. In the contract other purpose they were foreign to the case." the references with respect to each particular | This rule is in strict accordance with the class of work are again repeatedl in the same rules by which contracts are to be constr.. language as in the resolution of intention and The document referred to, not being signal other documents. It further provides ihat ly the parties, is incorporated in it only for the contractor promises and agrees

the purpose of supplementing the contract to that he will do and perform, or cause to le the extent to which the contract itself is dedone and performed, in a good and workman- ; ficient, and its use must be confined and livi

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