the broker is his agent, and that consequently the act or knowledge of the broker is his act or knowledge. Many important illustrations of this principle can be found in the cases of our state supreme courts. In Sellers vs. Commercial Fire Insurance Co. (Alabama, 16 Southern Rep., 798) the court held, "that the broker was the agent of the insured and not of the company, and that any misrepresentations in the application, due to an error of the broker, which were made warranties, avoided the policy;" and in Pennsylvania we find (Hamblet vs. City Insurance Co., U. S. D. C., 19 Pittsburg Legal Journal, 51) that "a broker who is employed to procure insurance must be regarded in such matter as the agent of those employing him, and his concealment from the company of any material fact, if such concealment be wilful or intentional, is the concealment of his employer." Another representative case, illustrating the importance of the distinction between insurance agents and brokers, is that of The Pottsville Mutual Fire Insurance Co. vs. Minnequa Springs Implement Co. (100 Pa. St., 137). According to the facts of this case, the policy required the payment of the actual cash premium to the company before becoming valid. "A," the property owner, applied to "B," a broker, for insurance, and "B" arranged to procure the policy through "C," another broker. "C," in turn, found it convenient to apply to broker "D" for the insurance, and "D" obtained the policy from an authorized agent of the company. The policy when received by "D" was delivered to "A" through the hands respectively of "C" and "B," who, it will be remembered were brokers. When "A" received the policy, he paid the premium to "B," who, in turn, paid it to "C." During the interval that "C" held the premium, and before passing it on, the property was destroyed. The company refused to pay the claim on the ground that there had been no payment of the premium, since "C," a broker, was the agent for all purposes of the insured and not the company.

The court held that since "B," "C," and "D" were all prokers and the agents of "A," payment of the premium to any of these parties was not payment to the company, and loss having occurred, the company could not be held liable.

It should be stated, however, that the courts have de cided differently in cases like the above example, where it can be shown that arrangements have been made whereby the broker makes a periodical settlement with the company for premiums collected. In the case of Riley vs. Commonwealth Mutual Fire Insurance Co. (110 Pa. St., 144), "A" requested a broker "X" to procure for him a fire policy, and "X" obtained the same from "C," who was the agent of the company. "X" received the premium from "A," but retained it, expecting to keep the same until the end of the month when the usual monthly settlement between himself and the company was to be made. While thus retaining the premium a loss occurred, whereupon "X" tendered the premium to "C," who refused to take it. Although the policy contained a provision, just as in the previous case, that there should be no binding contract until the actual cash premium had been paid to the company, the court held that, owing to the relation of debtor and creditor which existed between the broker and the agent of the company, the policy was valid and the agent obliged to accept the premium. So also in the State of New York (Bini vs. Smith, N. Y. S. C., Aff. Div., 55 N. Y. Sup., 842) it was decided that where a broker was authorized to collect premiums on policies, "and had a running account with its general manager, in which the premium was charged, and gave the general manager a note for the balance due on his account, the broker was the company's agent, and the company is liable for a loss though the premium was never accounted for."

The Powers of the Agent.-The general rule relating to the powers of 'agents is stated by Elliott as follows: "An agent may bind his principal when acting within the scope

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of his authority, and his power will be determined not alone by the actual but also by the apparent or ostensible authority."" A general agent's powers are coextensive with those of his principal within the limit of the particular business or territory in which such general agent operates. A special agent's powers extend to anything necessary for the accomplishment of the particular transaction in which he is engaged. From the standpoint of the insured, general powers may be assumed if the agent has apparent authority, but the assumption, as we have seen, must be based on substantial evidence.

Since the acts of the general agent are the acts of the principal, it follows that he can waive conditions in the policy and make special arrangements with the insured, subject, however, always to any legal limitations that may have been placed upon his authority, and which are known to the insured. In other words, the company is bound by the acts of its agent, if acting within the scope of his apparent authority. Wolff defines the power of waiver by the agent in the following manner:

"A provision in a fire insurance policy that a waiver of its conditions must be in writing attached to or indorsed on the policy by an officer, agent, or representative of the company" (such a provision is found in the standard fire policy) "may be waived by the company acting through such officer, agent, or representative, As between the company and insured, the company is bound by the acts of its general, local, or sub-agents, regardless of what they are called, if the insured, influenced by the manner in which the company holds him out to the world, is justified in accepting them as, and believing them to be, clothed with such authority. An insurance company may limit the authority of its agents, but such limitations must be so indicated to the insured that he, as a prudent man, will rely at his peril on any act in excess of such authority."2

1 Elliott, p. 137.

2 Wolff's "Law of Insurance Agency," p. 75.

The following examples are selected from Wolff as illustrations of the many instances that may arise where an agent can bind his company by exercising his power of waiving conditions of the policy:

"If the agent knows warranties by the insured are false, and yet issues the policy, the warranties are waived" (p. 77).

"By retaining the premium with knowledge of a forfeiture of a policy condition, such forfeiture is waived” (p. 77).

“By a prior agreement with the insured, an agent can waive conditions of the policy as to sole ownership" (p. 77).

"An agent may consent to prior or subsequent insurance, although the policy forbids it" (p. 78).

"An agent may, by indorsement on the policy, bind the company to an assignment of interest" (p. 79).

"An agent can waive a condition against incumbrances by an indorsement on the policy" (p. 79).

"An agent can by written indorsement permit the removal of insured goods to another location" (p. 80).

"He may consent to a vacancy and insure property he knows to be vacant" (p. 81).

"He may extend credit for a longer time than the company has authorized" (pp. 81 and 82).

"If the agent has authority to adjust a loss he may waive proof of loss" (p. 145), “and can bind the company on an admission of liability" (p. 146).

"By his statements he can waive the company's right to object to proof of loss, or take advantage of the delay in submitting them" (p. 147).

"By his admissions he can bind the company when adjusting a loss" (p. 148), "or prevent the company from suing" (p. 148). "Delivery of proof of loss to the agent of a company is delivery to the company" (p. 151).

"The company is bound by its acceptance of a compromise settlement of a loss made by its agent" (p. 152).

In all cases, however, if the company wishes to protect itself, it can limit the powers of the agent in any manner thought desirable. Such restrictions on the agent's author

1 See the many legal case citations for each of these examples.

ity will prove effective in all cases where the insured had knowledge of the same. If the limitations are contained in the application which the insured signs, the courts have generally regarded them as binding against the applicant. But where the limitations are inserted in the policy considerable difference of opinion exists. In some states the courts have refused to uphold provisions in the policy which limit the authority of the agent, whereas others regard them as effective against the insured who has agreed to be bound by the terms of the contract. The weight of authority, however, is to the effect that policy provisions which define the future powers of the agent should be enforced against the insured in matters which arise subsequent to the issuance of the policy. It is essential to bear in mind that, as regards an agent's powers, a distinction should be made between those acts which relate to the solicitation and writing of the policy, and those which pertain to future events, such as the giving of permits and the waiving of policy conditions. The company, however, is not permitted to limit its powers to act through its officers and general agents by inserting a provision in the policy to this effect. Although the standard fire policy provides that "no officer, agent, or other representative of this company shall have power to waive any provision or condition of this policy except such as by the terms of this policy may be the subject of agreement indorsed hereon or added hereto, and as to such provisions and conditions no officer, agent, or representative shall have . . . such power or be deemed or held to have waived such provisions or conditions unless such waiver, if any, shall be written upon or attached hereto," the courts have decided that the company can waive this provision like any other, and that the general agent has power to do what the company can do. In New York (Weed vs. London, etc., Insurance Co., 116 N. Y., 117) it was decided that "notwithstanding the provision of the policy that anything less than a specific