Alabama Farm Bureau Mut. Cas. Ins. Co. v. Hicks

• Decision Date: 04 October 1960
• Docket Number: 7 Div. 587
• Citation: Alabama Farm Bureau Mut. Cas. Ins. Co. v. Hicks, 133 So.2d 217, 41 Ala.App. 143 (Ala. App. 1960)
• Parties: ALABAMA FARM BUREAU MUTUAL CASUALTY INSURANCE COMPANY, Inc. v. James A. HICKS.
• Court: Alabama Court of Appeals

Page 217

133 So.2d 217

41 Ala.App. 143

ALABAMA FARM BUREAU MUTUAL CASUALTY INSURANCE COMPANY, Inc. v.James A. HICKS.

7 Div. 587.

Court of Appeals of Alabama.

Oct. 4, 1960.

Rehearing Denied Nov. 29, 1960.

Clarence Simmons, Jr., Gadsden, and Thos. F. Parker and J. Thaddeus Salmon, Montgomery, for appellant.

Rains & Rains, Gadsden, for appellee.

PRICE, Judge.

This appeal is from a judgment for the plaintiff in an action on an automobile collision insurance policy.

The policy sued on was issued on November 12, 1955, for a six months term and contained the following renewal provision:

'The term of the policy shall be from 12.01 A.M., Central Standard Time as to each of said dates, and for such terms of six calendar months each thereafter as the required renewal premium is paid by the insured on or before expiration of the current term and accepted by the company.'

The policy was renewed under the above clause until November 12, 1956.The insured, appellee, had a collision loss on November 24, 1956.On November 27, 1956, appellee went to the office of the insurance company's 'Agent-Manager' of DeKalb County, told a clerk about the loss, and paid his then delinquent premium, being told by the clerk that coverage for the loss which had occurred before payment of the renewal premium was uncertain.The clerk referred appellee to the 'Agent-Manager' for DeKalb County.Appellee told the 'Agent-Manager' about the loss and was again informed that coverage was doubtful but that appellee should see the company adjustor in Gadsden.Appellee went to the adjustor and reported the loss.The adjustor said he didn't know whether the claim was covered and would find out and let him know.Subsequently the adjustor told appellee that the loss was not covered.Appellee filed proof of loss on January 8, 1957.

The evidence shows that the payment made by appellee on November 27, was sent to the home office of appellant and accepted there.Appellant has made no reply to the proof of loss filed by appellee and had made no return or tender of return of any part of the premium nor notified appellee in any way that the six months premium paid on November 27, would cover a term of coverage to be computed from the date of payment rather than the renewal date of the policy.In short, appellant has accepted the premium for a full six months insurance and denied coverage for approximately 1/12 of that time.

The only issue raised by the pleadings was whether the policy of insurance was in force at the time of the loss.The renewal receipt issued by appellant contained the stipulation that no coverage was afforded after due date until payment was received.On the trial below, the theory of plaintiff was that by accepting the full six months premium the defendant had recognized the policy as being in force for the full six months and thereby waived the provision for payment on or before expiration of the current term.

Appellant assigned eight errors in the record.Four of these (Numbers 1, 3, 6 & 8) are specifically waived by appellant in brief.Assignment of error number two is:

'For that the Court erred in overruling appellant's (defendant's)demurrers to appellee's (plaintiff's) replications one (1), four (4), and five (5).'

Replications one and four were replications of the general issue and were not demurrable.Varnon v. Nabors, 189 Ala. 464, 66 So. 593.Therefore, part of this assignment of error being clearly without merit, the whole assignment of error must be considered as without merit.Sovereign Camp, W. O. W. v. Waller, 232 Ala. 170, 167 So. 563.Crescent Amusement Company v. Knight, 263 Ala. 445, 82 So.2d 919.

The remaining three assignments of error are that the court erred in rendering judgment in favor of appellee.The issues presented on this appeal are: (1) Does the acceptance of a renewal premium after default and after a loss has occurred, with knowledge of the loss, amount to a waiver of the default, and (2) If so, was there such a waiver in the present case?

The doctrine of waiver has been applied in many situations to deprive an insurer of a defense based on a breach of condition by the insured, where the insurer accepts the premium with knowledge of the breach.In General Insurance Company of America v. Killen, 270 Ala. 604, 120 So.2d 887, 895, the court reviewed the law in this state applicable to waiver by acceptance of premiums, saying:

'The basic principle is declared to be as follows:

"The acceptance of premiums by the insurer, with knowledge of a breach of condition or ground for forfeiture, ordinarily constitutes a waiver or estoppel.'45 C.J.S.Insurance§ 716a, p. 690.In the case of Life and Casualty Ins. Co. v. Eubanks, 19 Ala.App. 36, 94 So. 198, the court affirmed the judgment for the plaintiff in the lower court, which involved an action on an accident insurance policy on the principle that a waiver results from the acceptance of a premium from the insured after loss with knowledge of the breach of condition or ground of forfeiture.

'In the case of Washington Nat. Ins. C. v. Scott, 231 Ala. 131, 164 So. 303, 304, this court said:

"There is no principle of insurance law more firmly settled, nor better grounded in justice and reason, than that an insurer, who receives and retains premiums, the very consideration for carrying the insurance risk, with knowledge of facts which, under stipulations for his benefit, would, in the absence of such knowledge, empower him to treat the policy as having never been in force, or as being no longer in force, will be held to have waived such stipulations.Waiver, strictly speaking, is a matter of intent.But, in such case, no proof of actual intent is required.Any other intent, in such case, would work a positive wrong or fraud on the insured.The law charges the insurer with the intent to waive under the doctrine of estoppel.'

'SeeBradford Funeral Service v. Burks, 38 Ala.App. 111, 76 So.2d 783;Southern States Life Ins. Co. v. Dunckley, 226 Ala. 588, 148 So. 320, 323.In this last mentioned case this court quoted a rule of law stated in 14 R.C.L. p. 1181, 1190, as follows:

"Where an insurer has knowledge entitling it to treat a policy as no longer in force, and thereafter it receives a premium on the policy, it is estopped to take advantage of the forfeiture.It cannot treat the policy as void for the purpose of defenses to an action to recover for a loss thereafter...