Alabama Farm Bureau Mut. Cas. Ins. Co. v. Hicks
| Decision Date | 21 September 1961 |
| Docket Number | 7 Div. 528 |
| Citation | 133 So.2d 221,272 Ala. 574 |
| Parties | ALABAMA FARM BUREAU MUTUAL CASUALTY INSURANCE COMPANY, Inc. v. James A. HICKS. |
| Court | Alabama Supreme Court |
J. O. Sentell, Jr., and Parker & Salmon, Montgomery, for petitioner.
Rains & Rains, Gadsden, opposed.
James A. Hicks sued Alabama Farm Bureau Mutual Casualty Insurance Company, Inc., in the Circuit Court of Etowah County on a policy of automobile insurance.
The cause was tried before the court without a jury. There was a judgment in favor of the plaintiff in the sum of $350.
The defendant insurance company appealed to the Court of Appeals, where the judgment of the Circuit Court was affirmed.
We granted certiorari to review the opinion and judgment of the Court of Appeals in response to a petition filed by the insurance company.
The insurance company defended the suit in the trial court on the theory that the policy sued on had lapsed for nonpayment of premium at the time Hicks sustained his loss.
Hicks admitted that the policy sued on was in default on the day of the collision but contended that the insurance company was liable nevertheless in that the company's acceptance of a premium after the loss, with full knowledge of the loss, constituted a waiver of the default for nonpayment of premium when due.
The trial court accepted this theory, as did the Court of Appeals.
The insurance company issued its policy No. A94766 to Hicks on November 12, 1955. It was for a six-months term from 12:01 A.M. on November 12, 1955, through 12:01 A.M. on May 12, 1956. The premium paid was $19.10. The policy did not provide for a grace period, nor did it provide for renewal or reinstatement after the expiration of the six-months term. The policy did contain 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.'
Hicks paid a 'renewal premium' prior to May 12, 1956, so that he had coverage under policy No. A94766 through 12:01 A.M. on November 12, 1956.
But Hicks did not pay a 'renewal premium' prior to 12:01 A.M. on November 12, 1956, so his coverage under the policy automatically expired at that time. Forrester v. State Farm Mutual Insurance Co., 97 Ga.App. 618, 103 S.E.2d 619.
Hicks sustained his collision loss on November 24, 1956, at a time when he had no protection under the policy in question.
On November 27, 1956, Hicks went to the office of the insurance company's 'Agent-Manager' for DeKalb County and told a clerk in that office of the loss which he had sustained on November 24th and paid a premium amounting to $19.10, for which he was given a receipt. He was advised by the clerk that she was uncertain as to whether payment of the premium would afford coverage of the loss already sustained and suggested that he contact her employer, the 'Agent-Manager.' On the same day Hicks was told by the 'Agent-Manager' that coverage was doubtful and that he should see the company's adjuster in Gadsden.
When Hicks paid the premium on November 27th the clerk gave him a receipt which shows the payment of a premium of $19.10 on policy No. A94766; that the premium was due on November 12, 1956, and would afford coverage to May 12, 1957. Printed on the receipt are these words: 'No coverage afforded after date due until payment is received.' The receipt also contains the following provision: 'In consideration of premium paid this policy is renewed to 'will pay to' date on reverse side hereof.'
Hicks saw the adjuster in Gadsden, who at first informed him that he did not know whether the loss of November 24th was covered; that he would investigate and let him know. Later the adjuster told Hicks that the loss was not covered.
The payment made by Hicks on November 27th was forwarded to the home office of the insurance company and accepted there.
Hicks filed proof of loss on January 8, 1957.
The Court of Appeals held that the knowledge of the insurance company's 'Agent- Manager' and adjuster was imputed to the company. That holding is not questioned here.
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