American Fire and Casualty Company v. Combs

• Decision Date: 19 November 1954
• Citation: American Fire and Casualty Company v. Combs, 273 S.W.2d 37 (Ky. 1954)
• Parties: AMERICAN FIRE AND CASUALTY COMPANY, Appellant, v. Ed COMBS, Appellee.
• Court: Supreme Court of Kentucky

Page 37

273 S.W.2d 37

AMERICAN FIRE AND CASUALTY COMPANY, Appellant, v. Ed COMBS, Appellee.

Court of Appeals of Kentucky.

Nov. 19, 1954.

W. W. Reeves, Hazard, Redwine & Redwine, M. C. Redwine, Winchester, for appellant.

Noble, Noble & Noble, C. A. Noble, Sr., Hazard, for appellee.

WADDILL, Commissioner.

The appellee, Ed Combs, instituted this action against the appellant, American Fire and Casualty Company, to recover on a contract of automobile collision insurance. The insurance company defended the action upon the grounds that: (1) it had canceled the policy before appellee had suffered his alleged loss, and (2) appellee had no insurable interest in the automobile upon which the policy had been issued. Upon trial, appellee obtained a judgment for $1300.

In view of the fact that we have decided that the cancellation of the policy became effective prior to appellee's loss, we shall confine our discussion to that phase of the case.

The appellant issued and delivered an insurance policy to the appellee in June, 1948, insuring appellee's Ford truck against loss or damage by collision or upset for a period of one year from the date thereof for the amount of the actual cash value of the car. On July 28, 1948, appellee traded his truck in on the purchase of an Oldsmobile automobile. By an endorsement on the original insurance policy, issued August 11, 1948, the appellant insured the Oldsmobile car under the same terms as it had insured the appellee's truck.

According to the testimony of Charles E. Hagar, vice-president of the appellant company, which the appellant attempted to introduce in evidence, but which the court erroneously excluded, the appellant canceled the policy on October 14, 1948, by mailing written notice thereof to appellee at his address in Ison, Kentucky, on October 8, 1948. The cancellation clause in the policy reads:

'This policy may be canceled by the named insured by surrender thereof or by mailing to the company written notice stating when thereafter such cancellation shall be effective. This policy may be canceled by the company by mailing to the named insured at the address shown in this policy written notice stating when not less than five days thereafter such cancellation shall be effective. The mailing of notice as aforesaid shall be sufficient proof of notice and the effective date and hour of cancellation stated in the notice shall become the end of the policy period. Delivery of such written notice either by the named insured or by the company shall be equivalent to mailing.

'If the named insured cancels, earned premiums shall be computed in accordance with the customary short rate table and procedure. If the company cancels, earned premiums shall be computed pro rata. Premium adjustment may be made at the time cancellation is effective and, if not then made, shall be made as soon as practicable after cancellation becomes effective. The company's check or the check of its representative mailed or delivered as aforesaid shall be a sufficient tender of any refund of premium due to the named insured.'

The appellee urges that the attempted cancellation of his policy was ineffective as he did not receive the cancellation notice, and because the company has not returned the unearned premium to him.

In Woodard v. Calvert Fire Ins. Co., Ky., 239 S.W.2d 267, 269,...