Bartleman v. Humphrey, 53783
| Decision Date | 12 May 1969 |
| Docket Number | No. 1,No. 53783,53783,1 |
| Citation | 441 S.W.2d 335 |
| Parties | Ralph O. BARTLEMAN, Respondent, v. Richard King HUMPHREY, Defendant, M.F.A. Mutual Insurance Company, Garnishee-Appellant |
| Court | Missouri Supreme Court |
J. David Collins, Hadley E. Grimm and Edwards, Hess & Collins, Macon, Walter Allen, Brookfield, for respondent.
Somerville, Cleaveland & Macoubrie, Ronald L. Somerville, David P. Macoubrie, Chillicothe, for appellant.
HIGGINS, Commissioner.
Garnishment under execution on $27,000 default judgment in favor of Ralph O. Bartleman against Richard King Humphrey in personal injury action. Garnishee-appellant was the liability insurer of defendant Humphrey and seeks relief from jury verdict and judgment in the garnishment proceeding for $33,471.89, principal and interest.
On September 8, 1962, Ralph O. Bartleman sued Richard King Humphrey for damages for personal injuries and property loss in an automobile collision which occurred about 6:10 a.m., January 9, 1961. Garnishee refused to defend the suit. On January 21, 1964, default judgment was entered in favor of Bartleman and against Humphrey for $27,000 and costs. Execution, issued April 13, 1964, was served on M.F.A. Mutual Insurance Company by garnishment of proceeds of insurance policy No. 24--1--354346--01 with policy period from 10 a.m., November 29, 1960, to 12:01 a.m., February 29, 1961, issued by M.F.A. to Richard King Humphrey. Interrogatories exhibited to M.F.A. by Bartleman inquired whether M.F.A. was indebted to Humphrey; whether Humphrey had a policy of automobile liability insurance in force at 6 a.m., January 9, 1961, and whether M.F.A. was obligated to pay judgments against Humphrey under policy no. 24--1--354346--01 during its period. Garnishee's answers were a denial of these inquiries, asserting as its reason, failure on the part of Humphrey to pay the premium. Bartleman's denial of M.F.A.'s answers to his interrogatories alleged that although an $11.45 check tendered for the premium was not honored due to insufficient funds in the account, the policy in issue was in effect at the time of the accident because M.F.A. is estopped to deny the coverage in that it waived punctual payment of the premium, it induced Humphrey to believe the policy was in force, and it accepted the check as umconditional payment of the premium. M.F.A's reply admitted the collision, denied the alleged coverage, and reiterated its reason for denial, nonpayment of premium.
Respondent's case was submitted by Instruction 2:
'Your verdict must be for plaintiff Ralph Bartleman and against Garnishee M.F.A. Mutual Insurance Company if you believe:
'First, Garnishee M.F.A. Mutual Insurance Company treated the check as payment of the premium on the policy issued December 9, 1960, or 'Second, Garnishee M.F.A. Mutual Insurance Company delayed unreasonably in presenting the check to the Bucklin State Bank and such delay was prejudicial to defendant Humphrey.'
Appellant's theory of the case was submitted by Instruction 3:
'Your verdict must be for Garnishee, MFA Mutual Insurance Company, and against Plaintiff, Ralph O. Bartleman, if you believe:
'First, the check dated November 29, 1960, in the amount of $11.45, made payable to MFA Mutual Insurance Company was never honored or paid by the Bucklin State Bank, and
'Second, Garnishee, MFA Mutual Insurance Company, did not accept the dishonored and unpaid $11.45 check as payment of the premium regarding said policy mailed to R. K. Humphrey and/or Nadine Humphrey at Bucklin, Missouri, on December 13, 1960, and
'Third, Garnishee M.F.A. Mutual Insurance Company notified R. K. Humphrey and/or Nadine Humphrey before 6:00 o'clock a.m. on January 9, 1961, that said policy mailed to them on December 13, 1960, had lapsed because the premium on said policy had not been paid.'
Appellant contends that its motion for directed verdict should have been sustained because respondent failed to make a submissible case. The argument is that respondent failed to prove that defendant Humphrey paid any consideration for the policy in issue; that appellant accepted the check for $11.45 as unconditional payment of the premium; that appellant waived conditional acceptance of the check; that appellant was estopped from asserting that the check was not received as unconditional payment; that appellant induced defendant to believe the policy was in force at the time in question.
These cases usually have bizarre circumstances, and this is no exception. In September, 1960, Richard Humphrey and his wife, Nadine, moved from Prairie Home to Bucklin, Missouri, where Richard had a job with Leathers Grain Company. They lived on a farm about four miles from Bucklin, and he worked for Leathers for about a month. They owned a 1958 Plymouth which was insured by M.F.A. under a policy, Exhibit 1, which had a policy period from 12:01 a.m., May 29, 1959, to 12:01 a.m., Novenber 29, 1959, and which had been kept in force by payment of specified renewal premiums to expire at 12:01 a.m., November 29, 1960. In November, 1960, the Humphreys received, Exhibit A, appellant's 'Renewal Certificate' with notice of renewal premium due on or before 12:01 a.m., November 29, 1960. The renewal certificate would, upon payment of premium, extend coverage to 12:01 a.m., May 29, 1961, and provided that it was void if the renewal premium were not received by 12:01 a.m., November 29, 1960, or if a check for premium were dishonored. The Humphreys did not pay the premium described in the renewal certificate and, as a result, the policy to which it related expired at 12:01 a.m., November 29, 1960.
In lieu of the renewal of that policy, Mrs. Humphrey went to the office of appellant's agent in Bucklin, J. W. Ralston, to arrange for new insurance with different coverage. Mr. Ralston prepared Exhibit 2, 'Application For Change--Automobile--MFA Mutual' which, with respect to premium payment, said, 'Attach check,' and which Mrs. Humphrey, with Richard's authority, signed, and which contained a 30-day binder executed on behalf of M.F.A. by Mr. Ralston. Mrs. Humphrey gave Mr. Ralston a check, Exhibit 3, on the Bucklin State Bank, dated November 29, 1960, for $11.45, to cover premium for 3-months' coverage from 10 a.m., November 29, 1961. The Humphrey's bank statement, Exhibit B, showed a balance November 26, 1960, of $13.20, with no withdrawal until sometime November 29, 1960, when a check for $2.20 was paid. On December 1, 1960, withdrawals left a balance of $0.34; balance December 2, 1960, was $0.09; and on January 23, 1961, it was $0.00. A $65.00 deposit was made February 11, 1961. The binder portion of the application provided for the binder to be effective upon execution by an authorized agent and to be void if any check tendered in payment of premium were not honored. Mr. Ralston mailed the check and application to appellant's office in Columbia, Missouri; they arrived there Thursday, December 1, 1960. The usual course of processing such check and application (one of approximately 5,000 per day) was to send them to the filing department for the policy folder and then forward the three items to the policy service department for review and preparation of a work sheet showing changes. All items went next to the I.B.M. department for punch cards which result in the printing of the policy and arrangement of premium reserve. The policy in issue, Exhibit 4, described in the application, was thus printed December 9, 1960. It had a policy period from 10 a.m., November 29, 1960, to 12:01 a.m., February 29, 1961. The policy was mailed by appellant to the Humphreys at Bucklin December 13, 1960, and they accepted it upon receipt. No other item was in the mailing envelope. On the same date, December 13, appellant deposited the $11.45 check in its account and the endorsement stamp indicates 'for deposit only.'
The policy in question does not contain the language of the renewal certificate and binder, i.e., it does not say that it is effective only upon condition the premium was paid. Its recital in this respect is: 'In reliance upon the Declarations * * *, and for payment of the premium * * *, MFA Mutual Insurance Company * * * agrees with the named insured * * *.' Cancellation right is given to the insurer by the policy upon giving written notice to insured not less than ten days prior to the effective date of cancellation. No such notice was ever sent or received. The policy stated that it embodied all of the agreements between insurer and insured.
Boone County National Bank, upon receiving appellant's deposit, sent the $11.45 check in the usual and customary channel for collection to Mercantile Trust Company in St. Louis which processed it through the Federal Reserve Bank in St. Louis which sent it to Bucklin State Bank which refused to pay it December 16, 1960, for lack of sufficient funds. The check was returned through the channel to Mercantile which sent it on December 18, 1960, to Bucklin State for collection resulting in a second refusal. Mercantile received the check after second refusal December 22, 1960, and Boone County received it December 23, 1960. Boone County, on Friday, December 23, 1960, notified M.F.A. that the check had not been paid and M.F.A. retrieved the check that date. Between December 13 and December 23, 1960, when it was charged for the check, M.F.A. had credit with Boone County for the $11.45. Boone County had never instructed Mercantile to process the check twice. When the check was returned, the amount was deducted from premium reserve by M.F.A.
December 23, 1960, was Friday and, due to Christmas, appellant's next working day was Tuesday, December 27, 1960. Around December 24, the Humphreys and their children went to Silex, Missouri, to spend the Christmas holidays. They did not return to the Bucklin farm until the night of January 1, 1961, the night before the children were to return to...
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