Beard v. Motorists Mut. Ins. Co.

• Decision Date: 07 December 1978
• Docket Number: 1870 of 1976
• Citation: 9 Pa. D. & C.3d 321
• Parties: Beard v. Motorists Mutual Insurance Co
• Court: Pennsylvania Commonwealth Court

9 Pa. D. & C.3d 321

Beard v. Motorists Mutual Insurance Co

No. 1870 of 1976

Common Pleas Court of Westmoreland County, Pennsylvania

December 7, 1978

Motion for new trial.

Jon M. Lewis, for plaintiffs.

Kunkle, Walthour & Garland, for defendant.

OPINION

LOUGHRAN, J.

This case arises as the result of an action in assumpsit commenced by plaintiffs against defendant to recover benefits pursuant to the provisions of an automobile insurance policy issued by defendant. An answer was filed by defendant setting forth that the policy upon which suit had been instituted had been canceled for non-payment of a premium.

At the trial of the case herein plaintiff wife testified that she had received a notice of failure to pay to defendant insurance carrier a premium for an insurance policy on a vehicle that her husband had recently purchased and that she returned the cancellation notice with payment by a check she wrote for the required premium. She indicated that check No. 152 dated September 5, 1975, payable to defendant insurance company, was mailed on September 5, 1975, so that it would arrive within the specified time at defendant's Columbus, Ohio, address. She stated she properly addressed the envelope, recalls placing the check in the envelope, stamping the envelope and placing it in the mailbox in Ligonier, Pa.

Also produced at the trial were a series of cancelled checks and the check register which supported the testimony of plaintiffs in that the check stub was in proper sequence.

Further testimony was offered by plaintiff of a postal service employee indicating the time period that it would take a letter to go from Ligonier, Pa. to Columbus, Ohio, " in the due course of mails."

Defendant, Motorists Mutual Insurance Company, countered the testimony presented by plaintiffs through the testimony of an officer of defendant corporation that the check of plaintiffs was not received. The case was tried before the Honorable Charles H. Loughran on April 19, 20 and 21 of 1978, with the jury rendering a verdict in favor of plaintiffs in the amount of $ 8,612.14. Defendant filed a motion for judgment n.o.v. and a motion for a new trial and it is the disposition of these two motions which is before the court en banc at this time.

Defendant initially makes an argument that the notice of cancellation sent by defendant company to plaintiff did not authorize payment by mail and cites as support for this proposition the case of Beeman v. Supreme Lodge S. of H., 215 Pa. 627, 64 A. 792 (1906). The Beeman case is distinguishable factually on the ground that the letter was deposited in insufficient time to be delivered at the appropriate time in order to let the insurance policy lapse. Further, the Beeman case was essentially decided on the fact that:

" The by-laws provided a method by which the member could compel the lodge to reinstate him, and also method by which the widow could enforce her claim to death benefits. The mode pointed out was not followed, and hence the present action cannot be maintained. The by-law in question does not deprive the beneficiary of her right to enforce her claim in a court of law, but provides that before any suit at law or in equity shall be instituted, the remedies provided by the society shall first be exhausted."

Thus, the regulation in Beeman is distinguishable since the Beeman case was decided on an exhaustion of remedy issue. Plaintiff failed to properly submit her claim; therefore, Beeman is distinguishable on that factual issue as well as the fact that the presumption of receipt in due course of the mails was rebutted by the fact that it was not deposited in sufficient time to be received.

In further support of this position defendant cites the case of Friedburg v. The Bull Dog Auto Fire Insurance Association, 31 Dauph. 235 (1928). In Friedburg, the company did not expressly authorize a policyholder to transmit a premium by mail. However, the court found an implied authorization by mail and stated at page 237:

" If the insurance company, expressly or by implication, authorizes a policy holder to transmit a premium by mail, and the remittance is put in the mails in time to reach the company, in due course, on or before the date when the premium falls due, it will be regarded as a sufficient payment. Ill. Life Ins. Co. v. McKay (Ga.) 64 S.E. 1131. In such a case the insured uses the United States Mails as his agent with the assent of the company."

Plaintiffs' verdict was upheld. Thus, it appears that Friedburg is not held for the same proposition as that indicated in defendant's brief. Friedburg should be cited for the proposition that prior dealings of an insurance company as well as express provisions of the policy may be used to indicate the proper authority for remittance and in this case that remittance would be by mail. Hence, it is the opinion of this court that, since defendant insurance company used mail to notify plaintiff of premium due, it impliedly authorized plaintiff policy holder to transmit her premium by mail and as well use the United States mails as her agent with the assent of defendant company.

Defendant argues in its brief in its second argument that a check is a conditional payment and not absolute payment; therefore, it should not be considered as payment. However, it is suggested to the court that a more correct statement of the law would be that a check is payment. A case that came up recently in this regard is Douglass v. Grace Bldg. Co., Inc., 447 Pa. 289, 383 A.2d 937 (1978). In that case, which involved a redemption at a treasurer's tax sale, a check was given in...