Boone v. Standard Acc. Ins. Co. of Detroit

• Decision Date: 05 September 1951
• Docket Number: No. 3799,3799
• Citation: Boone v. Standard Acc. Ins. Co. of Detroit, 192 Va. 672, 66 S.E.2d 530 (1951)
• Court: Virginia Supreme Court
• Parties: JAMES O. BOONE v. STANDARD ACCIDENT INSURANCE COMPANY OF DETROIT AND C. F. JOYNER, JR., COMMISSIONER, DIVISION OF MOTOR VEHICLES. Record

Page 530

66 S.E.2d 530

192 Va. 672

JAMES O. BOONE v.STANDARD ACCIDENT INSURANCE COMPANY OF DETROIT AND C. F. JOYNER, JR., COMMISSIONER, DIVISION OF MOTOR VEHICLES.

Record No. 3799.

Supreme Court of Appeals of Virginia

September 5, 1951.

R. S. Kime and W. H. Jolly, for the appellant.

Martin, Martin & Hopkins and C. R. Langhammer, for the appellees.

JUDGE: EGGLESTON

EGGLESTON, J., delivered the opinion of the court.

On this appeal James O. Boone seeks a reversal of a decree entered in a declaratory judgment proceeding, wherein he was the plaintiff and Standard Accident Insurance Company of Detroit and another were defendants, holding that Boone was not protected by a policy insuring him against liability for bodily injuries and property damage in the operation of his automobile.In that proceeding Boone claimed that a policy issued by the Insurance Company was in effect on February 15, 1949, when the automobile was involved in a collision, as the result of which certain claims for damages had been asserted against him.

The principal facts deducible from the undisputed evidence may be stated thus:

On February 10, 1947, Boone, a resident of Roanoke county, applied verbally to the Standard Accident Insurance Company of Detroit, through C. Preston Brumfield its agent at Roanoke, for a policy insuring him against liability for bodily injuries and property damage arising out of the operation of his automobile.The application was accepted, the premium paid in full, and a policy issued and delivered to Boone, covering him for the period of one year beginning February 10, 1947.

Under date of January 26, 1948, Brumfield wrote Boone as follows:

'On February 10 the Public Liability, Property Damage, Medical Payments, and Comprehensive Material Damage Insurance Policy covering your 1937 Terraplane Coach will renew for a term of one year with a premium of $32.85.

'We should like very much to renew this policy for you, and we should appreciate your notifying us that we may send this policy to you.

'Please let us know about this matter at your earliest convenience.'

Boone did not reply to this letter until February 21, when he came to Brumfield's office and told him that he desired the policy renewed.At that time he paid $16 on account of the premium of $32.85, promised to pay the balance within thirty or sixty days, and a renewal policy was delivered to him.The balance of the premium was not paid within the agreed time, but was settled in full on May 7, 1948.

This policy, in terms, protected Boone for the period from February 10, 1948, to February 10, 1949.

Under date of January 20, 1949, Brumfield's office filled out and mailed to Boone a 'Notice of Expiration' of the policy.This notice was on a printed form in which the italicized words and figures were filled out by a typewriter.The notice read thus:

Affirmed.

'NOTICE OF EXPIRATION THIS IS NOT A BINDER

'C.PRESTON BRUMFIELD & COMPANY

'General Insurance

'510-511 Colonial-American Bank Bldg. Phone 7891 Roanoke, Virginia

'January 20, 1949

'Mr. James O. Boone

R.F.D. 2

'Boones Mill, Virginia

'Please take notice -- the policies of insurance listed below 'Insuring 1937 Terraplane Coach

'will expire as follows:

'Renewal premium for the next year with the above change from Comprehensive Material Damage to $300.Fire, Theft and Windstorm Insurance will be $43.82.

'No doubt you will want the policies renewed, but whether you do or not, please advise.

'If any change is desired please notify at once.

'Your patronage is appreciated.

'C. Preston Brumfield & Company' Boone admitted that this notice was received by him 'toward the last part of the month' of January.

In response to this notice Boone went to Brumfield's office on two occasions, February 2 and 7, respectively.Although he did not expressly say so, the fair inference from his testimony is that he intended to tell Brumfield that he desired the policy renewed.However, both of these visits were after five o'clock p.m., and Brumfield's office was closed.Although Boone was then employed as a carpenter in the construction of a building in the city of Roanoke, he did not notify Brumfield, either by telephone or letter, that he desired the policy renewed.

Under date of February 15, 1949, Brumfield wrote Boone as follows:

'We sent you an expiration notice on January 20 in connection with your automobile insurance which expired on February 10.We will hold your policy in our office until February 25 and if we have not heard from you by that time we shall assume that you do not wish the coverage renewed.'

This letter was addressed to Boone at his correct mailing address and postmarked at six p.m. on the date it was written.It was received by Boone a day or so later, the exact time being not shown in the record.

In the meantime, on the afternoon of February 15, 1949, 'about 5:45 or 6:00 o'clock,' while driving the car, Boone was involved in a collision with another automobile.As the result of this collision the other automobile was damaged and one or more of its occupants injured.

On the same night Boone notified the adjuster for the Insurance Company of the accident by telephone.The adjuster talked with Boone on the next day and learned that there was some doubt as to whether the policy had been renewed.In these circumstanceshe told Boone that he would have to write the home office and ascertain whether he(Boone) was protected by the policy.Before Boone had been apprised of the company's attitude with reference to the matter, he went to Brumfield's offic on February 25, 1949, and tendered the full amount of the premium.Brumfield replied that he could not accept the premium until he had heard from the home office.Shortly thereafter the Insurance Company notified its local representative that it would deny coverage under the policy, and this information was promptly communicated to Boone.

At the time of Brumfield's letter to Boone, on February 15, 1949, Brumfield had in his possession a renewal policy which had been written in the home office, affording coverage on the automobile from February 10, 1949, to February 10, 1950.This policy was complete except for the required countersignature of Brumfield as the local 'authorized agent' of the Insurance Company.

Brumfield testified that if Boone had come in within 'only four or five days' of the date of the policy, February 10, 1949, and paid the premium, or made 'satisfactory terms for its payment,' and if the car had not been involved in an accident in the meantime, he would have countersigned and delivered the policy to him.

Brumfield further testified that frequently, before the expiration dates, he wrote renewal policies and mailed them to certain of his customers, with bills for the premiums, without having been actually notified that these customers desired the policies renewed.But, he said, such transactions were confined to those with whom he had done business for a number of years, whose policies he knew would be renewed and whose credit had been established with him.He had had no such dealings with Boone who was among those customers whose policies were not renewed until the premiums had been paid or satisfactory arrangements made for their payment.

In the trial court Boone made in the alternative two contentions which he claimed afforded him protective insurance:

(1) That the renewal policy for the period of February 10, 1949, to February 10, 1950, although not delivered to him, was in effect; or

(2) That the previous renewal policy, instead of being dated February 10, 1948 and affording coverage for the period of one year therefrom, should have been dated February 21, 1948, the date on which he and Brumfield made arrangements for the payment of the premium, and should have run for a period of one year from the latter date, which would have included the date of the accident, February 15, 1949.

In a written opinion the lower court held against both of these contentions which are reasserted on this appeal.

The appellant's argument in support of the first contention runs thus: When the local agent of the Insurance Company accepted a part of Boone's premium on February 21, 1948, for the policy running from February 10, 1948, to February 10, 1949, and extended him a credit for the payment of the balance, it 'entered upon a course of conduct and dealing with Boone' which would reasonably lead him 'to believe that prompt payment of the premiums, as they fell due, was not an absolute prerequisite or condition precedent to coverage' under the policy.Moreover, it is said, it does not appear 'that the company's agent warned Boone about late payments, or in any way put him on notice that lateness in paying his premiums would not be tolerated and would cause his coverage to lapse.'

This reasoning overlooks the basic problem in the case.The fundamental question is not whether Boone had the right to believe from his previous dealings with Brumfield that prompt payment of the premium was not a prerequisite to coverage, but whether there was a meeting of the minds of the parties with respect to the renewal contract of insurance.Stated more specifically the question is, did Boone accept the renewal policy dated February 10, 1949, which the Insurance Company, through its agent, offered to him?

The underlying principle is thus succinctly stated in 44 C.J.S., Insurance, § 232, pp. 968, 969:

'As in the case of contracts generally, it is essential to the creation of a contract of insurance that there be an offer or proposal by one party and an acceptance by the other.The agreement usually is effected by an offer or application by insured and its acceptance by the company, or else by the tender of a policy by the company and its acceptance by insured.Where the latter method is employed, the fact that the policy is issued without prior application by insured does not prevent its going into effect.A person has a right...