Canal Ins. Co. v. Bush, 42635

Decision Date03 June 1963
Docket NumberNo. 42635,42635
Citation247 Miss. 87,154 So.2d 111
PartiesCANAL INSURANCE COMPANY v. James BUSH and Eras King, d.b.a. Bush and King Trucking Company.
CourtMississippi Supreme Court

Satterfield, Shell, Williams & Buford, K. Hayes Callicutt, Jackson, for appellant.

O. B. Triplett, Jr., Forest, McFarland & McFarland, Bay Springs, for appellees.

LEE, Presiding Justice.

James Bush and Eras King, partners, doing business as Bush and King Trucking Company, by their bill of complaint against Canal Insurance Company, a South Carolina corporation, doing business in this state, and Multiple Peril Underwriters, Inc., a Mississippi corporation, alleged that they obtained, about April 10, 1959, a liability insurance policy on motor vehicles from the defendants, and shortly thereafter and prior to May 14, 1959, the defendants agreed to extend the coverage of bodily injury, property damage, and automobile medical payments to include hired automobiles, the exact premium charge being then undetermined, but to be subsequently made known upon the audit; that the complainants entered upon their contract, and, on November 10, 1959, one of their hired motor vehicles collided with another truck, driven by Joe Smith, Jr. in which vehicle Hugh Hillary Odom was a passenger; that complainants made prompt report thereof to the defendants; that the defendants engaged adjusters who investigated the accident and conducted negotiations toward a compromise, at no time giving the complainants any hint that they were not fully protected under their coverage; and that, after suits were filed on April 29, 1960, and the defendants were requested to defend, they refused to do so. As a result, complainants were required to employ their own attorney at a fee of $1,000 to defend said suits, which said attorney did successfully. The prayer of the bill was that their rights, under the contract should be established and that the defendants should be required to carry out the terms thereof. They also prayed for general relief. At the close of the evidence, they asked to amend their bill so as to extend specific relief to them by a decree in the amount of $1,000 to extinguish their obligation to the attorney whom they had employed, as heretofore stated.

The defendants filed a motion to dismiss, and special and general demurrers, setting up numerous grounds, all of which were overruled. After having obtained leave of the court, they then filed an answer, denying all of the material allegations of the bill and setting up therein certain legal defenses.

It appeared that James Bush and Eras King were partners, doing business under the trade name of Bush & King Trucking Company. They secured a contract job in Hancock County on account of which it was necessary to have protection against accidents. James Bush testified that he applied verbally to Paul T. Whitsett Insurance Agency in Jackson for a policy of insurance. One was written, numbered 349250, of date of April 10, 1959, running for a period of twelve months, with Canal Insurance Company and was received by mail from Whitsett, but not until either the last day of April or the first day of May. It was countersigned by Paul Whitsett as Authorized Representative of Multiple-Peril Underwriters, Inc. Five endorsements 'Countersigned and issued at Jackson, Miss., this 10th day of April 1959 by W. G. Thames, Authorized Agent, Multiple-Peril Underwriters, Inc.' were attached to the body of the policy. Upon an inspection of the policy, Bush noticed that one of the endorsements was a fifty mile limit from the base of operations and another excluded hired car coverage. On May 2, 1959, the wrote Whitsett asking for (1) the correction of an erroneously included vehicle, (2) on account of his office being at Taylorsville and the work in Hancock County, the radius would have to be extended accordingly, and (3) 'about the protection we have for the trucks we hire at different times or the comprehensive liability that we had on one of the old policies. Please check this and let me know.' After the receipt of this letter, Whitsett talked to Bush over the telephone and agreed to extend the radius of operation and write the hired car insurance. The estimated cost of the premium was agreed upon. He accepted the rate and told Whitsett it was satisfactory. After this agreement that they were covered for hired cars Bush said there was no further agreement. Confirming this telephone conversation and agreement, Bush received a letter from Whitsett, dated May 14, 1959, in which he said: 'In quoting to you the rate of $1.50 per $100 for the hired automobile endorsement, I quoted the rate on base limits rather than the increased limits effective in your policy. Because of this error, the premium I gave you is obviously low but in an effort to keep the additional premium as low as possible, I am reporting to the company an estimated hired car cost of some $17,000 rather than the $20,000 you and I had agreed upon. As stated to you over the phone, if your cost runs above this figure, the adjustment can be made on audit. As soon as we have heard from the company as to the exact premium charge for this amendment, I will let you know. Enclosed herewith is a current statement which does not include the additional premium to be charged on the hired car amendment.' (Emphasis supplied.) The bill, referred to, was promptly paid. All endorsements came to the partnership from Paul T. Whitsett Insurance Agency and all premiums were paid to him as soon as bills were received. Subsequently the radius of operation was extended to one hundred and fifty miles by endorsement for the life of the policy 'Countersigned and issued at Jackson, Miss., this 29th day of July 1959 By W. G. Thames, Authorized Agent, Multiple-Peril Underwriters, Inc.'

About November 10, 1959, a truck, owned by Mrs. Fleming, and hired by the partners, was in collision with another vehicle, driven by Joe Smith, Jr., in which Hugh Hillary Odom was a passenger. Bush reported the accident to Whitsett. Without question, adjusters in the employ of Canal Insurance Company began investigating the case. Sometime in December 1959, he received from Canal Insurance Company a hired car endorsement, dated December 10, 1959, to be annexed to the policy, running for the term of the policy. It was not until May 23, 1960, that notice was received from the Insurance Company of denial of liability on its part. After the suits were filed, when the defendants refused to defend the suits, the partners necessarily were required to employ an attorney. They therefore employed Hon. O. B. Triplett, Jr. of Forest, Mississippi, to represent them in the suits for an agreed fee of $1,000. He was successful in having the cases dismissed.

Paul B. Whitsett testified that he operated a business known as Whitsett Insurance Agency in Jackson, Mississippi, handling all lines of insurance. James Bush requested insurance to protect the partners on a contract that they had secured in Hancock County. As he did not have a company of his own through which this insurance could be handled, he contacted Multiple Peril Underwriters, Inc. to secure the insurance on an agreed basis that he was to get a ten percent commission. His discussions were largely with W. G. Thames, President of the corporation. Multiple sent the policy of insurance to him for delivery. The coverage was written by Canal Insurance Company. He complied with the instructions, made delivery, sent a bill to Bush & King, and collected the premium later. Immediately after examining the policy, Bush, by letter, raised the question that it did not provide certain needed coverage, namely, at least a one hundred and fifty mile radius of operation and hired car coverage. Following this conversation, the witness contacted W. G. Thames and told him that Bush had pointed out that the policy had the limited radius of fifty miles, and did not cover hired cars, and that he needed this protection. Thames agreed to extend the radius and gave him the $1.50 per $100 on a basis of $17,000. He then called Bush and told him that the radius would be extended and what the rate would be and Bush said 'We will have to have it and we want it.' Whitsett then wrote the letter of confirmation of May 14th to Bush, of Bush & King. He did not receive a billing from Multiple-Peril on an invoice to cover a premium of $262.20 on this hired car coverage until December 20, 1959. When he submitted it to Bush & King, the same was promptly paid, as usual. The witness said that the endorsement, in effect, showed that the premium was based on a twelve month estimate; that rates for such insurance are based on the hired car cost, and not merely the time to run; and that the premium of $262.20 could be no part of a multiple, based on time, of a rate of $5.61 per $100 on $17,000, as attempted to be claimed by the insurance company. When he was notified about the accident, he reported it through Multiple. When he first heard that a question had arisen as to hired car coverage, he talked to Thames, who appeared to be uncertain. The witness reminded him of their conversation and the fact that he first quoted an erroneous premium and subsequently corrected the rates and the coverage was corrected and supposed to be there. Thames then stated that he recalled the situation and he was sure that the endorsement had been forwarded from his home office and that someone had evidently slipped up on it. He stated positively that he had ordered it from the home office and that someone there had slipped up on it. He said that he would attend to it immediately and would issue an endorsement giving the hired car coverage. When the witness asked if the endorsement would be retroactive, Thames replied that it would be because it was supposed to have been there originally, and the endorsement would provide coverage for that period of time. He testified that the hired car endorsement was to have been...

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