Carolina Aviation Inc v. Glens Falls Ins. Co, No. 16181.

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: STUKES
• Citation: 51 S.E.2d. 757
• Decision Date: 08 February 1949
• Docket Number: No. 16181.
• Parties: CAROLINA AVIATION, Inc. v. GLENS FALLS INS. CO.

51 S.E.2d. 757

CAROLINA AVIATION, Inc.
v.
GLENS FALLS INS. CO.

No. 16181.

Supreme Court of South Carolina.

Feb. 8, 1949.

[51 S.E.2d. 758]

Appeal from Common Pleas Circuit Court, of Greenville County; W. B. McGowan, Judge.

Action by Carolina Aviation, Inc., against Glens Falls Insurance Company and another, upon an alleged oral contract of insurance. Verdict was directed for the defendants. From an order granting a new trial as to the named defendant, such defendant appeals.

Affirmed.

Sam R. Watt and Rufus M. Ward, both of Spartanburg, for appellant.

Warren N. Martin and Mann & Arnold, both of Greenville, for respondent.

STUKES, Justice.

This is an action upon an alleged oral contract of insurance. At the conclusion of the evidence the trial judge directed a verdict for the defendants. Upon motion for new trial he reversed his former holding with respect to appellant and granted a new trial as to it. This appeal followed.

In evidence was a policy issued to respondent by appellant dated June 4, 1945 which insured against theft, robbery and pilferage a Waco airplane in the face amount of $2,000, which, by policy endorsement dated July 12, 1945, was prorated in stated amounts against various specified parts of the plane. The annual premium was $70. The insured plane was flown from the Greenville home of respondent to Atlanta on July 27, 1945 and traded for a Stinson Voyager 10 plane and a difference of $1,900 in cash was paid by respondent. An official of respondent called over the telephone an employee of Alester G. Furman Company, the local agents with whom respondent dealt and who had countersigned and delivered the existing policy, told him of the trade and asked him to insure the newly acquired plane. This employee of the Furman Company was Mr. Brown. He returned to his office and wrote a letter to the general agency in Columbia, Seibels, Bruce & Company, attention Mr. Michael-sen, after reference to the existing Glens Falls policy, as follows: "The Carolina Aviation, Inc., has just traded the Waco UPF-7 for a Stinson Voyager 10. I will get the proper numbers and send them to you tomorrow. Please keep this bound. Yours very truly, Alester G. Furman Co., By (Signed) Henry A. Brown."

This letter was received in the general agency in Columbia on July 28, 1945, but nothing was done then towards the issuance of a new policy or endorsement of the old one to formally effect the requested coverage. On an attempted commercial flight to Washington the Stinson plane crashed late that day near Farmville, Va., and the pilot, respondent's employee, was injured to an extent which required hospitalization. He was able however to telephone that night to respondent in Greenville and report the accident. About the same time he engaged the local airport to bring in the wrecked plane and protect it. This was not done promptly and afterward it was discovered that instruments and parts of the plane had been removed. It is for the alleged cost of replacement and installation of them that this action was brought for the sum of $2,234.85 and interest.

The answer contains a limited general denial, admits respondent's (quoting) "application to cancel the insurance coverage on the Waco airplane and that a policy covering the Stinson airplane be issued" but alleges that it was ineffective without the agreement of the insurer and the appli-

[51 S.E.2d. 759]

cation was not received until July 30th, two days after the new plane was wrecked, and appellant never insured it, or agreed to insure it: further defense was alleged from the claimed negligence of respondent in its failure to properly protect the wrecked plane.

The respondent undertook to prove its case principally by the testimony of Messrs. Brown and Michaelsen, whom it called as witnesses. Mr. Brown testified that he was an old employee of the Furman Company and worked in its insurance business, particularly in its representation as agent of the appellant insurance company which writes aviation insurance, for which oral applications were taken and resulting policies issued. The witness was himself without "binding authority" which he procured from the Columbia agency, dealing there with Mr. Michaelsen. He recalled that on July 27, 1945 an official of respondent called him at night about insurance on the Stinson plane and he returned to his office and wrote the letter to his company, he said, which was Associated Aviation Underwriters and Glens Falls Insurance Company, addressed it to Mr. Michaelsen and mailed it to Columbia that night. The next he heard was of the crash, but he did not recall if he heard on Saturday night (the 28th) or Sunday or Monday following. The information came to him from respondent, whereupon the witness notified the company and Mr. Michaelsen. The company thereupon referred the matter to a local adjuster, but the report did not refer to a theft but merely to the crash. There was a standard premium rate applicable to airplane policies and the witness would render statements from time to time to respondent and at the end of the month. The policies were written for terms of one year. The amount of insurance applied for on the new plane was $4,000. "Hull coverage" was the type of airplane insurance procured from appellant and Mr. Michaelsen; this includes theft. The Furman Company was the "authorized representative" of appellant and the witness, Brown, was a licensed agent. The existing policy, covering the Waco, was effective June 4, 1945, but the endorsement was dated July 12th, effective retroactively as of the date of the policy, June 4th. Separate lia bility insurance was also procured on the plane through the witness from Aero Underwriters, Atlanta.

Mr. Michaelsen testified that in 1945 he was an employee of Seibels, Bruce & Company, General Insurance Agents, representing appellant, and he handled aviation matters for them, with "binding authority" from appellant, which means that he was authorized to effect insurance orally or in writing which obligated the insurance company. The witness received the letter in evidence on July 28th and, quoting him: "Accepted the plane (the Stinson) under a binder; I accepted insurance." This he said meant that he bound...