Carolina Aviation v. Glens Falls Ins. Co.
| Citation | 51 S.E.2d 757,214 S.C. 222 |
| Decision Date | 08 February 1949 |
| Docket Number | 16181. |
| Parties | CAROLINA AVIATION, Inc. v. GLENS FALLS INS. CO. |
| Court | United States State Supreme Court of South Carolina |
Sam R. Watt and Rufus M. Ward, both of Spartanburg, for appellant.
Warren N. Martin and Mann & Arnold, both of Greenville, for respondent.
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 defendnats. 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. Michaelsen, after reference to the existing Glens Falls policy, as follows
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 application was not receival 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 carsh, but he did not recall if he heard on Saturday night (the 28the 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 liability 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 obligated the insurance company. The witness received the latter 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 it in an amount 'to be determined' and that the amount of $4,000 was later determined, which was within his authority. The testimony at this point is quoted: After the loss a formal written application for insurance upon the Stinson plane was submitted to the general agency. After the foregoing testimony the witness said that although Mr. Brown's letter was received by Seibels, Bruce & Company on July 28th (Saturday) it did not receive his attention until July 30th (which was after the crash of the plane but inferably before the loss by theft) and that it was the practice to date binders back to the time of the receipt of the application, in order to protect the insured, which in this instance was July 28th. A component parts policy is one which by an endorsement allocates the insurance in certain limits upon specified parts of the plane and is ordinarily used when the total insurance is less than half of the list price of the plane or when it is a war surplus plane. This allocation to parts is not used in the case of a new plane which the Stinson was. First knowledge of the crash of the plane came to the witness by letter dated August 18 which advised that it was a total loss, and at that time the necessary information to prepare a policy had not been received and no premium had been paid. Associated Aviation Underwriters, which had been joined as a defendant, is not a corporation, has no property, but is a service department for the aviation business of the member insurance companies. Seibels, Bruce & Company does not deal with property owners who apply for insurance, but only with local agents such as the Furman Company and its employee, Mr. Brown. A policy was not issued in this instance and was not intended; instead, the witness intended to endorse the existing policy with a 'rider' whereby the Stinson plane would be substituted for the Waco, but this was not done because Associated Aviation Underwriters never recognized the change although it was...
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