Commercial Cas. Ins. Co. v. Mansfield

• Decision Date: 07 April 1953
• Citation: 98 N.H. 120,96 A.2d 558
• Parties: COMMERCIAL CASUALTY INS. CO. v. MANSFIELD et al.
• Court: New Hampshire Supreme Court

Page 558

96 A.2d 558

98 N.H. 120

COMMERCIAL CASUALTY INS. CO. v. MANSFIELD et al.

Supreme Court of New Hampshire.

April 7, 1953.

As Modified on Denial of Rehearing May 22, 1953.

Devine & Millimet, Manchester, for plaintiff.

Wyman, Starr, Booth, Wadleigh & Langdell, Manchester, for Fidelity & Casualty Ins. Co. of New York.

Frederic J. Grady, Derry, Hughes & Burns and Donald R. Bryant, Dover, for Walter and Dorothy T. Harding.

Walter Pillsbury, Derry, for Richard H. Mansfield, filed no brief.

DUNCAN, Justice.

I. The Commercial Casualty Insurance Company policy. The policy of insurance which was issued by the plaintiff to the defendant Mansfield was styled a 'foreign automobile combination policy.' While it was a single policy, it contained insuring agreements by the Firemen's Insurance Company of Newark, New Jersey, as well as the plaintiff company. It was countersigned at Washington, D. C. by American International Underwriters Corporation as 'Foreign Managers for Both Companies,' and the declarations provided that notice of accident or loss should be given to the latter company. The insuring agreement specified the type of coverage afforded by each insuring company and expressly stated that the insurers agreed 'severally but not jointly with the Insured.' The declarations likewise indicated that coverage for liability for bodily injury and property damage was furnished by the plaintiff, and comprehensive, collision, and automobile marine coverages by the Firemen's Insurance Company.

The policy was forwarded to Mansfield in Japan on May 27, 1949. The policy period was April 23, 1949 to April 23, 1950, and the vehicle described in the policy was delivered to the port for shipment to Japan on May 9, 1949. Mansfield left the United States March 31, 1949.

Article X of the insuring agreements so far as material provided as follows 'This policy applies only to accidents which occur and to direct loss of and damage to the property insured which are sustained * * * while the automobile * * * is (1) within the geographical area specified in Item 7 of the Declarations, or (2) if the named insured's domicile on the effective date of the policy period is outside the United States of America * * *, while within the United States of America * * * for a period not exceeding thirty days during the policy period commencing with the date of the arrival of the named insured or of the automobile, which ever shall first occur.' The geographical area specified, 'in which this policy applies,' was 'Japan.'

The Trial Court ruled that Mansfield's domicile has always been West Hampstead, New Hampshire, and that he was at no time domiciled outside the United States 'so the thirty day grace period in the Commercial Casualty policy * * * did not apply to him.' The Court further found and ruled, 'The Insurance Company waived this territorial provision only insofar as the theft clause and collision clause was concerned; otherwise there was no waiver of the geographical limits of coverage, nor is the Insurance Company estopped to set up the territorial limits provision of the policy as a defense in this proceeding; nor is there any evidence that Mansfield relied upon any waiver of territorial limits of the policy, at least after receipt of the Long Beach office letter of January 31, 1950.'

There was evidence, and the Court found, that by letter of January 31, 1950, Federal Services Finance Corporation, hereinafter called 'Federal,' notified Mansfield that 'such overseas policies are not good in the states,' and that the policy should be returned for cancellation. The defendants Harding and the defendant Fidelity and Casualty Insurance Company of New York, hereinafter called 'Fidelity,' excepted to findings and rulings with respect to the plaintiff's policy and to the granting of certain of its requests for findings and rulings.

These defendants now concede that the thirty day provision of article X of the insuring agreements did not apply, because Mansfield was at all material times domiciled in West Hampstead, New Hampshire. They agree that the Court correctly found that the geographical restrictions were waived by the payment of the claims for loss by theft at sea and for the damage caused to the automobile by collision with a hydrant at Derry, New Hampshire on January 12, 1950. They assert, however, that the Court erroneously restricted the waiver to the theft and collision coverages, and argue that the waiver must be taken to have extended to liability coverages as well. It is pointed out that the accident of January 12, 1950, 'involved a liability insurance claim as well as a collision claim.' The argument is made that the waiver operated to keep the policy in effect until it was cancelled in March 1950, and Fidelity argues further that the Court erred in ruling that there was no evidence 'that Mansfield relied upon any waiver * * * at least after receipt of the letter of January 31, 1950.'

The plaintiff company takes the position that, regardless of the meaning of 'domicile' as used in article X, Mansfield was entitled to the benefit of the thirty day grace period because he was overseas when the policy became effective; and that therefore there was no waiver of the geographical limitation on coverage, since the last loss paid under the policy occurred during the thirty day's grace.

Article X of the policy does not appear to us to be open to the construction urged by the plaintiff. The thirty day grace period, so-called, was provided for the purpose of permitting an insured residing outside the United States a limited period of coverage within the United States, sufficient to obtain domestic coverage if he desired to remain within the United States for more than thirty days. The grace period is made available to an insured whose 'domicile on the effective date of the policy period is outside the United States.' While Mansfield left this country prior to April 23, 1949, the evidence established that his domicile remained in the United States, and there was no evidence to indicate that he acquired even a residence outside the United States. We are therefore of the opinion that by its terms the policy furnished no coverage to Mansfield within the United States.

It follows that the Trial Court correctly concluded that there was a waiver of the geographical limitation upon coverage, when Mansfield's loss at sea and his collision loss in January 1950, were paid under the policy. These losses, apart from the geographical limitation, came within the coverages against theft and collision, which were the responsibility of the Firemen's Insurance Company. If there was a possibility of claim that the insured was liable for property damage by reason of the accident of January 12, 1950, there is no evidence that such a claim was made. The only settlements made under the policy came within coverages furnished by Firemen's Insurance Company. Whether the waiver which clearly occurred as to these coverages operated to require notice to the insured before the geographical limitation should again be restored is unimportant, because no further claim was made under these particular coverages before cancellation of the policy.

The vital question is whether the payments presumably made by Firemen's Insurance Company also operated as a waiver by the plaintiff, either because American International Underwriters Corporation participated and was also the plaintiff's agent, or because the plaintiff chose to join with Firemen's Insurance Company in issuing a single policy to the insured.

There is little or no evidence to show participation by the plaintiff in the settlement of the claims made under the policy. Mansfield testified at one point that his first claim, for the loss at sea, was made to American International Underwriters Corporation. Again he testified that he sent notice of this loss 'to the Commercial Casualty or the other company, the American Underwriters.' With respect to the collision of January 12, 1950, he testified, 'I sent the whole business as I remember to the Commercial Casualty or American Underwriters, I don't remember who.' He finally conceded that 'it was the Firemen's that [he] made this claim to for damage to [his] own car on January twelfth.'

If this testimony might be taken as some evidence of notice to the plaintiff of a loss or losses claimed to have been covered by the policy, the record contains no evidence that the plaintiff in any way participated in settlement of the claims or that it had any actual knowledge that the claims were settled. Any acts or knowledge on the part of American International Underwriters Corporation as agent for Firemen's Insurance Company, were limited to the business of the latter there being no evidence to the contrary. 1 Mechem Agency, § 184. The American Corporation was under no duty to notify the plaintiff of a claim insured against by Firemen's. Hence there is no reason to hold the plaintiff bound by the agent's knowledge of the disposition of such a claim. '[T]he application of this rule is limited by the reasons that sustain it.' Clark v. Marshall, 62 N.H. 498, 500. See also, Warren v. Hayes, 74 N.H. 355, 357, 68 A. 193; Dearborn v. Fuller, 79 N.H. 217, 107 A. 607. To hold the plaintiff liable upon any presumption of 'duty on the part of the agent to communicate * * * knowledge' Clark v. Marshall, supra, which did not concern the plaintiff 'would impose an unreasonable and unjust burden upon the employer.' Dearborn v. Fuller, supra [79 N.H. 217, 107 A. 608.]

As previously stated, the policy provided that the undertakings of the insuring companies were several but not joint, and the evidence furnishes no reason to disregard the terms of the policy. While no authorities involving combination policies have been brought to our attention, the case of Waen v. Ohio Farmers Inc. Co., 4 Cal.App.2d 513, 41 P.2d 168, 169, involved such policy. The Court there observed that ...