Department of Labor and Industries v. Northwestern Mut. Fire Ass'n

• Decision Date: 20 April 1942
• Docket Number: 28585.
• Citation: 124 P.2d 944,13 Wn.2d 288
• Court: Washington Supreme Court
• Parties: DEPARTMENT OF LABOR AND INDUSTRIES et al. v. NORTHWESTERN MUT. FIRE ASS'N et al.

124 P.2d 944

13 Wn.2d 288

DEPARTMENT OF LABOR AND INDUSTRIES et al. v. NORTHWESTERN MUT. FIRE ASS'N et al.

No. 28585.

Supreme Court of Washington

April 20, 1942

Department 1.

Consolidated actions by the Department of Labor and Industries of the State of Washington, by D. L. Slade and Olive J. Slade husband and wife, and by Ethel V. Russell and Robert H Russell, her husband, against Sam Rawson and Fred Rawson for damages for injuries to persons and property resulting from an accident in which defendant's truck was involved. The plaintiffs obtained a judgment. The judgment was not paid and the plaintiffs instituted garnishment proceedings against the Northwestern Mutual Fire Association and the Northwest Casualty Company which had issued a policy of casualty insurance on defendants' truck. From a judgment in favor of the plaintiffs, the garnishee defendants appeal.

Judgment reversed.

MILLARD J., dissenting.

Appeal from Superior Court, Clark County; Charles W. Hall, judge.

Shank, Belt, Rode & Cook, of Seattle, and E. M. Swan, of Vancouver, for appellants.

Smith Troy, Edward S. Franklin, and E. J. Cummins, all of Olympia, for respondent Department of Labor and Industry.

Bates & Burnett, of Vancouver, for respondents Russell.

McMullen & Snider, of Vancouver, for respondents Slade.

DRIVER Justice.

The several respondents on this appeal, as plaintiffs in the superior court, brought separate actions against defendants Sam Rawson and Fred Rawson for damages for injuries to persons and property resulting from an accident in which defendants' truck was involved. The actions were consolidated for trial, and plaintiffs prevailed. The judgment was not paid, and plaintiffs instituted garnishment proceedings against the two insurance companies which had issued a policy of casualty insurance on defendants' truck. At the trial of the garnishment action, after all the evidence had been introduced, counsel for both parties agreed that no issue of fact had been raised, and the court accordingly dismissed the jury. Judgment was entered for plaintiffs, and the insurance companies, garnishee defendants, appealed.

The material facts are as follows: The accident out of which respondents' cause of action arose occurred on September 27, 1939, in Clark county, Washington. Appellants previously had sold their combination insurance policy on the Rawson truck to one of its owners. The policy covered bodily injury and property damage liability for the period of one year commencing June 9, 1939. It contained this provision: 'This policy may be cancelled at any time by the Company by giving to the insured a five (5) days' written notice of cancellation with or without tender of the excess of paid premium above the pro rata premium for the expired term, which excess if not then refunded, shall be refunded as soon as practicable after cancellation becomes effective.' A special rider attached to the policy specified that

'The provisions of this endorsement shall apply only while any motor vehicle to which the policy is applicable is being operated or used by the insured under the jurisdiction of the Public Utilities Commissioner of Oregon. * * *

'3. Cancellation. The policy cannot be cancelled by the insurer or by the insured until fifteen (15) days after the date the Public Utilities Commissioner of Oregon has received notice of cancellation from the Insurer.'

Only a portion of the premium had been paid when the policy was issued, and, on August 1, 1939, appellants mailed the following notice to the assured:

'You are hereby notified that the Northwestern Mutual Fire Association and the Northwest Casualty Company have elected to cancel their combination Policy No. 732-3386 issued to you, with loss, if any, payable to _____ and that effective twelve o'clock Noon, on the 11th day of August, 1939, said policy and the whole thereof will stand cancelled without further notice, and thereafter be null and void, and no liability will exist thereunder, Unless in the Meantime Paymant of the Whole Premium Due under Said Policy Is Made to the Under signed, their representive, or their depositary bank.

'If payment is not made a bill for the premium earned to the time of cancellation will be forwarded in due course. If the premium has been paid in part by dividend and/or return premium credit or by cash remittance, the excess of such credit or payment above the pro rata premium calculated from due date to cancellation date will be refunded upon demand, if not tendered herein.'

The insured testified that he received the notice, and the sufficiency of the method of giving it is not questioned. He did not pay the balance of the premium, and, on August 17, 1939, the Public Utilities Commissioner of Oregon was notified that the policy had been cancelled. On August 11th, the effective cancellation date fixed by the notice, the insured was entitled to a premium refund of $5.75, an amount sufficient to keep the policy in force until after September 27th, the date of the accident. Appellants refunded this $5.75 to the insured, just when, the record does not show. The insured testified that it was probably about January, 1940.

The only question presented is whether or not the policy was in force at the time of the accident. Appellants assert that it was not, because it had been cancelled by notice in accordance with its terms.

The notice which appellants gave to the insured was not a mere conditional expression of an intention to cancel the policy at some future time. On the contrary, it was an unequivocal declaration that the policy would 'stand cancelled without further notice' on August 11th unless the whole premium was paid in the meantime. It was not necessary for the appellants to take any further affirmative action to effect cancellation. Ralston v. Royal Ins. Co., 79 Wash. 557, 140 P. 552; Knutzen v. Truck Ins. Exchange, 199 Wash. 1, 90 P.2d 282.

In the absence of some restrictive statutory provision, the appellants and the insured had the right to specify in...