Gendron v. Calvert Fire Ins. Co.

• Decision Date: 19 November 1943
• Docket Number: No. 4785.,4785.
• Citation: 47 N.M. 348,143 P.2d 462
• Parties: GENDRONv.CALVERT FIRE INS. CO.
• Court: New Mexico Supreme Court

47 N.M. 348

143 P.2d 462

GENDRON

v.CALVERT FIRE INS. CO.

No. 4785.

Supreme Court of New Mexico.

Nov. 19, 1943.

Appeal from District Court, Bernalillo County; Albert R. Kool, Judge.

Action by H. E. Gendron against Calvert Fire Insurance Company to recover under an automobile collision policy covering plaintiff's automobile. Judgment for defendant, and plaintiff appeals.

Affirmed.

Where cancellation clause of automobile collision policy declared that cancellation could be effected by the insurer by giving five days' written notice to insured, notice of cancellation which complied with such provision was not defective for failure to fix any time or date when cancellation became effective or for failure to mention a surrender of policy.

Joseph L. Smith and Mechem & Hannett, all of Albuquerque, for appellant.

Iden, Adams & Johnson, of Albuquerque, for appellee.

MABRY, Justice.

Plaintiff-appellant filed suit in the court below to recover on a contract of automobile collision insurance. Appellee company answered denying liability upon the ground that the policy relied upon had been cancelled. Judgment was rendered for appellee and this appeal follows. The following, in substance, constitutes the court's pertinent findings of fact and conclusions of law:

That on the 7th day of February, 1941, the plaintiff, H. E. Gendron, purchased from the defendant, Calvert Fire Insurance Company, a corporation, policy of insurance, which said policy provided for the insurance of plaintiff against damage and loss by collision upon his automobile, with a $25 deductible clause; that said agreement was entered into in the State of California and provided for coverage for a period of eighteen (18) months from date thereof; that on or about the 19th day of October, 1941, plaintiff, while driving his car suffered an accident which demolished the car and said car became a total loss; that on the 23d day of September, 1941, the defendant, Calvert Fire Insurance Company, a corporation, mailed to plaintiff a letter addressed to him at 38 Reconnaissance Squadron March Field, California, the address contained in said policy.

The letter contained a notice that defendant company elected to cancel the policy, the contents of the letter being correctly contained in the stipulation filed by counsel herein; that for some reason this notice of cancellation was never received by the plaintiff; that there was no tender of unearned premium except as provided in the letter above referred to; that prior to the accident of October 19, 1941, plaintiff had suffered two other accidents and the loss sustained had been settled by an adjustor acting as agent of the defendant; that in the loss which occurred in Albuquerque, New Mexico, the plaintiff filed a proof of loss on or about the 1st day of March, 1941, giving his permanent address as Kirtland Field, Albuquerque, New Mexico; that in the loss which occurred in Denver, he also notified the adjustor on or about the 1st day of August, 1941, that his permanent address was Kirtland Field, Albuquerque, New Mexico. That plaintiff at all times continued to receive mail forwarded from his California address, March Field, and there was no endorsement requested, or appearing on the policy, showing a change of address.

That the car was totally demolished and the reasonable value thereof at the time of the accident was $650.

An additional finding of fact, which may be called a mixed finding of fact and conclusion of law, reads: “That defendant, Calvert Fire Insurance Company, complied strictly with the terms of said policy in giving notice of cancellation.”

The Court thereupon concluded as a matter of law that the policy was duly canceled before the date of the accident. The cancellation clause of the policy reads:

“Cancellation. Cancellation of this policy shall be affected at the request of the insured immediately upon surrender thereof or upon written notice to the company stating when thereafter cancelation shall be effective. Cancelation may be effected by the company by giving five (5) days' written notice of cancelation to the Insured mailed to the Insured's address stated herein. Proof of such mailing shall be sufficient evidence of such notice.”

“Upon surrender of this policy, the company shall refund (a) the excess of paid premium above the customary short rate premium for the expired term when cancelation is at the insured's request, or (b) the excess of paid premium above the pro-rata premium for the expired term when cancelation is made at the instance of the company.”

There was an endorsement on the policy which reads as follows: “The assured under this policy is the above named insured and Commercial Credit Company and/or affiliated Companies and/or Subsidiaries. Loss, if any, to be adjusted with the insured though to be paid, subject to all the conditions of this policy, only to the Commercial Credit Company, for the account of all interests.”

The notice of cancellation stipulated to by the parties reads as follows:

“Dear Sir:

“We elect to cancel our Policy No. 090- 535-5813 Policy No. A-1001 issued to you on 2/7/41 and hereby give you notice thereof, as provided by the terms of said policy.

“The excess of paid premium above the pro-rata premium for the expired time (if not tendered) will be refunded on demand to the local office of the Commercial Credit Corporation, at San Bernardino, the additional assured, to which all payments are made for the account of all interests.

“Respectfully yours,

“Calvert Fire Insurance Company

“Riverside Eugene E. Heaton, Secretary”

The Commercial Credit Corporation applied the unearned premium to the insured Gendron's indebtedness to it. The said Commercial Credit Corporation's letter reads in part: “May I take this occasion to call your attention to the fact that Mr. Gendron is delinquent in his payments under his conditional sales contract, the total outstanding balance being $88.91 after allowance is made for return premium after cancelation of the policy. This amount is immediately due and payable,” etc.

The assignments of error may be properly grouped under two points.

I. That the Court erred in holding, as a matter of fact, that the appellee company complied strictly with the terms of said policy in giving notice of cancellation; and in concluding as a matter of law that the policy was in fact cancelled at the date of the accident.

The Court erred, says appellant in discussing this point, in holding for the appellee company and against appellant because: (a) Said notice did not fix any time or date when the cancellation was to be effective. (b) No mention is made in said notice relative to surrender of the policy. (c) Said notice was contrary to the provisions of the policy and insufficient in respect to the tender of the excess premium above the pro-rata premium for the unexpired term, in that it is stated that it would be refunded on demand to the local office of the Commercial Credit Corporation instead of to the insured plaintiff, and was thereafter paid to the Commercial Credit Corporation and not to the insured. The words “on demand” are not used in the cancellation clause of the policy. (d) The notice was never received by the plaintiff. (e) Although the defendant knew the plaintiff's correct address the notice was mailed elsewhere.

II. That notice of cancellation was contrary to the provisions of the policy and insufficient in respect to the tender, or refund, of the excess premium unearned at the time of cancellation.

[1] There is no merit to the contention that the notice given should have fixed any time or date when the cancellation became effective, absent a requirement of the policy to that effect. Cancellation becomes effective under the terms of the policy at the end of five (5) days after written notice is given by the company. See annotation in 35 A.L.R. page 899.

Appellant's point that no mention is made in the notice relative to the surrender of the policy is likewise without merit. The policy does not require that the notice of cancellation carry any mention of surrender of the policy. Such surrender has to do, rather, with the insured's right to a return of the unearned premium, hereinafter to be more fully noticed. See Summers v. Travelers Ins. Co., 8 Cir., 109 F.2d 845, 127 A.L.R. 1355.

[2] Under the terms of the policy it is not necessary that the insured actually receive notice. So, it must be said that mailing is all that is required. Whether such notice be actually received by the insured is unimportant. Raiken v. Commercial Casualty Co., N.J.Sup., 135 A. 479; and Naify v. Pacific Indemnity Co., 11 Cal.2d 5, 76 P.2d 663, 115 A.L.R. 476. Where the insurer has strictly complied with the terms of the policy with reference thereto, failure to receive notice will not render the attempted...