General Finance Co. v. Pennsylvania Threshermen & Farmers' Mutual Casualty Ins. Co.
| Decision Date | 03 January 1944 |
| Docket Number | 242 |
| Parties | General Finance Company v. Pennsylvania Threshermen & Farmers' Mutual Casualty Insurance Company, Appellant |
| Court | Pennsylvania Supreme Court |
Argued November 26, 1943.
Appeal, No. 242, Jan. T., 1943, from judgment of C.P. No. 1 Phila. Co., June T., 1941, No. 1766, in case of General Finance Company v. Pennsylvania Threshermen & Farmers' Mutual Casualty Insurance Company. Judgment affirmed.
Same case below: 48 D. & C. 476.
Assumpsit. Before LEWIS, J.
Verdict directed for plaintiff and judgment entered thereon. Defendant appealed.
Judgment affirmed.
Samuel S. Herman, with him George L. Cogan, for appellant.
David S. Malis and Arthur S. Arnold, for appellee.
Before MAXEY, C.J., DREW, LINN, STERN, PATTERSON and STEARNE, JJ.
This is an action in assumpsit by the General Finance Company, appellee, on an insurance policy issued to it by the Pennsylvania Threshermen and Farmers' Mutual Casualty Insurance Company, appellant, to recover the amount paid by appellee to discharge verdicts rendered against it in several trespass suits. The policy provides for indemnity against liability arising by reason of the operation of automobiles owned by appellee and/or use of an automobile for a purpose incidental to its business. The trial court directed a jury to return a verdict in favor of appellee. This appeal is from the action of the court below dismissing appellant's motions for judgment non obstante veredicto and for a new trial.
The General Finance Company is engaged in the business of financing automobiles. In connection therewith it operates a sales service station where it repairs and sells automobiles which it may have acquired by repossession after default by conditional purchasers. One James R. MacWilliams, of Washington, D.C., frequently made repossessions for appellee and, either he or his associate, Houston, would then deliver the repossessed cars to its place of business in Philadelphia. On December 7, 1937, while enroute to Philadelphia, his associate was involved in a three-car collision, damaging the automobiles of one Scrivan and one Warfield and injuring a passenger in the Warfield car. On December 10, 1937, appellee was advised of the accident. Irving Silver, collection manager of appellee, immediately contacted its broker, Stein, requesting that appellant be duly notified. Stein thereupon contacted H. C. Fenno, the broker through whom the insurance had been effected. Alexander Maxwell, general manager of appellant, was immediately notified of the accident by telephone. Fenno was referred to Eli Betzer, branch manager of appellant's Philadelphia office, who, being of opinion that no liability was imposed, and desirous of avoiding the creation of a reserve fund before the beginning of the following year, advised that appellee should not submit any formal written notice of the accident at that time.
On February 10, 1938, summons of suit begun by Scrivan in a Baltimore city court was served on appellee by registered mail. This summons, together with a statement of claim, was immediately forwarded to appellant, which received it February 11. This was the first written notice to appellant of the accident. Appellant made an investigation, and its counsel appeared on behalf of appellee and successfully contested the action. Subsequently separate suits were instituted in the Federal District Court in Philadelphia by Warfield, and Waggaman, a passenger in the Warfield car. On December 9, 1938, counsel for appellant sent a formal letter of disclaimer to appellee and refused to defend the actions. On December 19, a non-waiver agreement was entered into wherein appellant consented to appear and defend the suits on behalf of appellee, reserving the right to deny liability under the policy for any loss sustained by appellee as a result of these actions. Verdicts against the appellee were subsequently paid by it. Appellant, exercising the right reserved to deny liability under the indemnity contract, refused to indemnify appellee for the amount of the verdicts so paid. This action was then instituted.
Denial of liability is based upon appellant's contentions that (1) appellee failed to give prompt written notice, thereby breaching a condition of the insurance contract and voiding it; (2) that the policy by its terms does not cover the accident from which appellee's loss arose for MacWilliams was not "engaged in the business described", hence no premium was paid which was intended to cover his activities; and, (3) that the insurance was limited to include liability arising in and about the locations described in the policy.
The purpose of the requirement for notice is to permit the insurer to make an investigation and defend any claim arising out of the accident. The successful defense to the Scrivan suit indicates that opportunity for sufficient investigation did exist. Considering the circumstances appellant cannot now insist upon the failure to give prompt written notice. Appellant's action, through its general manager Maxwell and branch manager Betzer, was of a nature clearly calculated to and did prevent prompt submission by appellee of written notice of the accident. In Curran v. The National L. Ins Co., U.S. of A., 251 Pa. 420, we said (p. 432): "where the delay in . . . the giving of notice is due to circumstances not attributable to neglect or bad faith on the part of [appellee] and the required . . . notice [was] in fact furnished within a reasonable time under the circumstances, failure to...
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