Hankins v. Public Service Mut. Ins. Co.

• Decision Date: 13 January 1949
• Docket Number: 59.
• Citation: 63 A.2d 606,192 Md. 68
• Parties: HANKINS et al. v. PUBLIC SERVICE MUT. INS. CO.
• Court: Maryland Court of Appeals

63 A.2d 606

192 Md. 68

HANKINS et al. v. PUBLIC SERVICE MUT. INS. CO.

No. 59.

Court of Appeals of Maryland

January 13, 1949

Appeal from Circuit Court, Anne Arundel County; James Clark, Judge.

Suit by Public Service Mutual Insurance Company against James Edward Hankins for judgment declaring plaintiff not to be liable under automobile liability policy, wherein Ralph A. Hamer intervened. From an adverse judgment, defendant and intervenor appeal.

Judgment reversed and case remanded for entry of judgment in accordance with opinion.

Harrison L. Winter, and Benjamin C. Howard, both of Baltimore (Miles Walsh, O'Brien & Morris, of Baltimore, and Richard E Lankford, of Annapolis, on the brief), for appellee.

Before MARBURY, C.J., and DELAPLAINE, COLLINS, and HENDERSON, JJ.

COLLINS Judge.

This is an appeal by James Edward Hankins and Ralph A. Hamer appellants, from a declaratory judgment declaring Public Service Mutual Insurance Company, appellee, not liable, under a certain policy of liability insurance issued by the appellee, by reason of an automobile accident on August 26, 1946.

On February 16, 1945, the appellee issued to the appellant, James E. Hankins, a policy of insurance from February 13, 1945, designated as a non-assessable participating national standard automobile liability policy. The effective term of this policy was one year which was extended for an additional year to February 13, 1947. The policy in effect was an agreement on the part of the appellee to pay on behalf of Hankins all sums for which he might become obligated to pay as damages for personal injury, death and property damage arising out of the ownership, maintenance or use of his automobile. The policy contained the provision that there would be no liability on the part of the appellee unless, as a condition precedent thereto, Hankins should have fully complied with all the terms of the policy. The policy also contained the provision 'when an accident occurs written notice shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as practicable'. On the reverse side of the policy was also the following: 'Important Every Accident, However Slight, Must Immediately Be Reported To The Home Office Of The Company'.

On August 26, 1946, the son of Hankins, while driving his father's automobile, was involved in an accident wherein the son of Ralph A. Hamer was injured. Hankins' son stopped, rendered aid and when the Hamer child had been sent to the hospital, went home and reported to Hankins what had happened. Hankins told his son to go and report the accident to the police and also to Mr. Harry O. Webster, the agent of the appellee at Linthicum Heights, from whom Hankins had bought the policy. The son reported the accident to the Ferndale Police Station, then went immediately to Mr. Webster's office, which is in his home, and then and there filled out a form reporting the accident. This form was attached to an identification card. This identification card set forth the offices in Maryland equipped to render claim service. The offices mentioned were in Salisbury, Hagerstown, Cumberland and Baltimore. The identification card was given to Hankins by the appellee when the policy was written. Hankins, Jr., left the report with Webster and Webster told him he would take care of it from thereon. The Chancellor found that the Hankins boy then 'went on his way, believing he had done everything he, or his father, were required to do'. The report, however, did not reach appellee's branch office in Baltimore until October 10, 1946.

On the following day, October 11, 1946, the appellee received from an attorney a carbon copy of a letter written to Hankins, the assured, on October 10, 1946, advising Hankins that he represented the parents of the Hamer child.

On October 17, 1946, the appellee wrote a letter to Hankins reserving its rights under the policy of insurance because of his alleged failure to notify the appellee promptly of the happening of the accident. On March 26, 1947, suits for damages were filed against the appellant, Hankins, and his son by the Hamer child and his father. When the writs were served the insured and his son immediately took the copies of the declarations to Webster and he transmitted them to the appellee. On April 24, 1947, the appellee wrote Hankins and his son asking them to come to its office in Baltimore on April 28, 1947, with which request the Hankins complied. At appellee's office the Hankins executed a non-waiver agreement which provided that the appellee might defend the suits without waiving any 'provision, term, condition or limitation in the policy contained', but without requiring the appellee to defend. Appearances were then entered in the damage suits by appellee's attorneys who filed the pleas. On December 3, 1947, this suit for a declaratory judgment was filed by the appellee. On December 31, 1947, Hamer filed a petition to intervene in the suit for a declaratory judgment and this leave was granted. Answers were promptly filed by Hankins and Hamer and a hearing held in open court. From the judgment holding the appellee not liable on the liability insurance policy in question, the appellants appeal here.

During the trial of this case the manager of the Baltimore branch office of the appellee testified that the appellee operates through agents who are licensed to do business in the State of Maryland by the Maryland Insurance Department. If a person agrees to represent that company it completes the standard form of license application furnished by the Insurance Department, and with a $2 fee paid by the appellee for the license, the Department at the request of the appellee issues a license to the agent authorizing him to represent appellee as its agent to do business on 'classes of business that we write and that we are authorized to write in the State of Maryland'.

The appellee offered in evidence its agency agreement with Webster. This agreement characterized Webster as 'The Agent'. It provided in part: '1. Territory. The Company does hereby make, constitute and appoint the agent to represent it in the prosecution and conduct of its insurance business in the following territory, Linthicum Heights and Near-by Vicinity.' This agreement also provided in part: '2. Duties. The agent is appointed for the purpose of procuring and transmitting applications for insurance of the type set forth in Paragraph 3 herein.' (Paragraph 3, in turn, sets out the various types of insurance which are issued by the company). 'Collecting premiums on such applications and policies and paying to the company the premiums on the insurance so effected and performing such other duties as may be required by this agreement or by the company from time to time. The agent agrees to use his best ability and judgment in submitting risks to the company.' This contract also contained the following provision: '13. Limit of Authority.

The agent is in no case authorized to obligate the company beyond the limitations laid down in the written or printed instructions issued by the company nor to alter, modify, waive, or change any of the terms, rates or conditions of the company's policies or contracts.' Hankins, the insured, had a fifth grade education. Harry O. Webster did not testify in this case.

The primary question for our decision in this case is whether the notice given by the insured to Harry O. Webster was notice to the insurer, the appellee here. As the insurance policy provides that 'written notice shall be given * * * to the company or any of its authorized agents * * *' and as the provision on the reverse side of the policy, providing that every accident must be reported to the home office of the company does not limit the notice to the home office of the company only, the question is narrowed as to whether Harry O. Webster was an 'authorized agent' of the appellee at the time he received the notice of this accident.

In reviewing the authorities outside of this State on the question as to whom notice of an accident should be given under liability insurance policies the question is annotated at some length in 76 A.L.R. pages 28 to 37, and in 123 A.L.R. 952 and 953. It is there pointed out that the clauses in liability insurance policies are 'considerably lacking in uniformity' as to whom notice of accidents shall be given. Some policies use the words 'the company', others 'the association', others 'the insurer', others 'at its home office'. It is stated that the most common form provides that notice shall be given to 'the company' or 'its duly authorized agent'. The policy here in question, of course, provides notice shall be given 'to the company or any of its authorized agents'. We have been unable to locate nor have we been referred to any case with the exact language as the one before us here with comparable facts and with a comparable contract between the insurance company and the agent who sold the policy. In Pateras v. Standard Accident Ins. Co., 1929, 37 Ohio App. 383, 174 N.E. 620, 621, (automobile liability) , the notice was required to be given to the company at its home office or its 'duly authorized agent'. It was there held that such an agent must be authorized, either expressly, or impliedly, to receive such notice on behalf of the insurer.

In the case of New Amsterdam Casualty Co. v. Plaza Square Realty Co., 1935, 101 Ind.App. 174, 195 N.E. 289, the owner landlord and tenant public liability policy provided that the assured should give immediate written notice of an accident and notice of any claim or suit resulting therefrom to the executive office of the company in Baltimore, Maryland, or to its authorized representative. The accident occurred on the 17th day of ...