Harris v. American Motorist Ins. Co.

• Court: Mississippi Supreme Court
• Writing for the Court: RODGERS
• Citation: Harris v. American Motorist Ins. Co., 240 Miss. 262, 126 So.2d 870 (Miss. 1961)
• Decision Date: 13 February 1961
• Docket Number: No. 41691,41691
• Parties: Charlene HARRIS and Georae Q. Daniels v. AMERICAN MOTORIST INSURANCE COMPANY and George Guido and Edward Foley.

Page 870

126 So.2d 870

240 Miss. 262

Charlene HARRIS and Georae Q. Daniels v. AMERICAN MOTORIST INSURANCE COMPANY and George Guido and Edward Foley.

No. 41691.

Supreme Court of Mississippi.

Feb. 13, 1961.

Johnson & Johnson, Clyde Mullins, Berger, Callon & Zuccaro, Natchez, for appellants.

Laub, Adams, Forman & Truly, Natchez, for appellees.

RODGERS, Justice.

This case came up from the Chancery Court of Adams County, Mississippi. George Q. Daniels and Charlene Harris filed their suit against the American Motorist Insurance Company, George Guido and Edward Foley, its local agents. From an adverse judgment, complainants appealed.

The defendant American Motorist Insurance Company sold an automobile public liability policy to the appellant George Q. Daniel through its agents George Guido and Edward Foley covering a period from January 20, 1955, to January 20, 1956. This policy was in full force and effect on the 18th day of April 1955. The policy contained the following provisions: The insurance company agreed to 'pay on behalf of the insured all of the sums which the Insured shall become legally obligated to pay as damages because of bodily injuries, sickness or disease, including death anytime resulting therefrom, sustained by any person caused, arising out of the ownership, maintenance, or use of said automobile.' The insurer further agreed to 'defend any suit against the Insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent: but the company may make such investigation, negotiation, and settlement of any claim or suit as it deems expedient.'

The policy also required that the insured give notice as follows:

'2. Notice of Accident.

Coverages A, B and D

'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. Such notice shall contain particulars sufficient to identify the insured and also reasonably obtainable information respecting the time, place and circumstances of the accident, the names and addresses of the injured and of available witnesses.'

'7. Action Against Company.

'Coverages A and B

'No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy, nor until the amount of the insured's obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company.

'Any person or organization or the legal representative thereof who has secured such judgment or written agreement shall thereafter be entitled to recover under this policy to the extent of the insurance afforded by this policy. Nothing contained in this policy shall give any person or organization any right to join the company as a co-defendant in any action against the insured to determine the insured's liability.'

On April 18, 1955, the appellant George Q. Daniels drove his automobile along Pine Street in the City of Natchez, Mississippi, about dark, and ran into and against the appellee Charlene Harris, a Negro girl, near Hello Grocery. He continued down the street and parked near the curb and went to sleep. Some time later the police found the defendant and informed him that he had 'hit some colored girl.' He was then arrested, taken to the alleged scene of the accident, and later incarcerated in jail. The next morning he made bond and was released without a trial. He denied that he ran against Charlene Harris, nevertheless he was charged with 'drunken driving' and 'leaving the scene of an accident.' He heard nothing more from this accident until May 24, 1956, at which time he was served with a summons and learned that Charlene Harris had entered suit against him for the alleged accident. When the suit was filed George Q. Daniels carried the summons to the insurance agents and advised them about it, but the first notice given to the insurance company by insured was after May 24, 1956. Some time later, the appellant George Q. Daniels delivered the insurance policy above-mentioned to the agents of insurer, George Guido and Edward Foley, and the policy was cancelled. He claims that at the time he delivered the policy to the insurance agents, at their request, that the agents advised him that they would 'take care of the Harris claim.' The appellant had talked to the insurance agents before his policy was cancelled and the agents not only knew about the Harris claim but had turned it over to an adjuster for the insurance company. The appellee insurance company employed one Louis Bills, an adjuster, to investigate the claim. It is said that the adjuster requested that the case be postponed so as to give him time to investigate it, and as a result thereof the case was postponed until January 1957. The adjuster actually investigated the case, talked to all of the witnesses, and reviewed the medical reports. After the investigation was concluded, the insurer, American Motorist Insurance Company, wrote a letter dated July 2, 1956, addressed to Q. G. Daniels denying coverage in the case of Harris v. Daniels, stating 'the reason for this disclaimer is that although the accident and its immediate consequence were well known to you, you have made no report to us under the terms of the policy within a reasonable time.'

George Q. Daniels then employed an attorney to represent him in the Harris case and agreed to pay him $500. Charlene Harris obtained a judgment against the defendant George Q. Daniels in the sum of $3,000 damages because of said accident. Execution was then issued, and served upon Daniels, and it developed that he was insolvent. Daniels then assigned his interest in the policy to Charlene Harris (except the right to recover attorney's fee expended by him). Whereupon, Charlene Harris and George Q. Daniels filed their joint action against the defendant insurance company to recover the $3,000 due Charlene Harris for her injuries, and the $500 attorney's fee paid by George Q. Daniels in the defense of said suit.

The issues involved in this case are: (1) whether or not the failure to give notice required in the policy was excused because the appellant Daniels did not know or believe that he had injured Charlene Harris; (2) whether or not the activity of the insurance company in making an investigation of this case was a waiver of the required notice; and (3) the insurance company was thereby estopped because of such activity to forfeit the policy.

A contract of insurance, like any other contract, must be interpreted as it is written, taking into consideration the intention of the parties and construed so as to give a reasonable construction to conserve the real and true purpose of the various clauses of the contract. State Mutual, etc. Insurance Company v. Watkins, 181 Miss. 859, 180 So. 78; 29A Am.Jur., Insurance, Sec. 1385, p. 500; Annotation 18 A.L.R.2d, Sec. 5, p. 452; 45 C.J.S. Insurance Sec. 1053, p. 1276.

Where a contract of insurance requires as a condition precedent to insurer's liability, that notice be given to the insurer within 'a reasonable time' or 'as soon as practicable' after an accident, or when a claim has been made or suit filed such notice must have been given by the insured, or someone in his behalf, within the time agreed upon, unless there is a reasonable excuse offered by or for the insured, for his failure so to do. 45 C.J.S. Insurance Sec. 1047, p. 1272; Sec. 1055, p. 1278; Sec. 1056, p. 1280. Travelers' Indemnity Company v. Holiman, 174 Miss. 220, 164 So. 36; Young v. Travelers' Insurance Company, 5 Cir., 119 F.2d 877; Southern States Fire Insurance Company v. Hand-Jordan Company, 112 Miss. 565, 73 So. 578.

The lack of insured's knowledge of the accident, or claim, may and often does excuse an insured from giving notice to the insurer until the time when the accident is brought to his knowledge. 45 C.J.S. Insurance Sec. 1056b, p. 1282; Young v. Travelers' Insurance Company, supra; Employers' Liability Assurance Corporation, Ltd. v. Jones County Lumber Company, 111 Miss. 759, 72 So. 152; Southern States Fire Insurance Company v. Hand-Jordan Company, supra; Bullock v. Fidelity & Casualty Company of New York, La.App., 187 So. 93; Appleman's Insurance Law and Practice, Vol. 8, Sec. 4732, p. 94.

In the case of Fireman's Fund Indemnity Company v. Kennedy, 9 Cir., 97 F.2d 882, 123 A.L.R. 966, where it was argued that the driver of a suddenly stopped police patrol car, with the rear of which another car collided, did not know that an occupant thereof was seriously injured, and accordingly it was impossible for the driver to notify the insurer, the Court characterized this argument as 'specious reasoning.'

The fact that insured does not have to give notice until he has knowledge of the accident will not excuse him for failing to give notice when in fact he knew about the accident and through his negligence failed to comply with the reasonable notice clause required by the policy as a condition precedent to recovery. It has been said: 'As a general proposition a mere mistake as a result of carelessness and inattention will not extend the time for giving notice or furnishing proofs of loss * * *.' 29A Am.Jur., Insurance, Sec. 1387, p. 503. See also Aetna Life Insurance Company v. Walley, 174 Miss. 365, 164 So. 16; Annotation 7 A.L.R. 192; 76 A.L.R. 76; 18 A.L.R.2d Sec. 21, p. 473.

When an insured has knowledge of an accident involving the coverage under his insurance contract, it is his duty to exercise reasonable care, due diligence as a reasonable and prudent man, to acquire information about the accident, so that he may be readily informed about claims out of which damage may arise. 29A Am.Jur., Insurance, Sec. 1389, Sec. 504; Malloy v. Head, 90 N.H. 58, 4 A.2d 875, 123 A.L.R. 941; Appleman's Insurance...