Hutto v. American Fire & Cas. Ins. Co.
| Decision Date | 06 July 1949 |
| Docket Number | 16235. |
| Parties | HUTTO v. AMERICAN FIRE & CASUALTY INS. CO. et al. |
| Court | South Carolina Supreme Court |
N. A. Turner, C. T. Graydon, Columbia, for appellants.
Tompkins Tompkins & McMaster, Columbia, for respondent.
About 8:00 P. M. on February 20, 1947, a taxicab in which Ray R Hutto was riding as a paying passenger collided with a truck at the intersection of Whaley and Assembly Streets in the City of Columbia. In August, 1947, this action was brought against I. D. Redmon, doing business as the Blue Bell Cab Company, and S. B. Forsythe, doing business as Columbia Dairies, owners, respectively, of the taxicab and truck mentioned, to recover damages for personal injuries sustained by Hutto as a result of said collision. The American Fire and Casualty Insurance Company was joined as a party defendant under an allegation that it issued, pursuant to an ordinance of the City of Columbia, a public liability policy upon the taxicabs operated by Redmon. It was alleged in the complaint that plaintiff's injuries were caused by the joint negligence of the drivers of the two vehicles. Both individual defendants denied liability. The American Company alleged that the policy issued by it had been previously cancelled and that at the time of the collision the coverage on Redmon's taxicabs was carried by the Keystone Mutual Casualty Company.
At the conclusion of plaintiff's testimony, each defendant made a motion for a nonsuit. All motions were refused. At the conclusion of all the testimony, the Court granted a motion by Forsythe for a directed verdict upon the ground that the undisputed evidence showed that at the time of the collision the driver of the truck was not acting within the scope of his employment but was on a purely personal mission. A motion for a directed verdict made by Redmon upon the ground that the accident was due to the sole negligence of the driver of the truck and that there was no evidence showing any actionable negligence on the part of the driver of the taxicab, was refused. The American Company made a motion for a directed verdict upon the ground that its policy had been cancelled prior to the mishap, and upon the further ground that in no event was there any coverage on the particular cab involved in the collision. This motion was also refused. The jury was instructed that if Redmon, as owner of the taxicab company, was liable, the American Company would also be liable for the amount of any actual damages within the policy limit, which was $5000.00. The jury returned a verdict against Redmon and the American Company for $4500.00. A motion for a new trial was overruled and both of these defendants have appealed.
We shall first consider the appeal by the American Company.
During December, 1945, an ordinance was passed by the City of Columbia which provided that after December 31, 1945, no permit for the operation of taxicabs should be granted unless the owner first procured and filed with the City Clerk either an indemnity bond or 'an insurance policy covering the operation of each vehicle in some indemnity or casualty company authorized to write such insurance and doing business in the State of South Carolina', conditioned upon the payment, within certain stated limits, of any judgment recovered against the owner growing out of the operation of such taxicabs. It was further stated:
It appears that after the passage of this ordinance all matters relating to liability insurance on taxicabs were handled by the Traffic Division of the Police Department and the policies were filed with that Department rather than with the City Clerk as stated in the ordinance.
Redmon had been engaged in the taxi business for several years and at the time of the accident was operating about fifteen taxicabs. His insurance was handled by the Harper Insurance Agency of Columbia, who represented both the American Fire and Casualty Insurance Company and the Keystone Mutual Casualty Company. The members of this firm were thoroughly familiar with the requirements of the ordinance heretofore mentioned. Pursuant to its terms, this agency filed (the record does not disclose when) with the Police Department a master liability policy issued by the American Company. The policy was originally written for a term of one year beginning February 25, 1943. It was later extended for an additional year. Thereafter by an endorsement dated February 25, 1945, it was stipulated: 'It is hereby agreed that the term of this policy is to read--February 25 1945,--until discontinued.'
According to the testimony of a partner in the Harper Insurance Agency, the American policy expired on February 25, 1946, and was then replaced by the Keystone policy which was in effect at the time of the collision. Redmon testified that the Harper Insurance Agency attended to all of his insurance requirements and that he knew nothing of the change of his insurer until he received the Keystone policy during the spring of 1946.
It is the contention of the American Company that its policy expired on February 25, 1946, or approximately a year prior to the date of the accident. It is undisputed that the Keystone policy was never filed with the Police Department and that after the accident the American policy was found in its files with no indication that it had been cancelled or terminated. There is no evidence expressly showing cancellation by the American Company prior to the accident. It contends, however, that the circumstances hereinafter mentioned were sufficient to show cancellation or at least to warrant the submission of that question to the jury.
Apparently every taxicab company in the City of Columbia was required annually to secure a license to do business and in the application therefor to give certain information, including the name of the insurer covering public liability. In Redmon's application made on February 4, 1946, he listed the American Company as his insurer, and in the application of February 8, 1947, he listed the Keystone Company as insurer. There was also offered in evidence a letter from the Harper Insurance Agency to the Columbia Police Department, dated February 25, 1946, which was as follows: A member of the firm of the Harper Insurance Agency testified that this letter was mailed in due course. One of the police officers testified that it was not delivered to the Police Department until August, 1947, the month in which this action was instituted. For the purpose of this discussion, the conflict in the evidence will be resolved in favor of the American Company and we shall assume that the letter was mailed on February 25, 1946.
On September 17, 1947, about a month following the institution of this action, the Vice-President and Treasurer of American wrote the Columbia Police Department as follows:
'In regard to master policy R64 in the name of I. D. Redmon, d/b/a a Blue Bell Cab Company, coverage under this policy was intended to apply only to automobiles described in certificates and according to our records this company has had no coverage on any automobile for this assured under this master policy since February 25, 1946, at which time the insurance was placed with another company and our policy was not supposed to be in force after that date as we have collected no premium on any automobile insured under this policy since February 25, 1946.
'We will appreciate your marking your records accordingly.'
The Secretary of the American Company testified that according to the home office records the policy issued to Redmon expired on February 25, 1946; that no premiums were received for coverage after that date; that the Harper Insurance Agency represented his company in the City of Columbia; that he had no knowledge of the requirements of the city ordinance in question; and that the only communication ever made by the home office with reference to cancellation of this policy was contained in the letter of the Vice-President and Treasurer hereinabove set out.
It appears that the Keystone Company became insolvent and went into bankruptcy in June, 1947.
In determining whether the American policy had been effectively cancelled prior to the accident as against respondent, we must keep in mind the purpose of the ordinance and the character of coverage involved. It was intended to make certain that taxicabs operating on the streets of...
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