Laxton v. National Grange Mut. Ins. Co.

• Decision Date: 14 June 1966
• Docket Number: No. 12509,12509
• Citation: 148 S.E.2d 725,150 W.Va. 598
• Parties: Frank LAXTON, Jr. v. NATIONAL GRANGE MUTUAL INSURANCE COMPANY.
• Court: West Virginia Supreme Court

Page 725

148 S.E.2d 725

150 W.Va. 598

Frank LAXTON, Jr. v. NATIONAL GRANGE MUTUAL INSURANCE COMPANY.

No. 12509.

Supreme Court of Appeals of West Virginia.

Submitted April 26, 1966.

Decided June 14, 1966.

Syllabus by the Court

1. The procedural provisions of Code, 1931, 56--4--21, have been superseded by the West Virginia Rules of Civil Procedure.

2. Where an insurance policy provides that the policy may be cancelled by the insurance company by mailing to the insured at his address shown in the policy a written notice stating when not less than ten days thereafter such cancellation shall be effective, and that mailing of such notice shall be sufficient proof of notice, actual receipt of such notice by the insured is not a condition precedent to cancellation and, in an action on the policy, cancellation may be established by proof of the mailing of such notice in accordance with the terms of the policy.

3. A jury verdict, approved by the trial court, which is against the clear weight and preponderance of the evidence will be set aside on appeal.

Mann, Lynch & Mann, Jack A. Mann, Beckley, for appellant.

West, Blackshear & Goode, Marshall G. West, Pineville, for appellee.

CALHOUN, Judge.

This case, on appeal from a final judgment of the Circuit Court of Wyoming County, involves a civil action in which Frank Laxton, Jr., the insured, sued National Grange Mutual Insurance Company, the insurer, upon an insurance policy which covered the plaintiff's 1963 Chevrolet automobile and which insured it against damage or loss, subject to conditions stated in the policy.

The policy was issued on August 6, 1964, by Gilbert Goode of Goode Insurance Agency of Pineville, in Wyoming County. The automobile was severely damaged as a result of an accident which occurred on November 18, 1964, while it was being operated by Carolyn Kay Laxton, daughter of the insured. In a jury trial of the action, the insurer defended on the basis of an alleged cancellation of the policy before the date of the accident.

The defendant, the insurer, has appealed to this Court from a final judgment order entered on May 17, 1965, by which the trial court refused to set aside a jury verdict in favor of the plaintiff for $2,000 and the judgment previously entered on the verdict.

The primary question presented for decision on this appeal is whether, prior to the date the insured automobile was damaged, the insurer had cancelled the policy pursuant to the following policy provision:

'This policy may be canceled by the insured named in Item 2 of the declarations by surrender thereof to the company or any of its authorized agents or by mailing to the company written notice stating when thereafter the cancelation shall be effective. This policy may be canceled by the company by mailing to the insured named in Item 2 of the declarations at the address shown in this policy written notice stating when not less than ten days thereafter such cancelation shall be effective. The mailing of notice as aforesaid shall be sufficient proof of notice. The effective date of cancelation stated in the notice shall become the end of the policy period. Delivery of such written notice either by such insured or by the company shall be equivalent to mailing.

'If such insured cancels, earned premium shall be computed in accordance with the customary short rate table and procedure. If the company cancels, earned premium shall be computed pro rata. Premium adjustment may be made either at the time cancelation is effected or as soon as practicable after cancelation becomes effective, but payment or tender of unearned premium is not a condition of cancelation.'

By way of cross-assignment of error pursuant to Rule XI of the Rules of this Court, the plaintiff asserts that the defendant waived its defense of alleged cancellation by failing to plead such defense by a proper pleading under oath, in conformity with the requirements of Code, 1931, 56--4--21. That statute, generally speaking, requires that in any action on an insurance policy, whether the action be covenant, debt or assumpsit, certain defenses must be asserted affirmatively by a statement in writing under oath. In this connection, the plaintiff relies upon Christian v. State Farm Mutual Automobile Insurance Company, 144 W.Va. 746, 110 S.E.2d 845, and prior cases which state that these statutory requirements are mandatory. We believe that the procedural provisions of this statute have been superseded by the West Virginia Rules of Civil Procedure which became effective July 1, 1960. The Christian case and other cases cited in behalf of the plaintiff were decided before that date. R.C.P. 1 is, in part, as follows: 'These rules govern the procedure in all trial courts of record in all actions, suits, or other judicial proceedings of a civil nature whether cognizable as cases at law or in equity, * * *.' R.C.P. 8(c) deals with affirmative defenses, but does not provide that such defenses must be raised by a pleading under oath. R.C.P. 11 provides, that except where otherwise provided by the Rules, pleadings need not be verified or accompanied by affidavit. The Rules embrace actions such as that involved in this case. The answer to the complaint affirmatively pleaded the alleged cancellation. The answer was not required by the Rules to be under oath. The cross-assignment of error, therefore, is not well taken.

The policy contained a loss payable clause for the benefit of General Motors Acceptance Corporation. It is the contention of the defendant insurance company that, on September 9, 1964, a notice of cancellation was mailed from its offices in Keene, New Hampshire, to the plaintiff at Hatcher, West Virginia, which was the plaintiff's address shown on the insurance policy; and that on the same day a copy of the cancellation notice was mailed to General Motors Acceptance Corporation at 1031 Quarrier Street, Charleston, West Virginia. A carbon copy of the alleged notice of cancellation appears in the record as a part of the evidence introduced in behalf of the defendant at the trial of the case. It is dated September 9, 1964, and states that the cancellation was to be effective on September 24, 1964, which latter date was almost a month before the date the automobile was involved in the accident.

It will be noted that the cancellation provision of the policy, previously quoted in this opinion, states that the insured may cancel the policy 'by mailing to the company written notice stating when thereafter the cancelation shall be effective.' Similarly it states that the company may cancel the policy 'by mailing to the insured * * * written notice stating when not less than ten days thereafter such cancelation shall be effective.' The policy further provides: 'The mailing of notice as aforesaid shall be sufficient proof of notice.' In other words, the policy provides that it may be cancelled, whether by the insured or by the company, by mailing a written notice of cancellation, and that proof of mailing shall constitute sufficient proof of notice. This language of the policy becomes material in this case because the plaintiff denies having received from the company any notice of cancellation.

In connection with an exhaustive annotation of the subject of cancellation of insurance policies by mail, the following summary is stated in 64 A.L.R.2d, Section 10, page 995: 'Where the clause applicable to the insurer's right to cancel the policy provides for the exercise of such right by mailing of notice to the insured's address, or contains substantially similar language, the unanimous rule is that the actual receipt by the insured of such notice is not a condition precedent to a cancellation of the policy by the insurer, and the mere mailing of the letter containing a notice of cancellation is sufficient to effect a cancellation.' In the same volume at page 1000, Section 15(a), it appears that the rule stated above is applied with peculiar force where, as in the instant case, the notice of cancellation states a specific date in advance when cancellation will be effective, and where, as in the instant case, the policy specifically provides that the mailing of notice of cancellation will be regarded as sufficient proof of notice.

The cancellation provision of the policy here in question is referred to as the standard cancellation provision. In relation to such a provision, the following is stated in 29 Am.Jur., Insurance, Section 386, page 738: 'Such a provision is valid and is not contrary to public policy. A majority of the cases hold that under such provision the actual receipt of the cancellation notice by the insured is not a condition precedent to the cancellation of the insurance by the insurer in view of the fact that the express terms of the contract sanction the sufficiency of a notice deposited in the mail. In other words, these courts proceed upon the basis that the parties by their contract in effect constituted the government, in its business of operating the mails, the agent of the insured for the purpose of receiving the notice of cancellation. By mailing the cancellation notice, the insurer has fully complied with the standard policy provision as to notice of cancellation, and the insurer is under no obligation to use reasonable diligence to get actual notice of cancellation to the insured.'

The A.L.R. annotation lists many cases from throughout the country in support of the general rules stated in the quotations previously appearing in this opinion. Some of the more recent decisions to the same effect are Mackiw, Admx. v. Pennsylvania Threshermen & Farmers' Mutual Casualty Insurance Co., 201 Pa.Super. 626, 193 A.2d 745; Gilmore v. Grand Prix of Tulsa Corporation et al., (Okl.) 383 P.2d 231; Aetna Casualty and Surety Co. v. Simpson, (Fla.App.) 128 So.2d 420; Jensen v. Traders & General Insurance Co., 52 Cal.2d 786, 345 P.2d 1; Riddick v. State...