Midwestern Ins. Co. v. Cathey

• Decision Date: 26 May 1953
• Docket Number: No. 35338,35338
• Citation: Midwestern Ins. Co. v. Cathey, 262 P.2d 434, 1953 OK 169 (Okla. 1953)
• Parties: MIDWESTERN INS. CO. v. CATHEY.
• Court: Oklahoma Supreme Court

Page 434

262 P.2d 434

1953 OK 169

MIDWESTERN INS. CO. v. CATHEY.

No. 35338.

Supreme Court of Oklahoma.

May 26, 1953.

Rehearing Denied Oct. 27, 1953.

Syllabus by the Court.

Where cancellation clause of automobile collision policy, issued June 16, 1950, for an annual premium of $39, provided that cancellation could be effected by insurer by giving five days' notice to insured, mailed to insured's address stated in the policy, and that proof of such mailing was sufficient evidence of such notice, and where only $10 of the premium was paid, and where statements for the premium then unpaid were mailed to insured, postage prepaid, on June 30, July 31, August 31, September 15 and 30, and October 16 and 31 of 1950, and none of the statements were returned by the postal authorities as undelivered, and where on November 28, 1950, insurer mailed a notice to insured to the address shown in the policy advising him that the policy was cancelled as of 12:01 A.M., December 4, 1950, for non-payment of premium, and where the envelope containing this notice of cancellation was postmarked November 28, 1950 at 6:30 P.M., and was returned to the sender on December 1, 1950, at 4:30 P.M., undelivered for the reasons as stated on the envelope 'not here' and 'unknown at address,' the actual mailing of the notice of cancellation under such facts effected cancellation of the policy on December 4, 1950, at 12:01 A.M.

Savage, Gibson & Benefield, Oklahoma City, for plaintiff in error.

Hughey Baker, Tulsa, Schwoerke & Schwoerke; James E. Grigsby, Oklahoma City, for defendant in error.

Looney, Watts, Ross, Looney & Smith and Embry, Johnson, Crowe, Tolbert & Boxley, Ben L. Burdick, Oklahoma City, amici curia.

DAVISON, Justice.

Betty Cathey sued Harvey Johnson for the wrongful death of her husband resulting from an automobile collision. Harvey Johnson requested the Midwestern Insurance Company to defend the case because of an automobile policy Midwestern had issued insuring Johnson against such damages. Midwestern refused to defend the suit on the theory that the policy had been duly and timely cancelled for nonpayment of premiums.

After Cathey had obtained judgment against Johnson in the amount of $4,995, she proceeded in garnishment against Midwestern because of the automobile liability insurance policy which provided for a $5,000 coverage. The trial court sustained the garnishment and rendered judgment against Midwestern for the amount of the judgment and Midwestern has perfected this appeal.

The Midwestern Insurance Company, plaintiff in error, will be hereinafter referred to as Midwestern and Betty Cathey, defendant in error, will be referred to as Cathey.

The facts are not in dispute and the only question to be determined in this appeal is whether the liability policy, issued by Midwestern to Harvey Johnson, had been legally cancelled prior to the above referred to collision. An examination of the terms of the policy and the method and procedure on the part of Midwestern to perfect the cancellation of the policy are necessary for a determination of the question.

Midwestern's Standard Automobile Policy No. 16-14303, insuring Harvey Johnson, address 929 N.W. 13th, Oklahoma City, for policy period June 16, 1950, to June 16, 1951, was issued June 16, 1950. The annual premium was to be $39. Of this premium, only $10 was ever paid, a $5 payment on July 25, 1950, and a like payment on September 15, 1950.

On June 30, 1950, a statement for the premium then unpaid was mailed to Harvey Johnson, postage prepaid, to his policy shown address, 929 N.W. 13th. A like statement was mailed on July 31, August 31, September 15 and 30, October 16 and 31. None of these notices were returned by the postal authorities as undelivered.

The Midwestern policy form, involved herein, including the cancellation provision, was authorized and approved by the State Insurance Board of Oklahoma. The policy provides for the following method of cancellation:

'Cancellation. This policy may be canceled by the named insured by mailing to the company written notice stating when thereafter such cancellation shall be effective. This policy may be canceled by the company by mailing to the named insured at the address shown in this policy written notice stating when not less than five days thereafter such cancellation shall be effective. The mailing of notice as aforesaid shall be sufficient proof of notice and the effective date and hour of cancellation stated in the notice shall become the end of the policy period. Delivery of such written notice either by the named insured or by the company shall be equivalent to mailing.'

In its endeavor to cancel the policy for the assured's continued failure to pay the premium, Midwestern, on November 28, 1950, mailed a notice to Harvey Johnson to the address shown in the policy, to-wit: 929 N.W. 13th Street, Oklahoma City, advising him that the policy was cancelled as of 12:01 A.M., December 4, 1950, for nonpayment of premium. The envelope containing this notice of cancellation was by the postal authorities postmarked November 28, 1950, at 6:30 P.M., and was returned to the sender on December 1, 1950 at 4:30 P.M., undelivered for the reasons as stated on the envelope 'not here' and 'unknown at address.'

The accident which resulted in the death of Mrs. Cathey's husband occurred on January 26, 1951, after the policy was allegedly cancelled on December 4, 1950.

For reversal, Midwestern contends that the policy was cancelled in accordance with the terms of the contract by mailing notice of cancellation to the assured at the address designated in the policy and that such cancellation was effective and binding.

Cathey contends that the policy was not effectively cancelled because the insurance laws of Oklahoma, 36 O.S.1951 § 14, as interpreted by this court, particularly in the...