Negvesky v. Alston
| Decision Date | 24 June 1957 |
| Citation | 312 P.2d 728,152 Cal.App.2d 66 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Rosemary NEGVESKY, Plaintiff and Respondent, v. Astor ALSTON, Robert Alston, Individually and doing subiness as a co-partnership, and Security Insurance Company of New Haven, Connecticut, Defendants, Security Insurance Company of New Haven, Connecticut, Appellant. Civ. 22219. |
Eugene S. Ives, Los Angeles, for appellant.
Dryden, Harrington, Horgan & Swartz, and Vernon G. Foster, Los Angeles, for respondent.
The facts in this case, told chronologically, are as follows:
Aster Alston and Robert Alston, copartners, were selling used cars, and running a garage in Hawthorne, California. March 10, 1952, they applied to an authorized agent of Security Insurance Company for a policy of liability insurance that, among other things, would cover any person driving an automobile in their possession and with their consent.
On April 8, 1952, the insurance company issued the policy, which was for one year. On April 9th their agent countersigned the policy and delivered it to the Alstons. The agent was authorized to effect binding insurance by his countersignature on policies.
The agent told the Alstons that the premium was $1,578.31. The Alstons told the agent they didn't have the money to pay the premium just then. The agent then agreed with them that they could pay the premium in three equal installments, over a period of sixty days. The first installment was due April 15, 1952.
In this connection the agent testified:
On the same day the policy was delivered, April 9, 1952, the Alstons gave Mrs. Marian Corbin permission to drive one of their automobiles, to try it for a day or two, to see if she wanted to buy it. While she was driving the car her husband asked one of the Alstons, in her presence, if they had insurance on their cars. Mr. Astor Alston said, "Yes. * * * I have a blanket insurance. * * * It is PL & PD.' * * * Anyone that was driving them was automatically insured.'
On the next day, April 10, 1952, while driving this car, Marian collided with a car driven by Rosemary Negvesky, plaintiff in this case.
April 15, 1952, the Alstons paid the first installment on the insurance premium by their check, but the check was returned from the bank marked 'insufficient funds.' After that the Alstons disappeared, and haven't been seen or heard of since.
May 5, 1952, the insurance company mailed the Alstons a notice cancelling the policy. At the same time the insurance company's bill against the Alstons for the unpaid premium was turned over to a collection agency. This was what it termed in the insurance business a pro rata cancellation.
The fact that it was a pro rate cancellation is revealing evidence that the insurance company at the time treated this policy as an existing valid contract of insurance. For there are two methods of cancellation, flat and pro rata. With a flat cancellation no claim for a premium is made. With a pro rata cancellation the insurance company demands payment by the insured of the pro rata portion of the premium for the time during which the policy was in force and effect.
Also the insurance company's agent testified that barring some collateral circumstance the policy should be deemed to effect coverage from its delivery until May 10, 1952.
January 14, 1953, Rosemary sued Mrs. Corbin and the Alstons for damages caused by Mrs. Corbin's alleged negligence. The following day the insurance company gave notice of rescission of the policy.
The insurance company was notified of its obligation under the policy to defend the lawsuit, but refused to defend. The case was prosecuted to judgment against Mrs. Corbin for $8,500, and the insurance company refused to pay the judgment.
This case is brought by Rosemary against the insurance company under the provisions of section 11580, subdivision (b)(2) of the Insurance Code. After trial in the Superior Court, it was found that the policy was in full force and effect on April 10, 1952, and judgment agianst the insurance company for $8,674.70 followed.
The insurance company appeals from the judgment upon three...
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