Oill v. Lumbermen's Mut. Ins. Co

• Decision Date: 17 December 1948
• Docket Number: No. 16160.,16160.
• Parties: OILL et al. v. LUMBERMEN'S MUT. INS. CO.
• Court: South Carolina Supreme Court

50 S.E.2d 923

OILL et al.

v.LUMBERMEN'S MUT. INS. CO.

No. 16160.

Supreme Court of South Carolina.

Dec. 17, 1948.

Appeal from Greenville County Court; W. B. McGowan, Judge.

Action on automobile insurance policy by Thomas R. Dill and R. L. Burns against the Lumbermen's Mutual Insurance Company. From the judgment, the defendant appeals.

Affirmed as modified.

Stephen Nettles, of Greenville, for appellant.

B. A. Bolt, of Greenville, for respondents.

FISHBURNE, Justice.

On January 22, 1946, The Lumbermen's Mutual Insurance Company issued to Dill & Burns, a copartnership operating a business in Greenville as used car dealers, its policy insuring them against loss and damage from collision and other specified hazards to automobiles. The policy covered not only the automobiles at Greenville, but included those being driven over the roads to the place of business of Dill & Burns in Greenville.

The insurance was for the actual cash value of the cars, less $50 deductible on each car, with a maximum liability of $4,000. Dill & Burns were required to make and maintain a monthly deposit with the insurance company of $100 on account of the premium, which deposit had not been exhausted at the time of the loss involved in this litigation.

On April 26, 1946, two used cars which had been purchased in Baltimore by Dill & Burns, were damaged in a collision while being driven to Greenville for resale. Following the collision, the plaintiffs brought this action against the defendant for the damages sustained under the insurance policy. The insurance company denied liability on the ground that the plaintiffs had voluntarily surrendered the policy for cancellation prior to the loss. By consent of the parties, the case was submitted to the trial court without a jury, and the court found that the policy had not been cancelled by mutual consent, and that it was still in effect at the time of the collision. Accordingly, judgment was entered against the insurance company in favor of the plaintiffs for the amount of $1200.54, which the court found to be the amount of the loss and damage sustained, with interest thereon, less $50 deductible on one car. The matter is now before us on appeal by the insurance company.

There is no real dispute as to the facts. The policy contained this provision:

"13. Cancellation--This policy may be canceled by the insured by surrender there of or 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 assured 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 insured or by the company shall be equivalent to mailing.

"If the insured cancels, earned premiums shall be computed in accordance with the customary short rate table and procedure. If the company cancels, earned premiums shall be computed pro rata. Premium adjustment may be made at the time cancellation is effected and, if not then made, shall be made as soon as practicable after cancellation becomes effective. The company's check or the check of its representative mailed or delivered as aforesaid shall be a sufficient tender of any refund of premium due to the insured."

The policy was issued to the respondents, Dill & Burns, by appellant through it's local agent at Greenville, R. V. Chandler, Jr., who did business in the name of Chandler Insurance Agency. Under date April 8, 1946, Chandler wrote the following letter to Mr. Burns:

"Dear Mr. Burns:

"Re: Dill & Burns Used Cars Policy

"No. LA 35 692

"We have been requested by the company to pick up the above captioned policy for cancellation. Please do not think that they are asking cancellation of your individual policy because I can assure you that all policies of this type are having to be cancelled. It does not in any way throw a reflection on you or Mr. Dill, but it is just a type risk the company has learned through experience is unprofitable.

"As quickly as you can send us the policy we will forward it on to the company and they in turn will advise us the amount of your earned premium. We can then give you our check for the unearned portion of your $100.00 paid us.

"We will appreciate greatly your giving this matter your prompt attention, and sincerely hope that this will not inconvenience you in any way."

Mr. Burns received the letter in due course, but did nothing in regard to it. Some days after its receipt, Mr. Chandler telephoned him and requested that he bring the policy to the office. Mr. Burns states that in reply to this request, "I told him I would bring it up there and talk to him about it." Thereafter, on April 19th, or a day or so later, Burns went to Chandler's office in Greenville and left the policy with his secretary, who happened to be Mr. Chandler's wife. He stated that he did not deliver it to her for cancellation; that he did not wish to cancel the policy. When asked on cross examination what he said to her with reference to the matter, he replied: "I asked her was R. V. (Mr. Chandler) there when I went in, and she said no, that he would be there after a while. I told her I brought this policy in and want to leave it with you, and I want to see R. V. I wanted to keep the policy if I could."

He told the secretary that he wanted to see "R. V." He stated further on cross examination: "I didn't want to let the policy go * * *." The witness said that he knew the insurance company was going to cancel the policy, and. "I wanted to see him (R. V.) about more insurance if he was going to cancel it, because we were bringing those cars from up the country, and I wanted them insured."

The other partner, Mr. Dill, testified that upon receipt of the letter referred to from the defendant, Mr. Chandler, he and Mr. Burns, his partner, had discussed the matter and that he was apposed to cancelling and surrendering their insurance policy.

In his testimony, Mr. Chandler said that after writing the letter to Mr. Burns on April 8th with reference to the proposed cancellation of the policy, he received another letter from the general agent, in consequence of which he telephoned Mr. Burns and asked him to bring the policy to the office. He could not remember the exact conversation which took place be tween him and Mr. Burns, but he made no specific denial of Burns' statement that in this conversation the latter said, "I told him I would bring it up there and talk to him about it."

The two cars were wrecked in a collision while en route to Greenville on April 26, 1946. On the following day the loss and damage were reported by Burns to Chandler, the local agent, whereupon Chandler told him that the policy had been cancelled. On April 29th, Chandler mailed to Dill & Burns a check for the unearned portion of the premium, amounting to $75.-04; and on May 1st, respondents, who promptly sought legal advice, had their attorney return the check to Chandler.

Mr. Chandler testified that he cancelled the policy himself, on April 19th, the day it was delivered to his office by Mr. Burns. There, is a home office notation on the face of the policy indicating cancellation by appellant as of April 23rd, although it was not received at the home office at Mansfield, Ohio, until the 25th.

The question we have to decide is whether, under these circumstances, the policy had been effectively cancelled by mutual consent, without reference to the cancellation provisions contained therein; or whether the policy was in full force and effect at the time of the accident.

Policy provisions giving either the insured or the insurer the right to cancel the contract upon notice to the other are frequently embodied in liability insurance, fire insurance and certain other types of policies. 29...