Passmore v. Austin
| Decision Date | 17 February 1953 |
| Docket Number | No. 7944,7944 |
| Citation | 73 Idaho 484,253 P.2d 800 |
| Parties | PASSMORE et al. v. AUSTIN et al. |
| Court | Idaho Supreme Court |
Branch Bird and Cecil D. Hobdey, Gooding, for claimant.
Hawley & Marcus, Boise, James, Shaw & James, Gooding, for employer.
E. B. Smith, Boise, for respondents.
On October 4, 1951, one Beryl M. Passmore was in the employ of appellant Austin at Wendell, Idaho, as an oil-tank driver. Early in the morning of that day, Passmore was driving an oil tanker about three miles east of American Falls when the equipment ran off the highway and the driver was fatally injured. Passmore was the husband of appellant Mary E. Passmore and the father of Beryl M. Passmore, Jr.
Claim for compensation was filed with the Industrial Accident Board. Thereafter, petition for hearing was duly filed with the board wherein appellant Austin and respondent as his surety were named as defendants. Appellant Austin answered admitting liability. Respondent answered and denied liability on the ground that it had canceled the surety bond of appellant Austin prior to the accident for non-payment of premium.
Hearing was duly had on the claim at Gooding on May 9, 1952, and was completed at Boise on May 27, 1952. The hearing resulted in an order of an award against appellant Austin and in dismissal of the claim as against respondent on the ground that the surety bond had been canceled prior to the accident. From such order of dismissal appellants have appealed to this court.
The controlling question on this appeal is whether the continuous statutory surety bond, dated October 29, 1947, filed by respondent with the Industrial Accident Board insuring appellant Austin against liability under the Workmen's Compensation Law, had been legally canceled at the time of the accident, or was still in force and effect.
The Hurtt Agency of Boise, was the duly authorized agent of respondent. In August, 1951, the Hurtt Agency billed Austin for premiums earned to July 1, 1951, in the sum of $211.36; and under date of August 8, 1951, received a check from Austin for $100 to apply on the account. The proceeds of this check were not remitted at the time to the office of respondent at Coeur d'Alene. On August 23, 1951, respondent wrote to Austin requesting payment of $211.29 and stating if this amount were not paid by September 4, it would be necessary to cancel the insurance. A copy of this letter went to the Hurtt Agency.
Under date of September 5, 1951, respondent mailed to the Industrial Accident Board a cancellation notice which was there received September 7, 1951, and which reads as follows:
'Coeur d'Alene, Idaho
Sept. 5, 1951
'Cancellation Notice
'To The Industrial Accident Board Boise, Idaho and to Wm. L. Austin Wendell, Idaho
'You and each of you are hereby notified that the Idaho Compensation Company hereby cancels Workmen's Compensation Policy No. C-10151 issued to the above named employer, and Bond No. C-10151 filed with the Industrial Accident Board, Boise, Idaho, covering the compensation liability of said employer in the State of Idaho and dated Nov. 21, 1947, said cancellation to be effective at 12:01 A. M. on the 17th. day of Sept. 1951, said Policy and Bond to be null and void without any further notice after said 17th. day of Sept. 1951
By Ralph S. Nelson
'Reason for cancellation: Non-payment of premium' A copy of such cancellation notice was sent to the Hurtt Agency.
A few days before September 17, 1951, the Hurtt Agency called Austin on the telephone at his office in Wendell and made arrangements to meet him there on September 17, to pick up the balance of the past due premium. The meeting was held and Austin gave the Hurtt Agency a check for the balance due in the sum of $111.36. Austin testified at the hearing that the Hurtts told him the payment put his policy in good standing. Mrs. Hurtt testified she told Austin she would send the remittance to the company and ask for reinstatement of the policy.
On the morning of October 4, 1951, the fatal accident happened to Passmore. At 7 o'clock P. M. on that day the Hurtt Agency mailed a remittance to respondent for $184.94 to cover the $100 received on August 8 and $111.36 received on September 17 less its commission.
Both the statute and the surety bond provide how the insurance may be canceled. Section 72-808, I.C., 1951 Session Laws, Ch. 171, p. 366, reads as follows:
'No policy of insurance or guaranty contract or surety bond issued against liability arising under this act shall be cancelled within the time limited in such contract for its expiration until at least ten days after notice of cancellation of such contract on a date specified in such notice, shall have been filed with the industrial accident board, and also served on the other contracting party either personally or by registered mail.'
The bond contains the following provision:
'This bond may be cancelled at any time by the Surety upon notice of cancellation of such Bond on a date specified in such notice filed with the Industrial Accident Board and also served upon the employer either personally or by registered mail and may be cancelled by the Principal by similar notice filed with the said Board and served upon the Surety by Registered mail; but no such cancellation shall be effective if made within ten (10) days of the date such notice is so filed and served.'
The record does not disclose and respondent does not appear to contend that the cancellation notice was served upon appellant Austin either personally or by registered mail. Respondent attempted to show that the cancellation notice was sent to Austin by ordinary mail by offering in evidence the affidavit of a policy clerk in the office of respondent in Coeur d'Alene but the offer as made was rejected by the board. This rejected exhibit bears the stamp that it was received by the board on May 26, 1952, that is, the day before the second hearing on May 27, 1952. The unearned portion of the premium paid was not tendered back to appellant Austin until during the hearing on May 27, 1952.
Under cross-examination Austin testified that he received a letter from respondent along about September 7, 1952. He testified:
* * *
* * *
'* * * Have you got that letter with you?
On the foregoing evidence, the board found:
'While Austin evaded questions as to the contents and service of said notice and confused it with a prior letter dated August 23, 1951, in which the Idaho Compensation Company had warned him of cancellation (Ex. 19) there is little doubt that service of such notice of cancellation upon him was duly made, although he did not himself realize its import and effect and the necessity for his protection of its formal reinstatement on the records of the board.'
The finding that Austin evaded questions does not appear to be justified from the foregoing testimony; and the finding that 'there is little doubt that service of such notice of cancellation upon him was duly made' is not a positive finding of any fact.
The Board's Ruling of Law No. 13 was:
'The board finds and rules that cancellation of the surety bond theretofore filed on behalf of the employer was effected as of September 17, 1951, pursuant to the provisions of the bond and of Sec. 72-808 I.C.'
Respondent attempts to justify the board's conclusion of law that the surety bond had been legally canceled by stating on page 17 of its brief as follows:
'In view of Austin's acknowledging that he received the instrument of policy cancellation as of September 7, 1951, and the Board finding in that regard that he did, such constituted the equivalent of personal service required by I.C., section 72-808; for acknowledgement of service is the full equivalent of 'actual personal service'.'
The only case cited to support such contention is Priester v. Priester, 131 S.C. 284, 127 S.E. 18. In the Priester case the court was dealing with a written acceptance of service endorsed upon the back of a formal notice of filing a decree. It was not concerned with statutory or contractual requirements as to notice of cancellation of insurance in a compensation case.
Our court early adopted the rule that compensation insurance could only be canceled by a strict compliance with the conditions of the contract. The insurance policy under consideration in Hauter v. Coeur d'Alene, etc., Min. Co., 39 Idaho 621, 228 P. 259, provided for 30 days notice of cancellation. The notice given only provided for 12 days notice prior to cancellation although 30 days had elapsed after giving of the notice before the injury occurred. The court held the attempted cancellation ineffectual and said, 39 Idaho at page 631, 228 P. at page 262:
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...Id. (citing Moore v. London Guarantee & Accident Co., 233 Md. 425, 428-29,197 A.2d 132, 134 (1964)); see also Passmore v. Austin, 73 Idaho 484, 253 P.2d 800, 804 (1953) (noting that strict compliance with the statute is mandatory in order to cancel a workers' compensation insurance policy);......
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...Id. (citing Moore v. London Guarantee & Accident Co., 233 Md. 425, 428-29,197 A.2d 132, 134 (1963)); see also Passmore v. Austin, 253 P.2d 800, 804 (Idaho 1953) (noting that strict compliance with the statute is mandatory in order to cancel a workers' compensation insurance policy); Preferr......