Prillaman v. Century Indemnity Co. of Hartford, Conn., 5102.

• Decision Date: 08 November 1943
• Docket Number: No. 5102.,5102.
• Parties: PRILLAMAN v. CENTURY INDEMNITY CO. OF HARTFORD, CONN.
• Court: U.S. Court of Appeals — Fourth Circuit

138 F.2d 821 (1943)

PRILLAMAN v. CENTURY INDEMNITY CO. OF HARTFORD, CONN.

No. 5102.

Circuit Court of Appeals, Fourth Circuit.

November 8, 1943.

Moss A. Plunkett, of Roanoke, Va. (B. A. Davis, Jr., of Rocky Mount, Va., on the brief), for appellant.

Aubrey R. Bowles, Jr., of Richmond, Va. (Bowles, Anderson & Boyd, of Richmond, Va., and Showalter, Parsons, Kuyk & Staples, of Roanoke, Va., on the brief), for appellee.

Before PARKER, SOPER, and DOBIE, Circuit Judges.

SOPER, Circuit Judge.

Five days after the automobile insurance policy in suit was surrendered by the insured, in accordance with an agreement of cancellation, the car was involved in an accident in which the appellant's decedent was killed. After the accident a suit was entered by the appellant and a judgment of $10,000 was recovered by him against the person who was in control of the car at the time of the accident with the permission of the insured. The pending case was instituted by the appellant against the Insurance Company upon the theory that the person in charge of the car at the time of the accident was covered by the policy as well as the named insured. The sole question on this appeal is whether, as the District Judge held in a non-jury trial, the cancellation was valid and effective.

The policy was issued on May 28, 1941, for the term of one year by the Danville agent of the Insurance Company to an employee of the Palmer Produce Company, who owned the car and sometimes used it in his employer's business. It was understood that the Produce Company and the insured should each pay one-half of the premium of $20.51. The agent was accountable to the Insurance Company for the amount of the premium on July 15, 1941, and on that day paid the amount to the Insurance Company out of his own pocket. The Produce Company paid its half of the premium to the agent on July 18, 1941, but the insured did not pay his half. On September 1, 1941, the agent went to the place of business of the Produce Company to collect the balance of the premium and then learned that the insured had been found short in his accounts and had been discharged. He learned also that Mr. Palmer of the Produce Company had assisted the insured in the purchase of the car by endorsing his note. The agent remarked that his company did not want insurance of that type and immediately sought out the insured at his new place of business. He came up with him on September 2nd and told him that as the premium was past due he desired to cancel the insurance. The insured assented saying that he was about to turn the car back as he would no longer receive financial assistance in his purchase from the Produce Company. He thereupon caused the policy to be delivered to the agent who mailed it on the same day to the home office of the Insurance Company where on September 4th it was received as a cancelled policy and appropriate credits for the return premium were entered on its books. The insured then offered the car for sale and it was in the hands of a prospective purchaser for trial at the time of the accident.

The policy provided that it might be cancelled by either party to the contract by mailing written notice to the other; but the District Judge held, in accordance with the established rule, that this method of cancellation was not exclusive and that the parties might abrogate it by mutual consent....