Sanborn v. Maryland Cas. Co., No. 51175

CourtUnited States State Supreme Court of Iowa
Writing for the CourtMOORE
Citation255 Iowa 1319,125 N.W.2d 758
Docket NumberNo. 51175
Decision Date14 January 1964
PartiesClyde SANBORN, Appellee, v. MARYLAND CASUALTY COMPANY, Appellant.

Page 758

125 N.W.2d 758
255 Iowa 1319
Clyde SANBORN, Appellee,
v.
MARYLAND CASUALTY COMPANY, Appellant.
No. 51175.
Supreme Court of Iowa.
Jan. 14, 1964.

[255 Iowa 1320]

Page 759

Irish & Haughey, Altoona, for appellant.

Linnan, Lynch & Straub, Algona, for appellee.

MOORE, Justice.

This is an action for declaratory judgment by plaintiff, Clyde Sanborn, against defendant, Maryland Casualty Company. In his petition plaintiff alleged and in the trial court contended coverage under a family liability insurance policy was automatically extended past the expiration date and asked for a declaration of his rights against defendant. He based his [255 Iowa 1321] contention on alleged custom and an understanding with defendant's agent that coverage was to continue until plaintiff stated otherwise. Defendant asserted that by its expressed terms the policy had expired and denied any liability arising from an accident which occurred four months thereafter.

The trial court found defendant was estopped to deny the insurance policy was in force and effect at the time of the accident. From a decree finding defendant obligated to investigate and defend the action brought for injuries received in the accident and to pay any judgment resulting therefrom, defendant has appealed.

I. Our rules of procedure do not state whether an action for declaratory relief or judgment should be in the law or equity forum of the district court but our rule is now well established that the legal or equitable nature of the proceeding is to be determined by the pleadings, the relief sought, and the nature of each case. Wetzstein v. Dehrkoop, 241 Iowa 1237, 1246, 44 N.W.2d 695, 700, and citations; Henderson v. Hawkeye-Security Ins. Co., 252 Iowa 97, 100, 106 N.W.2d 86, 88. This case was filed and tried as an equitable action. We therefore review it de novo.

In June 1956 plaintiff purchased a 1949 Ford pickup truck to use on his farm and as an auxiliary vehicle at his furniture store. Shortly thereafter he talked to Claude Timmons, an insurance agent at Estherville. He told Timmons it was very important he have coverage, he could not afford to be without it, he wanted coverage of $100,000 to $300,000 in an old line stock company and wanted the policy automatically renewed until he informed the agent otherwise. Timmons replied plaintiff's plate glass insurance was with defendant company and it would be a good one to write the truck insurance. Plaintiff agreed and told Timmons he would rely on him to see he had good coverage.

Soon after this conversation Timmons delivered to plaintiff a policy of insurance on the truck. It was written by defendant and

Page 760

was countersigned by Timmons as defendant's 'Authorized Representative'. Plaintiff then paid Timmons the first year's premium.

[255 Iowa 1322] Without requests or applications by plaintiff some time prior to June 11 of the years 1957, 1958 and 1959 the renewal of this policy was handled simply by the agent Timmons delivering a new policy to plaintiff who paid the premium on Timmons' request or billing.

A renewal policy was again written in June 1960 covering the period from June 11, 1960 to June 11, 1961. It is exhibit C in the record. The evidence is in dispute as to whether plaintiff signed an application for this policy. Defendant contends he signed an application for this 'Safe Driver Policy' prior to its issuance. Plaintiff admits his signature appears on such an application but testified he signed it in November 1961 under the impression it was an application for renewal of his plate glass insurance. His plate glass insurance had previously always been renewed by Timmons without any request. Timmons' testimony sheds no light on this dispute. We believe it is of little importance as a renewal policy was issued for that period with the same general terms and signed by Timmons as 'Authorized Representative' of defendant the same as all prior policies.

In June 1961 and just prior thereto nothing was done to renew the policy. Defendant had in previous years mailed to Timmons a list of policies about to expire, including plaintiff's. The manager of defendant's Des Moines office was unable to find any record such a notice was sent in 1961. Timmons testified he relied on defendant to notify him of the expiration date and none was received in 1961. He also kept a tickler or monthly expiration system showing the expiration dates of policies but by oversight failed to renew plaintiff's policy although he knew plaintiff had left the renewals to him. Timmons was unable to give any reason for the failure. He referred to it as a 'comedy of errors'.

October 14, 1961 plaintiff's truck was involved in an accident in Estherville. The next day upon learning of the accident plaintiff, believing his insurance was in full force, immediately phoned Timmons. Timmons told plaintiff the insurance was in force and he would have an adjuster come and take care of the matter.

[255 Iowa 1323] Defendant company when contacted by Timmons informed him plaintiff's insurance had expired. They refused to investigate or do anything about the accident. When so advised plaintiff sent a registered letter to defendant enclosing a bank money order for more than the usual yearly premium. He demanded they investigate and defend against any claim resulting therefrom. Defendant refused the demands, also to defend an action later instituted against plaintiff by a person injured in the accident.

For reversal of the decree holding defendant estopped to deny the policy, exhibit C, was renewed and in force at the time of the accident, it relies on these propositions: (1) plaintiff has based his case on negligence by which estoppel cannot be established, (2) plaintiff failed to prove his freedom from contributory negligence, (3) the policy contains the entire agreement of the parties and any oral agreement made prior thereto was merged in the policy, (4) Timmons, as agent for the company, had no authority to waive the provisions of the policy, (5) each policy was a separate contract of insurance, (6) neither defendant nor Timmons was under any obligation to notify plaintiff of the expiration of the policy, (7) plaintiff was notified of a change in method of writing this policy in 1960 and had no right to rely on any custom or course of action established prior to such change, (8) the trial court's ruling has the effect of making a new contract between the parties, and (9) the trial court's ruling puts an unconscionable and unbearable burden on companies engaged in liability insurance business.

II. We consider defendant's first two propositions together. Among plaintiff's

Page 761

many allegations for declaratory relief are that defendant and its agent Timmons negligently failed to give plaintiff notice of the expiration of the policy and plaintiff was free from negligence. However a reading of the entire petition clearly establishes plaintiff's claim is based on estoppel, not negligence. Plaintiff's position is thus stated in his brief and argument. 'Appellee does not contend and never has that this is a negligence action. Appellee does contend that this is an equitable action based upon an oral contract to renew the insurance policy and that this is an action based upon estoppel. [255 Iowa 1324] Appellee's position, therefore, is that the court has a right in determining these questions to consider the negligence of the insurer and its agent.'

This case was pleaded, submitted and decided by the court on this theory. We find no merit in defendant's first two assigned propositions.

III. Defendant's third, fifth and eighth propositions are so interrelated that we consider them in one division. Defendant argues the agreement for insurance made by plaintiff and agent...

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18 practice notes
  • Iowa Movers and Warehousemen's Ass'n v. Briggs, No. 2--57422
    • United States
    • United States State Supreme Court of Iowa
    • January 21, 1976
    ...of one who has relied thereon. It is resorted to when otherwise manifest injustice would result. Sanborn v. Maryland Casualty Co., 255 Iowa 1319, 1327, 125 N.W.2d 758, 763, and citations; 28 Am.Jur.2d Estoppel and Waiver, section 27, page 627, section 28, page 629. It is not generally invok......
  • S & M Finance Co. Fort Dodge v. Iowa State Tax Commission, No. 52975
    • United States
    • United States State Supreme Court of Iowa
    • November 12, 1968
    ...of one who has relied thereon. It is resorted to when otherwise manifest injustice would result. Sanborn v. Maryland Casualty Co., 255 Iowa 1319, 1327, 125 N.W.2d 758, 763, and citations; 28 Am.Jur.2d, Estoppel and Waiver, section 27, page 627, section 28, page 629. It is not generally invo......
  • General Cas. Co. of Wis. v. Hines, No. 52778
    • United States
    • United States State Supreme Court of Iowa
    • February 6, 1968
    ...no evidence was received and when that matter is determined, that party has the burden of proof.' See also Sanborn v. Maryland Cas. Co., 255 Iowa 1319, 1321, 125 N.W.2d 758; Pacific Ins. Co., etc. v. Christianson, 253 Iowa 241, 243, 111 N.W.2d 679; Fortgang Brothers, Inc. v. Cowles, 249 Iow......
  • DeWall v. Prentice, No. 56126
    • United States
    • United States State Supreme Court of Iowa
    • December 18, 1974
    ...79 S.Ct. 760, 762--763, 3 L.Ed.2d 770 (1959); Sioux City v. Johnson, 165 N.W.2d 762, 767 (Iowa 1969); Sanborn v. Maryland Casualty Co., 255 Iowa 1319, 1327, 125 N.W.2d 758 (1964); 28 Am.Jur.2d, Estoppel and Waiver, §§ 26--28; 31 C.J.S. Estoppel §§ Reasonably relying upon all of the aforesai......
  • Request a trial to view additional results
18 cases
  • Iowa Movers and Warehousemen's Ass'n v. Briggs, No. 2--57422
    • United States
    • United States State Supreme Court of Iowa
    • January 21, 1976
    ...of one who has relied thereon. It is resorted to when otherwise manifest injustice would result. Sanborn v. Maryland Casualty Co., 255 Iowa 1319, 1327, 125 N.W.2d 758, 763, and citations; 28 Am.Jur.2d Estoppel and Waiver, section 27, page 627, section 28, page 629. It is not generally invok......
  • S & M Finance Co. Fort Dodge v. Iowa State Tax Commission, No. 52975
    • United States
    • United States State Supreme Court of Iowa
    • November 12, 1968
    ...of one who has relied thereon. It is resorted to when otherwise manifest injustice would result. Sanborn v. Maryland Casualty Co., 255 Iowa 1319, 1327, 125 N.W.2d 758, 763, and citations; 28 Am.Jur.2d, Estoppel and Waiver, section 27, page 627, section 28, page 629. It is not generally invo......
  • General Cas. Co. of Wis. v. Hines, No. 52778
    • United States
    • United States State Supreme Court of Iowa
    • February 6, 1968
    ...no evidence was received and when that matter is determined, that party has the burden of proof.' See also Sanborn v. Maryland Cas. Co., 255 Iowa 1319, 1321, 125 N.W.2d 758; Pacific Ins. Co., etc. v. Christianson, 253 Iowa 241, 243, 111 N.W.2d 679; Fortgang Brothers, Inc. v. Cowles, 249 Iow......
  • DeWall v. Prentice, No. 56126
    • United States
    • United States State Supreme Court of Iowa
    • December 18, 1974
    ...79 S.Ct. 760, 762--763, 3 L.Ed.2d 770 (1959); Sioux City v. Johnson, 165 N.W.2d 762, 767 (Iowa 1969); Sanborn v. Maryland Casualty Co., 255 Iowa 1319, 1327, 125 N.W.2d 758 (1964); 28 Am.Jur.2d, Estoppel and Waiver, §§ 26--28; 31 C.J.S. Estoppel §§ Reasonably relying upon all of the aforesai......
  • Request a trial to view additional results

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