Simons v. American Fire Underwriters of American Indem. Co.

• Decision Date: 16 November 1943
• Docket Number: 15586.
• Citation: 27 S.E.2d 809,203 S.C. 471
• Parties: SIMONS et al. v. AMERICAN FIRE UNDERWRITERS OF AMERICAN INDEMNITY CO.
• Court: South Carolina Supreme Court

27 S.E.2d 809

203 S.C. 471

SIMONS et al. v. AMERICAN FIRE UNDERWRITERS OF AMERICAN INDEMNITY CO.

No. 15586.

Supreme Court of South Carolina

November 16, 1943

Edens & Weinberg, of Columbia, for appellant.

T P. Taylor and Tompkins & Tompkins, all of Columbia, for respondents.

BAKER Justice.

This action arose out of a collision policy of insurance issued at the time and under the circumstances hereinafter set forth by the appellant to the respondent, Holmes Simons, Jr Commercial Credit Corporation is a party to the action because the policy of insurance was assigned to it by reason of its chattel mortgage covering the insured automobile, and was delivered to it.

On the evening of March 6, 1941, between the hours of six and seven o'clock, the respondent, Holmes Simons, Jr., called on the telephone one John V. Davis, who was engaged in the business of writing insurance (except life) in the City of Columbia, and requested him to write a collision policy of insurance on his, Simons' automobile, and deliver the policy to the Commercial Credit Corporation. The said insurance agent, who was a local agent for several companies among which was the respondent, agreed to write the policy "and he said he would cover me ."

On the morning of March 7, 1941, at about 10 o'clock appellant's agent Davis, without any knowledge or notice of the collision hereinafter related, having procured the detail information necessary for the writing of the policy, issued and countersigned a collision policy with appellant company covering the respondent Simons' automobile for a "Policy Period: From March 7, 1941 to March 7, 1942, 12:01 a. m., Standard Time, at the address of the Named Insured as stated herein." The policy provided "*** but this policy shall not be valid unless countersigned by a duly authorized representative of this Company." There is no contention that Davis was not the duly authorized agent of appellant, and that he did not have the authority to countersign the policy.

At an earlier hour on the same day (March 7, 1941), to wit, about 1:30 a.m., the respondent Simons had a collision in Kershaw County, damaging his automobile to the extent of Three Hundred and Ninety-six ($396) Dollars.

Upon the trial of the case, and at the conclusion of the testimony, the trial Judge directed a verdict in favor of respondents for the amount of damages to the car, less $50 deductible under the terms of the policy.

Prior to the trial of the case on its merits, appellant undertook to have the contract of insurance reformed so as to make its effective date from ten o'clock a. m., March 7, 1941, to ten o'clock a.m., March 7, 1942, alleging that the effective date in the policy from 12:01 a. m., March 7, 1941, to 12:01 a. m., March 7, 1942, was inserted by mutual mistake. By order dated December 18, 1941, such reformation was refused, and there was no appeal from this order.

When did the policy of insurance issued and countersigned by appellant through its agent, Davis, and delivered to Commercial Credit Corporation in accord with the instructions of Simons on the evening before, become a valid binding contract?

It is undisputed that on March 6, 1941, at about 7 o'clock p. m., the respondent, Simons, requested Davis, the local agent of appellant, to cover his automobile with collision and other insurance. Davis was known to this respondent as an established insurance agent, qualified and empowered to write automobile insurance policies. He represented three insurance companies, among which was the appellant, American Indemnity Company. For this and two other companies he was empowered to write, countersign and deliver policies. However, before writing the insurance in appellant company, Davis procured the consent of its general agent in Columbia, Lillard Insurance Agency--in fact, it was at the request of said general agent that the business was placed with appellant. Davis had intended writing the insurance in another company which he represented, and had such other company in mind when he agreed to cover the automobile with insurance when Simons 'phoned him on the afternoon before, although he had not stated to Simons the name of any company in which he was writng the policy.

The appellant states in its printed brief "that this case is definitely controlled by the case of Davis v. Home Insurance Co., 125 S.C. 381, 118 S.E. 536, which is directly in point," but in this we think the appellant is mistaken.

In the Davis case the controversy arose over the fact that the loss occurred within the twelve months period for which the premium had been paid by the insured, but after twelve months from the effective date of the policy as expressed therein. In other words, the effective date stated in the policy was an earlier date than the actual date of the countersigning of the policy. And the policy contained an express provision that it should be valid only when countersigned by the duly authorized agent of the Company. Because of this provision the policy was held effective to cover the loss.

In the policy now before the Court, the provision is: "*** but this policy shall not be valid unless countersigned by a duly authorized representative of this Company." (Emphasis added.) It was in fact so countersigned, and there is nothing in the instrument as introduced in evidence to deprive the insured of the right to rely upon the terms of the policy as far as the question of its taking effect is concerned.

The Court can take judicial notice of the fact that this contract of insurance was prepared by appellant, the insurer, and should therefore be construed most favorably to the insured. The Court can further take judicial notice of the fact that it is a common custom among insurance companies writing this class of insurance to permit its agents to verbally bind them to liability for loss for a reasonable length of time prior to the actual physical issuance of a policy.

When Davis, appellant's agent, was testifying as a witness for appellant, he was asked on cross-examination: "Q. Therefore, when you actually wrote this policy, the premium was based upon one year's coverage starting the night before you actually wrote it. That is what it says and that is right? A. That is what it says." This witness had just testified that he was charging a premium from 12:01 of the morning of March 7, 1941, until 12:01 of March 7, 1942 and that the...