Southern Farm Bureau Cas. Ins. Co. v. Ausborn
| Decision Date | 06 July 1967 |
| Docket Number | No. 18675,18675 |
| Citation | 249 S.C. 627,155 S.E.2d 902 |
| Court | South Carolina Supreme Court |
| Parties | SOUTHERN FARM BUREAU CASUALTY INSURANCE COMPANY, Appellant, v. Melvin H. AUSBORN, Edith L. Hughey, Norman V. Hughey, and Mary Carole Hughey,of whom Melvin H. Ausborn is, Rospondent. |
Love, Thornton, Arnold & Thomason, Greenville, for appellant.
Wyche, Burgess, Freeman & Parham, Greenville, for respondent.
This action is one under the 'Uniform Declaratory Judgments Act', Section 10--2001 et seq., 1962 Code of Laws. It is brought by Southern Farm Bureau Casualty Insurance Company, the appellant herein, for a determination of its liability, if any, arising under an automobile liability insurance binder issued by it, on February 7, 1965, to Melvin H. Ausborn, the respondent herein.
The appellant, in substance, alleged that it was entitled to deny any coverage to the respondent for an automobile accident occurring on March 10, 1965, resulting in suits for damages against him by Edith L. Hughey, Norman V. Hughey and Mary Carole Hughey, because of certain untrue and false statements made by Ausborn in his written application, dated February 7, 1965, for automobile liability insurance.
Ausborn contends that the appellant was bound to afford him coverage on account of the automobile liability insurance binder which became effective February 7, 1965, that he paid the premium on said policy for coverage for the period commencing on said date and ending on March 10, 1965, and that by accepting and retaining the premium, assumed responsibility under its coverage for the injuries to the Hugheys, and that by its acts and conduct waived any right it had to deny coverage.
This case came on for trial before The Honorable James H. Price, Jr., County Judge, without a jury. The testimony was taken and the trial judge, by his order of May 24, 1966, dismissed the complaint and held that the appellant was bound under the aforesaid binder to afford liability coverage through March 10, 1965, within the limits specified in the application. The appellant prosecutes an appeal to this court from said order.
This action was tried by the judge, without a jury, and the findings of fact made by him have the same force and effect as the verdict of a jury, unless he committed some error of law leading to an erroneous conclusion, or the evidence is reasonably susceptible of the opposite conclusion only. Crook v. State Farm Mut. Automobile Ins. Co., 235 S.C. 452, 112 S.E.2d 241. Bankers Ins. Co. of Pa. v. Griffin, 244 S.C. 552, 137 S.E.2d 785. We consider the exceptions in the light of this rule.
The respondent, on January 27, 1965, purchased a new Ford automobile from Ford-Horne, an automobile dealer located in Greenville, South Carolina, paying a part of the purchase price in cash and financing the unpaid portion with a credit company, with liability insurance on said automobile with a company other than the appellant. The liability policy obtained by the respondent at the time of the purchase of the automobile was cancelled on or about February 7, 1965, and he was notified by Ford-Horne to bring the automobile back to its place of business and to arrange for another liability policy. The respondent was not successful in his efforts to secure a policy. Thereafter, a representative of Ford-Horne called one McNair, an agent for the appellant, and he received an application for liability insurance from the respondent and based thereon issued a binder.
The application for liability insurance was filled out by McNair and signed by the respondent. Among the questions asked on the application and the answers given were the following:
Admittedly, the foregoing answers given by the respondent to the questions asked in the application were false and untrue.
The evidence shows, according to the South Carolina State Highway Department records, that the respondent was charged with and convicted of speeding on May 20, 1963, again on June 16, 1963, with reckless driving on August 22, 1963, for which his driver's license was suspended for four months, beginning November 22, 1963, again for speeding on September 24, 1963, again on September 7, 1964, and was charged with failing to yield right of way on September 8, 1964, at which time his driver's license was suspended for two months, beginning October 13, 1964, and again with speeding on October 21, 1964. The record also shows that the respondent's license to drive a motor vehicle was suspended on December 17, 1964, because of the cancellation of his insurance under the Safety Responsibility Act. Additionally, the records from the Greenville Police Department, pertaining to the respondent, show that on June 30, 1963, and on October 21, 1964, he paid fines for driving too fast for conditions.
The respondent testified that he informed McNair of his arrest, conviction and suspension of driving license for the violation which occurred on August 22, 1963. He does not testify that he informed McNair of the other charges and convictions enumerated above. When asked why he answered the question on the application relating to prior arrests or convictions and license suspension 'No' in view of his contention that he had informed McNair of his previous arrest, conviction and license suspension in August, 1963, the respondent answered:
'A. It said within the past three years and it had been three years since I had had that wreck and been convicted.
'Q. Well, '63 wasn't three years from '65, was it?
'A. '63, '64 and '65.
'
The trial judge held that a conviction, in its legal sense, means a final judgment conclusively establishing guilt. He further stated that in this technical sense the respondent was convicted only of the reckless driving offense, even though he found that Ausborn had been given at least six tickets for moving violations, excluding the reckless driving conviction, and had forfeited bonds thereon. He further held that under a liberal construction of the word 'conviction' the respondent was aware of the fact that he should have answered the question on the application differently. Ausborn contended that the question on the application was directed to the three years before the date thereof and since it was propounded to him in 1965 and the violation occurred in 1963, that such constituted a lapse of three years. The trial judge held that such might have been justified in the mind of Ausborn but such was not, in fact, a justifiable reason for the answer given in the application.
It was a disputed question of fact as to whether the respondent told McNair of his arrest and conviction for reckless driving on August 22, 1963. The trial judge has found that the respondent did inform McNair of such and the knowledge of McNair acquired within the scope of his agency is imputable to the appellant, and, if the appellant, at the inception of the contract, had knowledge of facts which render the policy void at its option, and the company delivers the binder as a valid one, it is estopped to assert such ground as a forfeiture. Mickle v. Dixie Security Life Ins. Co., 216 S.C. 168, 57 S.E.2d 73. It follows that the answer 'No' in the application for the liability insurance, even though as recorded was false and untrue, would not permit the appellant to rescind the policy on the basis of the arrest and conviction of reckless driving on August 22, 1963. However, the respondent had other traffic violations of which McNair had no knowledge and the rule just quoted would not be applicable thereto.
The trial judge obviously concluded that since the other traffic violations of the respondent did not result in a 'conviction' as that word was construed by him, a false and untrue answer to the question in the application would not be a false representation. In so holding, we think the trial judge committed error of law which led him to an erroneous conclusion.
Under the provisions of Title 46, Chapter 7, Uniform Act Regulating Traffic, it is unlawful for any person to drive a motor vehicle in a reckless manner, Section 46--342; and it is unlawful for any person operating a motor vehicle to fail to yield the right of way in accordance with Sections 46--421 to 46--425, inclusive; and it is unlawful to violate speed restrictions contained in Sections 46--361 to 46--372. Section 46--346, Chapter 7, provides that an entry of a plea of guilty, the forfeiture of any bail or the entry of a plea of nolo contendere for violation of the foregoing provisions shall have the same effect as a conviction after trial.
Under the point system for evaluating operating records of drivers as such is contained in Title 46, Chapter 6, the term 'conviction' includes the entry of any plea of guilty or plea of nolo contendere, and the forfeiture of bail or collateral deposited to secure a defendant's appearance in court. Likewise, under the 'Motor Vehicle Safety Responsibility Act', Section 46--702(1), it is said that a 'conviction' includes the entry of any plea of guilty, of nolo contendere, and the forfeiture of any bail or collateral deposited to secure a defendant's appearance in court. It thus appears that the forfeiture of bond or the payment of fines by the respondent amounted to 'convictions' under the foregoing sections of the Code. Admittedly, the respondent had at least six moving traffic violations and either paid a fine or forfeited a bond for each violation. Such constituted 'convictions' and were not revealed to the appellant on the application made for liability insurance. To this extent the answer given was false and untrue.
Representations in an application for a policy of...
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