Surety Indem. Co. v. Estes

• Decision Date: 03 March 1964
• Docket Number: No. 18175,18175
• Citation: Surety Indem. Co. v. Estes, 135 S.E.2d 226, 243 S.C. 593 (S.C. 1964)
• Parties: The SURETY INDEMNITY COMPANY, Appellant, v. John S. ESTES, James S. Estes, a minor over the age of fourteen (14) years, J. M. Conway, Jr., Conway Construction Company, and Duke Power Company, Respondents.
• Court: South Carolina Supreme Court

Page 226

135 S.E.2d 226

243 S.C. 593

The SURETY INDEMNITY COMPANY, Appellant, v.John S. ESTES, James S. Estes, a minorover the age of fourteen (14) years, J. M. Conway, Jr., Conway Construction Company, and Duke Power Company, Respondents.

No. 18175.

Supreme Court of South Carolina.

March 3, 1964.

McDonald & Cox, Greenville, for appellant.

Julius B. Aiken, Haynsworth, Perry, Bryant, Marion & Johnstone, Leatherwood, Walker, Todd & Mann, Greenville, for respondents.

BRAILSFORD, Justice.

The appellant, The Surety Indemnity Company, an insurance company with its home office in Greenville, South Carolina, brought this action for a judgment declaring that an automobile liability insurance policy, which had been issued by it on May 18, 1961, to the respondent, John Stevens Estes, expired as of 12:01 A.M. Standard Time, November 18, 1962, because of the insured's failure to pay a required renewal premium within thirty days after that date.This is an appeal from a judgment of the County Court for Greenville County denying the relief sought and declaring the policy valid.

The original term of the policy was for six months and it had been twice renewed for similar terms under the following provision:

'This policy shall expire at 12:01 A.M. Standard Time on the expiration date shown above, except that it may be continued in force for successive policy periods by the payment of the required renewal premium to a duly authorized representative of the company within thirty days after the beginning of each such period.'

One of the automobiles covered by the policy was in a collision on December 1, 1962.The accident was reported to and was investigated by Surety.When this loss occurred, the insured had the absolute right to continue the policy for a six months period retroactive to November 18, 1962, by timely payment of the required premium.The record is clear that he intended to do so.The question is whether he has forfeited this contractual right through inadvertence or neglect.No binding or persuasive precedent has been cited and we have found none.The case will turn on its peculiar facts.

The insured first undertook to pay the renewal premium by mailing a check, drawn on the South Carolina National Bank of Greenville, to Surety on or about November 30, 1962.However, because of an inadvertent discrepancy on the face of the check, payment was refused by the bank, and the check was returned to the insured by letter dated December 7, 1962.

The insured mailed a second check to Surety for $121.42, the amount of the premium, on December 8, which was deposited on December 13.In the meantime, a $15.00 check of a third person, with which the insured had purchased a bank money order, was returned to the South Carolina National Bank for insufficient funds and was charged to the insured's account on December 12.As a result, the account was insufficient to pay the premium check when it was presented on December 13.The insured, having received notice of the $15.00 charge to his account, made a deposit on December 14, which restored the account to an amount sufficient to cover the premium check.A sufficient balance for this purpose was retained in the account for the remainder of the year.

The dishonored premium check was included with mail opened by a controller of Surety on Monday morning, December 17.He had the policy file brought to him, and, after examining it, turned it over to the claims department.The check was retained by the company.

On December 18, the insured received from the South Carolina National Bank a charge slip which, for the first time, put him on notice that the check which he had mailed to Surety on December 8 had been dishonored.He immediately called Surety and was put in touch with a representative in the claims department.He told this representative that the money to cover the check was in the bank and requested that the check be redeposited.He also talked to the agent from whom he had purchased the policy and offered to give him another check, which was declined.

This action for declaratory judgment was commenced by Surety on December 20, 1962.Upon the trial of the case, motions for the direction of a verdict were made by both parties and refused.The trial judge found no merit in Surety's motion for judgment notwithstanding the verdict and expressed the view that he'would have...