Westmoreland v. General Acc. Fire & Life Assur. Corp.

• Decision Date: 19 February 1957
• Citation: 144 Conn. 265,129 A.2d 623,64 A.L.R.2d 976
• Court: Connecticut Supreme Court
• Parties: , 64 A.L.R.2d 976 Woodrow W. WESTMORELAND v. GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION, Ltd. Supreme Court of Errors of Connecticut

Page 623

129 A.2d 623

144 Conn. 265, 64 A.L.R.2d 976

Woodrow W. WESTMORELAND v. GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION, Ltd.

Supreme Court of Errors of Connecticut.

Feb. 19, 1957.

Valentino D. Clementino, Hartford, for appellant (defendant).

John W. Joy, Hartford, with whom, on the brief, was Abraham A. M. Schweitzer, Hartford, for appellee (plaintiff).

Before INGLIS, C. J., and BALDWIN and O'SULLIVAN, JJ.

INGLIS, Chief Justice.

In this action the plaintiff seeks to recover from the defendant as his insurer under a policy covering damage to his automobile by collision. The question involved is whether the defendant had effectively canceled the policy prior to the date of the collision in which the plaintiff's car was damaged.

The finding made by the trial court is not attacked except as to the conclusions set forth therein. The subordinate facts as found, so far as they are material to the issues on this appeal, are the following: On April 13, 1954, the defendant issued to the plaintiff a policy insuring him against loss by reason of damage to his automobile by collision. The East Hartford Aircraft Federal Credit Union held a chattel mortgage on the car, and the policy was made payable to it also as its interest might appear. The plaintiff's address as set forth in the policy was 14 1/2 Hackmatack Street, Manchester, Connecticut. The policy contained a provision for cancellation by either party. ¹ The plaintiff was employed at Pratt and Whitney Aircraft. A fellow employee was William DeHan, who conducted a part-time insurance brokerage business. DeHan, acting as the plaintiff's agent, obtained the policy from Charles W. Lathrop, the authorized agent of the defendant. DeHan maintained an open running account with Lathrop for premiums. On June 28, 1954, DeHan paid Lathrop the amount charged as premium on the plaintiff's policy. In October, because the plaintiff had not paid DeHan the premium on the policy, DeHan requested Lathrop to procure a cancellation. As a result, on October 11, 1954, the Springfield office of the defendant mailed by registered mail, return receipt requested, an envelope containing a notice that the policy would be canceled on October 20. This notice was addressed to the plaintiff at the address given in the policy. Before that time, however, the plaintiff had moved from Manchester to Canton. He did not receive the notice of cancellation. The envelope was subsequently returned to the defendant's Springfield office marked 'Moved, Left no address.' The defendant mailed a copy of the notice to the credit union. An officer of the credit union, over the telephone, told the plaintiff that the policy was to be canceled but did not give him the effective date of the cancellation. The plaintiff replied that he would get another agent.

On December 30, 1954, the plaintiff's automobile was in a collision and was damaged to the extent of $900. On January 3, 1955, DeHan, not having been apprised that the notice of cancellation of the policy had actually been sent, billed the plaintiff for the full amount of the premium, threatening court action if the bill was not paid promptly. At about the same time, the plaintiff reported the accident to DeHan. DeHan then told the plaintiff that he had requested the cancellation of the policy but had had no notice of it, and he aided the plaintiff in making out a proof of loss. In the early part of January, the plaintiff paid DeHan the amount of the premium. On February 15, 1955, after DeHan's account with Lathrop had been credited in January with the unearned portion of the premium, DeHan tendered his check for that amount to the plaintiff, but the tender was refused.

The court arrived at the following conclusions: The payment of the premium by DeHan to the defendant in June, 1954, operated as payment between the plaintiff and the defendant. Since, however, DeHan was the agent of the plaintiff only for the purpose of procuring the policy, he had no authority on behalf of the plaintiff to order a cancellation of the policy. A credit by Lathrop to DeHan of the amount of the unearned premium was not the tender of the unearned premium to the plaintiff, and the lapse of time between the date of cancellation, October 20, 1954, and the date of the tender by DeHan to the plaintiff, February 15, 1955, was longer than 'as soon as practicable after cancellation becomes effective.' It was incumbent on the defendant upon the return to it of the notice of cancellation to make other reasonable efforts to notify the plaintiff. The collision policy was still in force at the time of the loss.

On the strength of these conclusions the trial court rendered judgment in favor of the plaintiff, and the defendant has appealed. The appeal presents two questions. The first is whether the method of giving notice of cancellation adopted by the defendant satisfied the requirements of the policy. The second is whether the policy required by the payment to the plaintiff of the unearned premium as a condition of the effectiveness of the cancellation.

As to the first question, the trial court apparently rested its decision on the ground that the policy required the defendant to use reasonable diligence to get actual notice of cancellation to the plaintiff. Manifestly, this is an incorrect interpretation of the terms of the policy. Those terms are: 'This policy may be canceled by the company by mailing to the named insured at the address shown in this policy written notice stating when not less than five days thereafter such cancellation shall be effective. The mailing of notice as aforesaid shall be sufficient proof of notice * * *.' It is always competent for parties to contract as to how notice shall be given, unless their contract is in conflict with law or public policy. When they do so contract, the giving of a notice by the method contracted for is sufficient whether it results in actual notice or not. Superior Ins. Co. v. Restituto, D.C., 124 F.Supp. 392, 395; Bradley v. Associates Discount Corporation, Fla., 58 So.2d 857, 858; Sorensen v. Farmers Mutual Hail Ins. Ass'n, 226 Iowa 1316, 1321, 286 N.W. 494, 123 A.L.R. 1000; Boyle v. Inter Ins. Exchange, 335 Ill.App. 386, 389, 82 N.E.2d 179; Trinity Universal Ins. Co. v. Willrich, 13 Wash.2d 263, 273, 124 P.2d 950, 142 A.L.R. 1. In the case at bar the provisions of the policy were complied with by mailing the notice.

In brief and argument on appeal, the plaintiff claims one other irregularity in the giving of the notice of cancellation. That is that the notice was sent by registered mail, return receipt requested. It is true that some cases have held that notice by registered mail with the personal receipt of the addressee required is not such notice as complies with a policy provision for notice by mail. Werner v. Commonwealth Casualty Co., 109 N.J.L. 119, 121, 160 A. 547; Kamille v. Home Fire & Marine Ins. Co., 129 Misc. 536, 538, 221 N.Y.S. 38. Those cases might be distinguished from the present case in that the notice in them was directed to be delivered to the addressee only. That aside, however, we do not agree with the reasoning of those cases. When the provision in a policy is that notice by mail is sufficient, that provision is broad enough to cover all the kinds of mail which are commonly used to convey messages. Registered mail is just as much mail as ordinary mail. The sending of a notice of cancellation by registered mail is compliance with the requirement of the policy that the notice shall be mailed.

We turn now to a consideration of the question whether the cancellation of the policy can be effective without the payment to the insured of the unearned premium. On this question the authorities in other jurisdictions seem to be in disagreement. The divergence of views, however, can in large measure be accounted for on the ground that the policy provisions involved in the various cases differ radically. The better authority is that when the provisions of the policy are like those of the policy now before us, the effectiveness of the cancellation does not depend upon the refund of the unearned premium. The sole effect of the provision requiring the return of a portion of the premium is to create an indebtedness of the insurer to the insured. Scapes v. Orr, 2 Ill.App.2d 363, 367, 119...