Wiles v. Mullinax, 36

• Decision Date: 11 July 1969
• Docket Number: No. 36,36
• Citation: 275 N.C. 473,168 S.E.2d 366
• Court: North Carolina Supreme Court
• Parties: Bernadine WILES, d/b/a Centerview Taxi v. Ralph P. MULLINAX, Jr., and Millinax Insurance Agency, Inc.

Page 366

168 S.E.2d 366

275 N.C. 473

Bernadine WILES, d/b/a Centerview Taxi v. Ralph P. MULLINAX, Jr., and Millinax Insurance Agency, Inc.

No. 36.

Supreme Court of North Carolina.

July 11, 1969.

Williams, Willeford & Boger, Concord, for plaintiff appellant.

Hartsell, Hartsell & Mills, by William L. Mills, Jr., K. Michael Koontz, Concord, and Boyd C. Campbell, Jr., for defendant appellees.

LAKE, Justice.

Upon the first appeal in this matter, reported in 267 N.C. 392, 148 S.E.2d 229, we held that, when an insurance agent or broker undertakes to procure a policy of insurance for another and is unable to do so, it is his duty to give timely notice of such failure to his customer and, if he fails to do so, he is liable for the damage which his customer suffers as the result of such lack of insurance. Upon the second appeal, reported in 270 N.C. 661, 155 S.E.2d 246, we held that the defendants, having introduced evidence from which the jury could have found that there was in effect, at the time of the accident, a valid contract of workmen's compensation insurance procured for the plaintiff by the defendants, the defendants were entitled to argue this contention to the jury and were entitled to have the jury instructed upon the principles of law applicable thereto. Obviously, if the defendants procured for the plaintiff the insurance coverage they undertook to procure and that coverage was in effect at the time of the event against which the plaintiff was to be insured, the defendants are not liable to the plaintiff in this action.

At the trial now under review, the parties stipulated that the defendants undertook to procure workmen's compensation insurance coverage for the plaintiff as alleged in the complaint. The amount of damages recoverable, if any, was also stipulated. The defendants have never contended that they notified the plaintiff of any failure by them to procure the insurance coverage they undertook to procure. Their contention throughout has been that they did procure such coverage and hence there was no occasion to give any such notice to the plaintiff. Both the plaintiff and the individual defendant testified that no such notice was given to the plaintiff.

Thus, the sole question for the jury at the trial now under review was whether, at the time of the accident, there was in effect workmen's compensation insurance coverage procured by the defendants for the plaintiff.

The defendants contend that there was then in effect such coverage by reason of an alleged binder issued by them as agent for Royal Indemnity Company and also by reason of an alleged binder issued by them as agent for Dixie Fire and Casualty Company. The alleged binders are the same documents which were before us upon the second appeal, except that in the present record there is an additional document (defendants' Exhibit E) which the defendants now contend was a part of the alleged binder issued by them as agent for Royal Indemnity Company.

Upon the second appeal we held that the alleged Royal Indemnity Company binder, in the form then before us (defendants' present Exhibit D) was not a binder affording insurance coverage to the plaintiff at the time of the accident for the reason that, by its terms, it covered a different period of time. We also held upon the second appeal that the alleged binder for Dixie Fire and Casualty Company (defendants' present Exhibit G) was sufficient in form and content to constitute a valid binder. As we there said, the construction of these documents and their legal effect were questions for the court, not for the jury. Strigas v. Insurance Co., 236 N.C. 734, 73 S.E.2d 788; Atkinson v. Atkinson, 225 Nc.,. 120, 33 S.E.2d 666. Our determinations of these questions upon the second appeal are conclusive. Horton v. Redevelopment Commission, 266 N.C. 725, 147 S.E.2d 241; Glenn v. Raleigh, 248 N.C. 378, 103 S.E.2d 482.

Upon the retrial following our decision on the second appeal, the defendants introduced in evidence a new document, their present Exhibit E. The individual defendant testified at the retrial that Exhibit E is a copy of a sheet originally attached to and part of Exhibit D (the document before us on the second appeal) but which had become detached therefrom and lost. Exhibit E, of itself, is not sufficient to constitute a binder though the word 'Binder' is written upon it. It cannot be determined from this paper alone what insurance coverage was contemplated. It is addressed to Royal Indemnity Company from the corporate defendant. It states that it is with reference to the plaintiff and further states, 'The above mentioned policy expires 11/8/58. Please renew this policy for us.' The policy to be 'renewed' is not identified on Exhibit E. No other material information appears upon it.

The individual defendant testified on retrial that Exhibit D is 'a copy of the front page of the last insurance policy that was issued' (i.e., a policy issued by another company for which the defendants were then agents) and, with the original of Exhibit E attached thereto, was sent by him to Royal Indemnity Company prior to the accident in which the plaintiff's employee was killed. That is, the individual defendant testified on retrial that Exhibit D set forth the terms of the former policy, which was to expire 8 November 1958, and Exhibit E showed a binder had been issued by the defendants for a replacement policy, with like terms, to be issued by Royal, effective upon the expiration of the old policy.

Two sheets, attached together as parts of a single communication, must of course, be construed as one document. See: Stein v. Outdoor Advertising, 273 N.C. 77, 159 S.E.2d 351; Robbins v. Trading Post, 253 N.C. 474, 117 S.E.2d 438. So construing Exhibits D and E, we hold that these documents were, in form and content, sufficient to constitute a binder for Royal Indemnity Company covering the period of time in which the accident occurred. The difficulty with reference to the period to be covered by the policy to be issued by Royal, noted in our opinion on the second appeal, is removed by Exhibit E if the testimony of the individual defendant with reference to that document is accepted as true.

The credibility of the testimony of the individual defendant to the effect that he did issue Exhibits D and E, or either of them, and that he did issue Exhibit G on the account of Dixie Fire and Casualty Company and of the evidence of his authority from the insurance company in question to issue any such document is for the jury to determine. In view of the above mentioned stipulations and the testimony of the individual defendant that no notice of failure to obtain the desired insurance was given the plaintiff, there was no other question for the jury to determine at the third trial. Rural Plumbing and Heating, Inc. v. Construction Co., 268 N.C. 23, 149 S.E.2d 625.

Here, as in the trial reviewed by us upon the second appeal, there was no contention, and no evidence to show, that any binder issued by the defendants, as agent either for Royal Indemnity Company or for Dixie Fire and Casualty Company, was cancelled by such company in the manner prescribed for such cancellation by G.S. 97--99(a) and Moore v. Electric Co., 264 N.C. 667, 142 S.E.2d 659. Thus, if the defendants had authority from either insurance company to issue a binder for it in this instance and if the defendant did issue the alleged documents for such company (Exhibit D plus Exhibit E as to Royal Indemnity Company; Exhibit G as to Dixie Fire and Casualty Company), the defendants would not be liable to the plaintiff in this action for the reason that, in such event, the defendants procured for the plaintiff the insurance they undertook to procure. If neither insurance company was so bound, the defendants would be liable in the amount stipulated, for the evidence of both parties is that no notice of any failure to procure such insurance was given to the plaintiff.

We observe with interest that at none of the three trials of this action has the jury been favored by either litigant with testimony of any official of either insurance company concerning the authority of the defendants to bind it in this instance. The testimony of the individual defendant as to the extent of his authority, and that of the corporate defendant, so to bind either or both of the two insurance companies was, of course, competent upon that question though not conclusive. Sealy v. Insurance Co., 253 N.C. 774, 117 S.E.2d 744.

Plaintiff's Exhibit 13 was also competent upon that question with reference to Dixie Fire and Casualty Company. This is an application form issued by that company for use by its agents and acknowledged by the individual defendant to have been in the office of the defendants at the time the alleged binder was issued. This form contained the following:

'6a. Has any policy been cancelled or has any other Insurance Company refused to write a new policy or as a renewal in the past two years? If so, give date, reason and name of such Insurance Company. (NOTE: if so, do not bind the risk.)' (Emphasis added.)

The binder alleged to have been issued on behalf of Dixie Fire and Casualty Company could not constitute a defense in this action unless, at the time of the accident resulting in the death of the plaintiff's employee, it constituted a valid contract of insurance between Dixie Fire and Casualty Company and the plaintiff. It did not constitute such contract unless the defendants had actual authority from Dixie Fire and Casualty Company to issue the binder on its behalf. We are not here concerned with apparent authority of the defendants to bind the Dixie Fire and Casualty Company since all of the evidence is to the effect that the plaintiff, at the time in question, knew nothing whatever of the alleged agency of the defendants for that company and did not even know the alleged binder had been issued. Under such circumstances, a limitation upon the...