Woodard v. Calvert Fire Ins. Co.

• Decision Date: 04 May 1951
• Citation: Woodard v. Calvert Fire Ins. Co., 239 S.W.2d 267 (Ky. 1951)
• Parties: WOODARD v. CALVERT FIRE INS. CO. et al.
• Court: Supreme Court of Kentucky

Page 267

239 S.W.2d 267

WOODARD v. CALVERT FIRE INS. CO. et al.

Court of Appeals of Kentucky.

May 4, 1951.

Wade & Mapother, Louisville, for appellant.

Mahan, Davis & Mahan, Edwin O. Davis, all of Louisville, for appellees.

STEWART, Justice.

Appellant, Johnnie J. Woodard, instituted this action in the Second Division of the Common Pleas Branch of Jefferson Circuit Court to recover from appellee, Calvert Fire Insurance Company, a corporation, on a contract of automobile collision insurance. The facts in this case are undisputed and the issue to be determined is raised entirely by the pleadings. Appellee, Commercial Credit Corporation, was made a party defendant below because it has an unsatisfied lien claim of $1484.90, secured by a recorded conditional sales agreement, against the motor vehicle involved in this litigation.

Appellant's petition alleges, so far as pertinent here, that he purchased the policy sued upon from the Insurance Company on August 31, 1948, by the terms of which the latter agreed to insure Woodard's automobile against all loss or damage by collision or upset for a period of one year from the date thereof for the amount of the actual cash value of the car; that on February 19, 1949, while the policy was in full force and effect, the automobile was involved in an accident and damaged to the extent of $1800; and that he is entitled to recover the amount just mentioned, plus interest at 6% thereon from the date of the wreck.

In its answer, the Insurance Company relied upon its cancellation of the policy as a complete defense to appellant's cause of action, averring that, under date of February 11, 1949, it gave written notice by mail to Woodard at his address contained in the policy that its liability under the policy would cease to be in force at 12:01 A.M. Standard Time on the 19th day of February, 1949. Also, on February 11, 1949, the date the cancellation notice was sent to Woodard, the unearned premium was forwarded to and in the regular course of the mails was received by the Commercial Credit Corporation at Louisville, Kentucky.

Appellant demurred to the affirmative allegations of the Insurance Company's answer. The demurrer was overruled and his petition was dismissed after Woodard refused to plead further. Appellant appeals from the judgment below contending, as a sole ground for reversal, that the policy sued on herein was not cancelled because the Insurance Company failed to return the unearned premium to him as the insured.

To resolve the question that has been raised, we must interpret the policy provisions bearing upon this point. The cancellation clause in the policy reads:

'This policy may be canceled by the insured by surrender thereof or by mailing to the company written notice stating when thereafter such cancelation shall be effective. This policy may be canceled by the company by mailing to the insured at the address shown in this policy written notice stating when not less than five days thereafter such cancelation shall be effective. The mailing of notice as aforesaid shall be sufficient proof of notice and the effective date and hour of cancelation stated in the notice shall become the end of the policy period. Delivery of such written notice either by the insured or by the company shall be equivalent to mailing.

'If the insured cancels, earned premiums shall be computed in accordance with the customary short rate table and procedure. If the company cancels, earned premiums shall be computed pro rata. Premiums adjustment may be made at the time cancelation is effected and, if not then made, shall be made as soon as practicable after cancelation becomes effective. The company's check or the check of its representative mailed or delivered as aforesaid shall be a sufficient tender of any refund of premium due to the insured.'

There is an endorsement on the policy as follows:

'The assured under this Policy is the above named insured and Commercial Credit Company and/or Affiliated Companies and/or Subsidiaries. Loss, if any, to be adjusted with the insured, though to be paid,...