Wright v. Grain Dealers Nat. Mut. Fire Ins. Co.

• Decision Date: 28 December 1950
• Docket Number: No. 6160.,6160.
• Citation: 186 F.2d 956
• Parties: WRIGHT v. GRAIN DEALERS NAT. MUT. FIRE INS. CO.
• Court: U.S. Court of Appeals — Fourth Circuit

186 F.2d 956 (1950)

WRIGHT v. GRAIN DEALERS NAT. MUT. FIRE INS. CO.

No. 6160.

United States Court of Appeals Fourth Circuit.

Argued November 15, 1950.

Decided December 28, 1950.

Arthur W. Woltz, Newport News, Va., and George Cochran Doub, Baltimore, Md. (Charles H. Gordon, Hampton, Va., Jones, Blechman & Woltz, Newport News, Va., and Marshall, Carey, Doub & Mundy, Baltimore, Md., on brief), for appellant.

E. L. Ryan, Jr., Norfolk, Va. (White, Ryan & Holland, Norfolk, Va., on brief) for appellee.

Before PARKER, Chief Judge, and SOPER, Circuit Judge, and CHESNUT, District Judge.

SOPER, Circuit Judge.

This suit was brought by Wilson Henry Wright, a citizen of Virginia, against Grain Dealers National Mutual Fire Insurance Company, a corporation of Indiana, to recover damages in the sum of $3,010 to an automobile trailer truck which was wrecked in an accident on May 23, 1949 and was covered by a collision, fire and theft policy issued to the plaintiff by the Insurance Company. The case was tried to a jury upon a single issue — whether the policy had been canceled by the Insurance Company on January 5, 1949 prior to the accident. At the conclusion of the evidence the defendant made a motion for a directed verdict and the judge reserved decision and submitted the case to the jury which found a verdict for the plaintiff for $3,010. Thereafter the defendant moved that the verdict be set aside and that judgment be entered in its favor, and after further consideration, this motion was granted and the plaintiff appealed.

The policy contained the following provision:

"Cancelation. 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. Premium 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."

Evidence on behalf of the policy holder established the issuance of the policy and the loss, and indicated that he had not canceled the policy and had not received notice of cancelation from the company. Evidence on behalf of the company indicated that notice of cancelation was mailed to the plaintiff by the issuing agency more than four months before the loss occurred. In passing upon the motion for judgment n. o. v. the District Judge said: "The evidence of mailing the notice of cancelation by the defendant in accordance with the terms of the policy is direct and without contradiction. There is no denial that such notice was mailed and the oral testimony showing such mailing is corroborated by the Post Office receipt. While the plaintiff contends that the lack of evidence of receipt of the notice raises a presumption that it was not mailed, it is my view that under the terms of the policy contract failure to receive the notice has no bearing on the case since it was specifically agreed that the mailing should constitute proof of notice. To hold otherwise would, in effect, be undertaking to change the terms of the contract to provide that a notice must be received rather than mailed."

In our view, this construction of the cancelation provisions of the policy was correct and the judgment of the defendant must be sustained since the evidence was such as to leave no reasonable doubt that the notice of cancelation was actually mailed.¹

The insured was engaged in the long-haul trucking business and in the Open Air Market business at 1925 Kecoughton Road, Hampton Virginia. Next to Open Air Market the insured also conducted a restaurant. There were four places of business at this address and other persons, as well as himself, received mail at his market. Usually the carrier left the mail at the market if it was open; otherwise he would slip it under the door.

Beginning in 1940 the policy holder had a general running account with A. M. Deal, an insurance agent who did business under the name of Mutual Underwriters and represented the defendant and other insurance companies. From time to time the policy holder purchased from Deal policies covering fire, theft and collision insurance and also public liability and personal damage insurance on his trailer-truck. He also carried fire insurance on certain buildings in Newport News. His account was charged with premiums on policies issued, and credited with payments on account and with dividends. On June 12, 1948 he purchased a fire, theft and collision policy on his trailer-truck in suit and the premium was charged to his account which then showed a debit balance of $379.20. On September 12, 1948 he purchased a public liability property damage policy thereon, as required by the state law, and his account then showed a debit balance. Thereafter until the end of the year a number of unsuccessful efforts were made by the insurance agency to collect this balance. At Christmas time 1948, the truck business was slow and Wright was not doing any contract hauling. According to the testimony of Charles B. Spencer, an employee of the insurance agent, Wright directed him to cancel both policies since he intended to sell the truck, and it was understood that the unearned premiums would be applied to Wright's account. Unless both policies were canceled the amount of unearned premiums returnable to Wright would have been insufficient to square his account. On the other hand Wright testified that he decided to give up public hauling and to confine the use of the truck to his personal business and therefore directed Spencer to cause the public liability policy, which in accordance with the statute was on file with the State Corporation Commission at Richmond, to be canceled; but he did not direct the cancelation of the policy in suit and desired to retain it for the protection of the vehicle while it was on his lot. Both policies were in fact canceled at the instance of the company and when this was done the unearned premiums exceeded the insurance by $4.20, and this credit was increased by a dividend of $15.21 to the sum of $19.41. Wright received notice from the State Corporation Commission that the public liability policy had been canceled. He retained the other policy in his possession and the small balance in his running account was retained by the agency until after the present controversy arose.

The uncontradicted evidence of the mailing of the notice of the cancelation of the fire, theft and collision policy, to which the judge referred in his opinion, included testimony of employees and records of the agency, and also a certificate of mailing from the United States Post Office at Newport News. Spencer testified that after his conversation with Wright at Christmas he gave orders to employees of the agency to issue a cancelation notice in triplicate in accordance with the usual procedure for non-payment of premiums, the original notice to be mailed to the insured, a copy to be mailed to the company, and a copy to be retained by the agency; and he produced from the company's files a carbon copy of a cancelation notice on a printed form bearing date January 4, 1949 addressed to Wright's Open Air Market, in which name the policy was written, at the correct address, to the effect that the policy would be canceled at midnight, January 10, 1949. The notice contained the printed signature of the defendant company by A. M. Deal, agent, in typewriting. At the bottom of the notice was a printed form of certificate to be filled out on behalf of the agency to the effect that the signer had personally mailed the notice of cancelation and had received from the United States the receipt thereto attached. The signature "Mutual Underwriters by" was annexed in typewriting but the signature of the person who made the certificate was omitted. Pasted to the copy of the notice was a post office receipt, with a canceled 1¢ stamp affixed, which acknowledged that on January 5, 1949 the Post Office at Newport News had received from Mutual Underwriters one piece of ordinary mail addressed to Wright's Open Air Market at the correct address. On the back of the copy of the notice were stamped the words "Received January 8, 1949 Grain Dealers National Fire Ins. Co. Indianapolis 7, Ind.", indicating that the copy of the notice of cancelation was mailed to and received at the home office of the company on January 8, three days after the original was mailed to the insured.

Mrs....