Opinion
32863.
DECIDED FEBRUARY 24, 1950.
Complaint on automobile policy; from Carroll Superior Court — Judge Boykin. October 4, 1949.
O. W. Roberts Jr., for plaintiff in error.
Boykin Boykin, contra.
1. The grant of a nonsuit is error where it appears that the plaintiff proved his case as laid, unless the evidence of the plaintiff itself disproves his right to recover by establishing the existence of other undisputed defensive facts showing that he is not entitled to recover.
( a) Where a policy of automobile insurance has been consummated by payment of the premium and issuance of the policy, possession thereof by the agent of the company to be unconditionally delivered by him to the insured is, in law, tantamount to delivery. Such retention of the policy by the agent does not amount to its surrender to the company for cancellation by the insured, the latter having no notice of the intention of the company to cancel the policy.
( b) Where a policy of insurance provides that it may be canceled by either party by the mailing of notice as prescribed therein, the burden of proof is on the party seeking to cancel it to show the giving of such notice.
( c) The right to cancel a policy of insurance can be exercised only because it is reserved in the policy and can be exercised only as therein provided. Where, therefore, as here, it appears that an agent of an insurance company acts also for an agent of the insured in procuring insurance, but is without power to keep the property insured, notice of cancellation as provided in the policy that must be given the insured is insufficient when given only to such agent.
2. A statement by an agent of an insurance company to the insured during the time which the latter is allowed under the terms of the policy to furnish proof of loss, to the effect that the company has declined to pay the loss, amounts to a waiver of the filing of proof of loss.
DECIDED FEBRUARY 24, 1950.
G. W. Gilley brought suit against Glens Falls Insurance Company in the Superior Court of Carroll County on a policy of insurance issued by the latter on a Ford automobile belonging to the plaintiff. It appears from the evidence introduced by the plaintiff that he had procured a policy of insurance on his Ford automobile issued by the defendant Glens Falls Insurance Company through it authorized agent, Smith Price; that this policy expired on March 25, 1947; that at that time the plaintiff obtained a loan of $651.28 on the automobile from Lincoln Discount Corporation of Atlanta through Smith Price acting as broker for the finance company and at the same time renewed his insurance policy to extend through March 25, 1948. The yearly premium for the renewal of the insurance policy was by agreement paid in by deducting the same from the funds advanced by Lincoln Discount Corporation and turned over to Smith Price who, as agent for the defendant, had authority to receive the same.
The renewal policy gave the name and address of the insured as Grady W. Gilley, Waco, Georgia, Route 2. The following provisions thereof are pertinent to a consideration of this case:
"12. Named Insured's Duties When Loss Occurs. When loss occurs, the named insured shall: . . (b) give notice thereof as soon as practicable to the company or any of its authorized agents and also, in the event of theft, larceny, robbery or pilferage, to the police, but shall not, except at his own cost, offer to pay any reward for recovery of the automobile; (c) file proof of loss with the company within 60 days after the occurrence of loss, unless such time is extended in writing by the company, in the form of a sworn statement of the named insured, setting forth the interest of the named insured and of all others in the property affected, any encumbrance thereon, and the actual cash value thereof at the time of loss, the amount, place, time and cause of such loss, the amount of rental or other expense for which reimbursement is provided under this policy, together with original receipts therefor, and the description and amounts of all other insurance covering such property. . .
"22. Cancellation. This policy may be canceled by the named insured by surrender thereof or by mailing to the company written notice stating when thereafter such cancellation shall be effective. This policy may be canceled by the company by mailing to the named insured at the address shown on 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 and the effective date of cancellation stated in the notice shall become the end of the policy period. Delivery of such written notice either by the named insured or by the company shall be equivalent to mailing."
At the same time the plaintiff executed a promissory note for $651.28 payable in monthly instalments to Lincoln Discount Corporation, securing the same with a bill of sale to secure debt, which latter contained the following provision.
"I agree to keep said automobile insured against loss by fire, theft, confiscation, conversion, and collision, with an insurance company acceptable to the Company or assigns for not less than the amount owing hereunder until full payment has been made, payable to and to protect the interests of the Company or assigns, and the Company or assigns may effect, continue and renew said insurance for me at my expense if the Company or assigns so elects and the costs of such insurance is to be paid promptly by me. I hereby irrevocably authorize the company or assigns as my attorney in fact, to so effect, continue and renew such insurance, and in connection with any insurance maintained on said property, to prove losses, adjust and collect claims, receive and endorse drafts or other documents issued in payment of claims, whether in my name or otherwise, and to cancel any insurance from time to time and collect unearned premiums thereon, and in general to supervise and manage such insurance, and to apply proceeds collected from such insurance or cancellation thereof against my balance or other charges due or owing hereunder."
On June 17, 1947, the assured collided with another automobile, totally wrecking the property in question. On June 18 he went to the office of Smith Price and reported the loss to the employee there, and the following Saturday also informed Mr. Price personally at a ball game, and was informed that the policy had been canceled. The plaintiff also testified that he went back to the office the following Monday and asked if there were not some papers for him to fill out, to which Price replied there were not, that the policy had been canceled and it would be a hard matter for him to do anything.
As to the delivery of the policy, the plaintiff testified as follows: "He did not deliver the policy to me that day. He said whenever it was issued it had to be backed up, sent by mail to the home office and back to him. I told him that would be all right." He also testified that, after the wreck, "I asked him where the policy was, why it was he hadn't sent it to me. He said it had been canceled and had been sent back to the insurance company."
Smith Price, examined as an adverse party, testified concerning the policy: "When we write a policy there are 3 copies made, one is kept by me, one sent to the insurance company's office and the original goes to the man that loans the money. The man who loans the money gets the original. If he requires it, the insurer receives a certificate and the lending institution gets the original policy.
"Q. You mean you furnish the loan company a copy of the policy?"
"A. They won't accept it because it can be canceled.
And, on the question of adjusting the loss:
"Q. At the request of Mr. Gilley did you write the Glens Falls Indemnity Company to see if they would adjust the loss?
"A. I told him I had no coverage. I did not represent him.
And, on the question of the return of the premium:
"I returned the premium I collected for this policy that was issued by me on March 25, 1947, to the Lincoln Discount Corporation either in May or June or August 15th. They owed me some money. I imagine it was 1947 or 1948.
"Did you get that check?
"A. Not that I know of. It was written two or three months before it was cashed. They owed me some money and I wanted to be sure it was paid before I balanced the account."
W. M. Amerine, officer of the defendant insurance company, testified in part as follows:
"It is a renewal, sure it is . . Mr. Smith Price issued the policy at his office in Carrollton and then mailed to me what is known as the daily report and thereafter I requested him to return the policy to me for the purpose of flat cancellation unacceptable to us. We gave the assured no notice whatsoever that I expected to cancel the policy. We are not required. It is not required to comply with Item Number 22 as set out in the body of the policy entitled `Cancellation.' It is not necessary where the assured voluntarily surrenders the policy. I could not answer who voluntarily surrendered the policy to me. Mr. Price sent the policy back to me, but I assume the assured did. Notice of cancellation is not required when the policy is returned."
On the question of delivery of notice of cancellation, the agent Price further testified that on June 27 he wrote T. W. Parker, an officer of Lincoln Discount Corporation, in response to a telephone call from the latter reporting the loss, which letter contained in the body thereof a copy of a letter dated May 15, 1947, advising the Lincoln Discount Company that none of his companies would insure the automobile in question and asking what disposition should be made of the premium. T. W. Parker testified positively that he had never received such a letter. He also stated: "I didn't have the information there was no coverage on the car until Smith Price called me. When Mr. Gilley reported it, I thought there was coverage on the car, and I referred him to Mr. Price because he did write the policy covering the car and I had paid to Mr. Smith Price the premium to write the policy. It was after Mr. Gilley had reported the loss to me that Mr. Smith Price then reported to me that he had no coverage."
On the question of agency, Price testified: "I was agent for Lincoln Discount Corporation for making the loan. I was broker for the insurance company and received the application. As agent, I had no authority to waive any claim or conditions of the policy. . My duties in taking the applications were to get information subject to their approval. I signed that policy. I signed the daily report to my company. I had authority to issue policies of insurance subject to their approval. In this particular case I issued a policy to Grady W. Gilley about March 25, 1947. I received a commission on that premium."
At the conclusion of the evidence the defendant moved for a nonsuit, which motion was granted, and this judgment is assigned as error.
The testimony of the witness Amerine established that the policy had actually been issued. This being so, the burden was upon the defendant to show that it had been canceled in accordance with its terms, and the plaintiff could withstand a motion for nonsuit on this ground unless he disproved his right to recover by establishing the existence of other undisputed defensive facts showing that he was not entitled to recover because the policy had actually been so canceled. See Clark v. Bandy, 196 Ga. 546, 559 ( 27 S.E.2d 17). The court has no discretion in the matter of granting a nonsuit and, if there be any evidence whatever to sustain the action, it must go to the jury. Gresham v. Stewart, 31 Ga. App. 25 ( 119 S.E. 445). In passing on such a motion, the evidence should be construed in favor of the plaintiff. National Land Coal Co. v. Zugar, 171 Ga. 228 (2) ( 155 S.E. 7). The defendant appears to rely upon three theories in his contention that the evidence, so construed, affirmatively shows a cancellation of the contract of insurance:
(a) The defendant contends that it was not necessary to give notice of cancellation because the policy itself had been surrendered to the company. There is no evidence that either the plaintiff, the named insured, or the Lincoln Discount Company in his behalf, ever committed any act that could be considered a surrender of the policy. The plaintiff testified in substance that the agent merely said, in reply to his inquiry, that the policy would not be backed up and returned from the home office for about 30 days. Actual manual delivery of the policy is not essential to the validity of the contract unless made so expressly by its terms. See Code (Ann.) §§ 56-901, 56-911, and cases cited thereunder. While these provisions of our Code deal with fire and life insurance respectively, they follow the general rule that in the absence of a stipulation in the contract to the contrary, actual delivery may be dispensed with where the policy has been issued and the premium paid. See 29 Am. Jur. Title, Insurance, § 147. The fact that the policy had been temporarily retained by the agent of the defendant for purposes of backing and record, would not relieve the company of its duty under Condition 22 of the policy to give notice to the insured.
(b) The defendant also contends that under the irrevocable power of attorney contained in the bill of sale to secure debt, the Lincoln Discount Company had authority to accept cancellation of the policy. However, the witness Parker testified that his company received no notice of cancellation until after the date of the collision. Price never testified positively that the letter dated May 15, 1947 to Lincoln Discount Corporation was ever mailed. His testimony related rather to a letter written after the collision and making reference to an earlier letter. There is, therefore, no evidence that notice was given, as required by the cancellation clause of the contract, and there was positive evidence that none was received by the finance company, either as agent for the plaintiff or otherwise.
(c) The third contention is that the notice of cancellation to Smith Price was sufficient. This is not meritorious unless Price was the agent of either the plaintiff or the finance company with authority to receive such notice. The evidence here depicts Smith Price as a man operating a general insurance agency representing several insurance companies. The Lincoln Discount Corporation is engaged in lending money. The two enter into a contract whereby Price will effect loans for the finance company and then insure the property upon which the loans are made through his insurance companies in order to protect the Lincoln Discount Corporation from loss. Parker testified in this connection, "We had an agreement with Mr. Price that he loan money for the Lincoln Discount Corporation through his office, giving him the right to place all insurance that we required and that he was able to place on any loan that he made. That was his revenue, plus 2% of the amount of the loan paid as a revenue for handling the contracts as a brokerage fee." (Emphasis supplied.) In National Union Fire Ins. Co. v. Macon Hardwood Lumber Co., 24 Ga. App. 726 ( 102 S.E. 180), it was held that whether or not a broker is such an agent of the insured as will give him authority to accept notice of cancellation depends upon whether he had been authorized merely to procure insurance for the owner, in which event notice to him would be insufficient, or whether he was a continuing agent with power to keep the property insured and to select the insurer, in which case the notice would be effective. While Price apparently had the right to select an insurer from among the companies he represented, his agency, under the plaintiff's testimony, extended only to the placing of insurance. It follows that, insofar as the placing of loans is concerned, Price was the agent of Lincoln Discount Corporation, but insofar as the insurance is concerned, he was the agent of the defendant, and he would have no more authority to cancel the insurance of the Lincoln Discount Corporation without notifying it then he would have in connection with any other customer. The right to cancel a policy of insurance can be exercised only because it is reserved in the policy, and can be exercised only as therein provided. Farmers Mutual Fire Ins. Co. v. Harris, 50 Ga. App. 75, 81 ( 177 S.E. 65). Assuming, but not deciding, that the insurance company could rely on the power of attorney in the contract between the plaintiff and the finance company, rather than on the unambiguous provisions of its own policy (especially as to that sum in excess of the debt due the finance company, and in which it had no interest) it does not appear that the finance company ever delegated to Smith Price any authority which would permit the latter to cancel insurance contracts without notice to it.
2. The plaintiff further excepts to the ruling out of certain conversations between Price and Gilley relative to the accident. The court held, regarding these conversations, "I let stay in that he notified Mr. Price he sustained a loss. All the other I rule out." If the court intended thereby to rule out the testimony of the plaintiff to the effect that he had requested papers to fill out, to which the agent replied that there were none, the policy had been canceled, such a ruling would be erroneous, as this testimony is relevant on the question of whether the plaintiff complied with § 12 of the policy relative to his duties when loss occurs. In Phenix Insurance Co. v. Searles, 100 Ga. 97 (4) (27 S. 779), it was held: "A statement made by such an agent to the insured, within the time during which the latter, under the terms of the policy, was allowed to furnish proofs of loss, that the company declined or refused to pay the loss, will amount to a waiver of such proofs." Since the defendant insurance company, through its agent Price, declined to pay the loss on the ground that the policy had been previously canceled, such refusal amounted to a waiver of the requirement in the policy relating to proof of loss. Further, it must be remembered that the plaintiff had never seen the policy and therefore had no possible way of knowing, unless informed by Price, what his duties were in this regard.
The trial court erred in granting the motion for a nonsuit because there was evidence making it a question of fact for the jury as to whether the policy sued upon had in fact been canceled previous to the date of the collision.
Judgment reversed. MacIntyre, P. J., and Gardner, J., concur.