Opinion
Page __
__ Cal.App.2d __ 218 P.2d 593 TRUCK INS. CO. v. INDUSTRIAL ACCIDENT COMMISSION et al. Civ. 7754. California Court of Appeals, Third District May 31, 1950.Hearing Granted July 27, 1950.
Subsequent opinion 226 P.2d 583.
Rehearing Denied June 30, 1950.
Mullen & Filippi, W. N. Mullen, San Francisco, for petitioner.
T. Groezinger, San Francisco, for respondents.
PEEK, Justice.
The instant matter comes before this court upon the petition of Truck Insurance Exchange for a writ of review of an award made by the respondent Industrial Accident Commission wherein death benefits were awarded to Anna B. Groon, mother of Raymond Groom, deceased, who the Commission found was employed as a truck driver by Harry P. Sorensen, and while so employed sustained an injury which resulted in his death on November 28, 1948. In addition, the Commission found that decedent's employer was insured by petitioner against the liability imposed by the Workmen's Compensation Act, Labor Code, § 3201 et seq., at the time of the injury, resulting in the death of his employee. It is this finding which petitioner attacks herein, contending that it had cancelled Sorensen's policy of insurance by means of a notice of cancellation mailed to him on November 3, 1948 and that the cancellation provided therein was effective upon its mailing despite the fact that it was not received by him until December 1, 1948, three days after the death of his employee.
From the transcript of the proceedings before the respondent Commission, it appears that for several years prior to the death of his employee Sorensen had been carrying compensation insurance issued by the petitioner. Despite the fact that Sorensen was delinquent in his payments of premiums on his policy which expired on September 25, 1948, the petitioner issued a new policy on November 2, 1948 for the year commencing September 25, 1948 and mailed it to him at Clipper Mills, California, the address given by the insured on the prior policy. On November 3, 1948, the [218 P.2d 594] petitioner mailed a notice of cancellation to Sorensen at Clipper Mills stating that he was delinquent in his payments of premiums due under the prior policy and that unless such payments were received by it prior to November 16, 1948 the policy issued on November 2, 1948 would be cancelled as of November 16, 1948, the effective date of cancellation designated in the notice. Sorensen did not receive either the policy issued on November 2, 1948 or the notice of cancellation of such policy mailed on November 3, 1948 until December 1, 1948 due to the fact that he had moved from Clipper Mills to Marysville and had failed to notify the petitioner of such change of address. Sorensen testified that he depended upon petitioner's agent in Marysville to protect him against any cancellation. From his testimony it appears that in the past petitioner's agent would personally contact him when his policy was in danger of being cancelled and that he left his insurance problems in the hands of petitioner's agent. Mr. Day, an employee of petitioner's agent, testified that although a copy of the cancellation notice had been received at the agent's office in Marysville Sorensen was not contacted in the usual way because the copy of the notice had been inadvertently placed in Sorensen's file without having been called to Day's attention. There is no evidence that petitioner had knowledge of, or acquiesced in, the practice of its agent to personally notify Sorensen of such delinquencies.
The policy issued November 2, 1948 contained the following provision with regard to cancellation: 'This policy may be cancelled at any time by either of the parties upon written notice to the other party stating when, not less than ten days thereafter, cancellation shall be effective. The effective date of such cancellation shall then be the end of the policy period. * * * Notice of cancellation shall be served upon this employer as the law requires, but, if no different requirement, notice mailed to the address of this employer herein given shall be sufficient notice. * * *'
It is petitioner's contention that the policy was cancelled as of the date of mailing of the notice of cancellation in accordance with the foregoing provision contained in the policy whereas respondent contends that no cancellation was effected until the receipt of such notice by the insured.
In Farnum v. Phoenix Insurance Co., 83 Cal. 246, 256, 23 P. 869, 872, 17 Am.St.Rep. 233, the court stated that 'If the notice is sent by mail, and not received, as in this case, the cancellation for non-payment of premium is ineffective.' In that case, a fire insurance policy had been issued to the insured by the agent of the insurer. Such agent was authorized to and did grant the insured sixty days within which to pay the premium. During said sixty day period the insurer mailed a notice of cancellation for nonpayment of premium to the insured which was not received. The court held that the notice of cancellation was ineffective upon the ground that personal notice of intended cancellation was required. Later the Supreme Court in the case of American Building Maintenance Co. v. Indemnity Ins. Co., 214 Cal. 608, at page 615, 7 P.2d 305, 307, following the statement in the Farnum case stated that 'It would seem, however, in view of the fact that if a notice is sent by mail but not received the cancellation is ineffective (Farnum v. Phoenix Ins. Co., 83 Cal. 246, 23 P. 869, 17 Am.St.Rep. 233), that self-interest would prompt an insurance company to make definitely certain the fact that the notice was actually received.' The facts in that case showed that an insurance policy had been issued which the insurer sought to modify by means of a rider which it sent to the broker by messenger but which in fact was not received by the insured. The court held that the policy was not thereby modified because of a lack of consent thereto, treating the rider as an offer to modify which the insured had not accepted. In passing upon the question so presented the court observed that the policy provided for cancellation by mailed notice and in that regard made the foregoing statement.
Both the Farnum and the American Building Maintenance cases were cited and relied upon by this court in support of its [218 P.2d 595] decision in Naify v. Pacific Indemnity Co., Cal.App., 68 P.2d 293, at page 298. However, a hearing was granted by the Supreme Court, and that court stated as follows: 'At the outset we are met with a question raised by amici curiae on behalf of various insurance companies, namely, whether a notice of cancellation, sent to the address of the assured as stated in the policy, and pursuant to a provision in the policy stating that the mailing thereof shall be sufficient notice, is effective despite lack of receipt by the insured. In this simple form, the question may perhaps be answered in the affirmative (see Raiken v. Commercial Cas. Ins. Co., N.J.Sup., 135 A. 479), though it has not yet been directly ruled upon in this jurisdiction. See American Building Maintenance Co. v. Indemnity Ins. Co., 214 Cal. 608, 7 P.2d 305. But the special circumstances of this case make such a doctrine entirely inapplicable.' 11 Cal.2d 5, 10, 76 P.2d 663, 666, 115 A.L.R. 476. In view of the foregoing statement it would appear that although the question involved herein has been discussed in the cited cases the specific question has not been decided by the Supreme Court of this state and hence the instant case presents a question of first impression.
Admittedly, there is a conflict of authority upon such question, see 123 A.L.R. 1008, which in part may be due to the variations in the facts of the decided cases and the particular provisions of the policies or statutes involved. However there is no statute in this state which restricts the manner of giving notice of cancellation under the insurance contract here in issue and we perceive no reason prompted by public policy or otherwise preventing contracts containing such a cancellation clause as here in question. Since the relation of insured and insurer is contractual. Insurance Code, section 22, and since we perceive no prohibition against giving effect to such a contract where it does not conflict with a statutory provision or public policy, it is our conclusion that the mailing of writting notice, in accordance with the provisions of such a clause, is sufficient, whether or not such notice is actually received by the insured. The authorities supporting this view are collected in Trinity Universal Ins. Co. v. Willrich, 13 Wash.2d 263, 124 P.2d 950, 142 A.L.R. 1.
While respondent did not find nor does it now expressly contend that petitioner is estopped to rely upon the notice of cancellation mailed to the insured pursuant to the provision contained in the policy we nevertheless are impelled to consider such question in view of the emphasis placed by respondent upon the evidence that petitioner's agent had in the past given the insured actual notice of his delinquencies in order to prevent cancellation. As we have already observed, there is no evidence in the record before us that petitioner had knowledge of, or acquiesced in, such practice of its agent nor is there any evidence that petitioner had respresented to the insured that its agent would personally notify him of such delinquencies. We are therefore satisfied that under such circumstances no estoppel was raised against the petitioner. 10 Cal.Jur. 626.
The award against defendant Truck Insurance Exchange is annulled and the cause is remanded with instructions to the Commission to enter an award against the defendant Harry P. Sorensen.
ADAMS, P. J., and SPARKS, Justice, pro tem., concur.