Opinion
No. 4429.
Argued October 4, 1955.
Decided October 24, 1955.
While a general exception to findings and rulings presents no question of the sufficiency of the evidence to sustain them and entitles the excepting party only to a review of questions of law apparent upon the face of such findings and rulings as were made, the Supreme Court may under its discretionary practice consider whether the findings and rulings were warranted.
Where a policy of motor vehicle liability insurance contained no provisions concerning the terms upon which the policy would be reinstated after cancellation for nonpayment of premium the evidence warranted a finding that the reinstatement of a policy cancelled prior to an accident in which the insured was involved, effective on a date subsequent thereto, was not a full restoration of the original policy and afforded no coverage in the interim.
In the absence of evidence to establish a duty on the part of a liability insurance agent to notify the insurer that its insured under a cancelled policy was subsequently involved in an accident the insurer was not chargeable with the agent's knowledge of the accident where the agent did not undertake to act for the insured in procuring reinstatement of the policy.
To establish waiver, on the part of an insurer, of forfeiture of a policy of liability insurance for nonpayment of premium by a reinstatement of the policy after an accident has occurred actual knowledge of the accident by the insurer is required.
PETITION, for a declaratory judgment to determine the rights and obligations of the parties under a policy of motor vehicle liability insurance issued by the plaintiff to the defendant Culver at Concord. The defendant Larochelle is plaintiff in a tort action against Culver arising out of an accident which occurred on August 29, 1953.
There was evidence of the following facts: The insurance policy in question was issued for a policy period of one year, commencing May 21, 1953. The premium was payable in four installments, the first of which was paid when application was made, and the second of which fell due on June 21, 1953. Following default in payment of the second installment, the plaintiff's Newark, New Jersey, office on August 5, 1953, mailed to the defendant Culver, pursuant to provisions of the policy, a notice of cancellation effective August 17, 1953. The notice was addressed to the insured at a Concord address furnished by him in the application for the policy. However he had moved to a new street address, and the notice was returned to the plaintiff marked "unknown." A copy of the notice was received by the issuing agent in Concord.
During "the first part of September," the insured called upon the issuing agent in Concord and tendered him $27.50 in payment of the unpaid balance of the premium. The agent informed the insured that the policy had been cancelled, and inquired whether he had been involved in an accident, and learned from him that he had. The agent refused to accept the premium. According to the testimony of the insured, he then procured a bank money order for $27.50 dated September 11, 1953, and forwarded the same to the Newark office of the plaintiff. The money order was there received in an envelope apparently postmarked September 1, 1953. The cancelled money order, which was received in evidence, showed payment by the issuing bank in Concord on September 18.
There was testimony that on September 15 the State Motor Vehicle Department mailed to the "home office" of the plaintiff a notice of the accident of August 29, which called for a reply with respect to coverage. The policy of insurance issued to the defendant Culver showed the company's home office to be at Chicago, Illinois. Denial of coverage was received by the Motor Vehicle Department on October 15, 1953, bearing a notation that it was delayed for checking with the New England branch office. This office was in Hartford, Connecticut.
On September 22, 1953, the. Newark office mailed to the insured "notice of reinstatement" addressed to him at his former address. This was returned to the sender undelivered, and was remailed to the insured on September 30, in another envelope addressed to the correct address. As received by the insured, the notice provided for reinstatement effective September 2, 1953. It showed that at some time an effective date of August 18 had been crossed out, and that of September 2 inserted below. Under separate cover, the Newark office also mailed to the insured on September 30 a check for $1.42 "in payment of return premium." This check was uncashed at the time of the trial.
Trial by the Court (Griffith, J.). The Court found that the policy was effectively cancelled as of August 17, 1953, and further found "the reinstatement of the policy originally made by the Company after receipt of a check, subsequent to the accident, to a date prior to the accident, was made without knowledge of the accident, which information was purposely withheld from the Company by the defendant Culver." It ruled "that such reinstatement was invalid and that the Company was not estopped from changing the date of the reinstatement when [it] learned of the accident."
The defendant Larochelle (hereinafter referred to as the defendant) excepted to the findings and rulings. These exceptions were transferred by the Presiding Justice. Other facts are stated in the opinion.
Devine Millimet (Mr. Shane Devine orally), for the plaintiff.
Perkins Dowst for the defendant Culver, furnished no brief.
Stanley Stanley (Mr. John W. Stanley, Jr. orally), for the defendant Larochelle.
The defendant's general exception to the findings and rulings of the Trial Court presents no question of the sufficiency of the evidence to sustain them (Sandown v. Kelley, 97 N.H. 418; McPhee v. Colburn, 98 N.H. 406) and entitles him only to review of questions of law apparent upon the face of the findings and rulings filed. Eastman v. Waisman, 94 N.H. 253, 254. However, we proceed to consideration of the arguments advanced by the defendant before us, as permitted by our discretionary practice in non-jury cases such as this. Eastman v. Waisman, supra; Wilson v. Goodnow, 98 N.H. 110.
No issue is presented concerning the validity of the plaintiff's action in cancelling the insurance as of August 17, 1953, in accordance with the terms of the contract, even though the written notice of cancellation was not received by the defendant. See Gendron v. Insurance Company, 47 N.M. 348; Appleman, Insurance Law and Practice, s. 5015; anno. 149 A.L.R. 1316.
It is urged however that "no evidence of intent not to reinstate the old contract was considered or offered" and that any reinstatement of the policy must be regarded as revival or restoration of the original policy, rather than the creation of a new contract for a different term. See 29 Am.Jur. 252, s. 267. The argument disregards the fact that the policy imposed no obligation to reinstate the insurance upon any terms; and that the plaintiff's consent as communicated to the insured was only to reinstatement effective on September 2, which was after the accident. The notice of reinstatement was evidence from which the Court could find that full restoration of the original policy was not intended. The findings were further supported by evidence that the plaintiff's standard procedure in reinstating a policy cancelled for nonpayment of premium was to do so as of the day following the date postmarked on the envelope containing payment.
The defendant argues that the Court erred in finding that the reinstatement as of August 18 "was made without knowledge of the accident" because the plaintiff's local agent had notice of the accident before the insured mailed the premium to the Newark office, and that notice to this agent was notice to the plaintiff. Ostroff v. Hustis, 80 N.H. 141, 143. The evidence however did not require application of this general principle. The agent who received the notice, of the accident was aware that the policy had been previously cancelled, and refused to accept the premium. There was no evidence concerning his authority or his duty in these circumstances. See 2 Pomeroy, Equity Jurisprudence (5th ed.), s. 668. He did not undertake to act for the plaintiff. Notice of an accident which had occurred after termination of the policy was not so material to the subject matter of the agency as shown by the evidence, as to require as a matter of law that the agent communicate it to the plaintiff. No reason for the agent to anticipate that the premium would be tendered to some other representative of the insurer was shown. Under the circumstances, the plaintiff could be affected by the agent's knowledge only if a duty to communicate it were established. Restatement, Agency, ss. 275, 278, comment a. 2 Pomeroy, supra, s. 673. The evidence failed to establish such a duty, and the plaintiff was not chargeable with the agent's knowledge. Clark v. Marshall, 62 N.H. 498, 500; Dearborn v. Fuller, 79 N.H. 217; Great American Ind. Co. v. Richard, 90 N.H. 148, 151.
The notice of reinstatement first mailed from the Newark office on September 22 bore the date of September 21. There was no proof that the notice of the accident sent to the home office of the plaintiff by the Motor Vehicle Department was received before either date. Waiver of forfeiture of the policy for nonpayment of the premium required knowledge which was actual rather than constructive. Therrien v. Maryland Cas. Co., 97 N.H. 180, 182. See Commercial Casualty Co. v. Mansfield, 98 N.H. 120, 128. The Court found that information concerning the accident was "purposely withheld" by the insured, and the finding that the first reinstatement was made without knowledge of the accident was warranted. Indeed had the first notice remained unaltered, the plaintiff might well have shown a case for avoidance of the reinstatement. Continental Casualty Co. v. Lanzisero, 119 N. J. E. 166. See Leclerc v. Insurance Co., 93 N.H. 234, 237.
The defendant has presented no other substantial issue by brief or argument, and neither party has briefed or argued any exceptions to evidentiary rulings. It follows that the order is
Judgment for the plaintiff.
All concurred.