Summary
In Verecchia v. De Siato, 353 Pa. 292, 45 A.2d 8 (1946), the same question was raised and the evidence is strikingly similar to that in the instant case.
Summary of this case from Mackiw v. Pa. T. F. Mut. Cas. Ins. Co.Opinion
November 27, 1933.
January 7, 1946.
Insurance — Automobile liability — Cancellation — Notice — Evidence — Testimony of clerk — Mailing — Question of fact.
1. In a proceeding to establish insurer's liability on an automobile liability insurance policy which provides that it may be cancelled by the insurer by mailing written notice to the insured and that the mailing of such notice shall be sufficient proof of notice and the insurance shall end at the time of cancellation stated in the notice, the burden is on the insurer to prove that the policy was cancelled by it. [295-6]
2. In such case, where the insurer presents the oral testimony of a clerk that a cancellation notice was duly prepared and the notice deposited in the mail in due course of office procedure, supported by a postage receipt for the letter, but the insured denies having received the cancellation notice, the question whether the notice was duly given is one of fact to be determined by the jury. [295-6]
Before MAXEY, C. J., DREW, LINN, STERN, PATTERSON, STEARNE and JONES, JJ.
Appeal, No. 132, Jan. T., 1945, from order of C. P. No. 5, Phila. Co., March T., 1941, No. 2599, in case of Michael Verecchia v. Frank De Siato et al. Order affirmed.
Attachment execution proceeding.
The facts are stated in the opinion, by LEWIS, J., of the court below, as follows:
The plaintiff, having recovered a verdict against the defendant, Frank DeSiato, for $4,040 and entered judgment thereon, issued an execution against the garnishee insurance company. Interrogatories were filed in due course, and the garnishee's answer set up that the defendant's policy of liability insurance had been cancelled upon due notice, and that the insurance company had refused to defend the action in tort against the defendant because of that cancellation. The answers further set up that the garnishee had, on February 24, 1941, mailed to the defendant a five-day advance notice of cancellation, and under date of March 4, 1941, had given to defendant by letter final notice of cancellation, which became effective on March 17, 1941, at 12:01 A. M. Eastern Standard Time, defendant not having in the meantime made payment in full of a premium of $23.40 claimed by the company to be overdue. The injury for which the verdict was obtained and judgment entered occurred on March 25, 1941.
The issue joined between the plaintiff and the garnishee came on for trial before us, and we erred in concluding that the evidence exhibited no dispute of fact to be left to the jury and in giving binding instructions for the garnishee. Subsequently, upon motion and argument, we made absolute the rule for a new trial.
The garnishee insurance company had the undoubted right to cancel its policy upon due notice. Paragraph 18 of the policy, relating to cancellation, contains this provision as to the company's right to cancel and the method of procedure:
"This policy may be canceled by the company by mailing written notice to the named insured at the address shown in this policy 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 insurance under this policy shall end on the effective date and hour of cancellation stated in the notice. Delivery of such written notice either by the named insured or by the company shall be equivalent to mailing."
The company's contention at the trial was that the cancellation notice was duly prepared, the covering envelope was properly addressed, postage was affixed and the notice deposited in the United States mail in the due course of office procedure. This contention was presented by the oral evidence of a clerk, who also identified a postage receipt as having been given by the local post office for the notice, although, of course, this receipt referred only to an envelope and not to its contents. The insured denied having received the cancellation notice. Plaintiff's right to recover from the garnishee therefore depended upon whether the policy had been, in fact, "cancelled" by the notice alleged to have been sent.
There was also evidence that at the time of the alleged cancellation — which was for non-payment of premium — the company had in its hands a sum of money to which the insured was entitled as a "refund of premium." The insurance carrier did not credit this sum on the installment of premium overdue, nor did the carrier enclose a check for the same with the cancellation notice. In Paragraph 18 of the policy above referred to, there is this provision as to refund of premiums by the company upon cancellation by it:
"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 named insured."
The insurance contract was known as a comprehensive combination automobile policy and was to be effective from November 24, 1940 to November 24, 1941 at 12:01 A. M. Standard Time in Philadelphia. The premium totaled $46.48, and the garnishee's answers set up that on November 24, 1940 the insured defendant had agreed with the company to pay fifty percent of this premium within thirty days and "the balance within ninety days from November 24, 1940." The defendant paid $23.40 on account of the premium on January 6, 1941, which payment it will be seen was tardy by some thirteen days. The garnishee set up in its answer to the second interrogatory that this "payment did not procure insurance coverage for any particular period of time but was only a payment on account under the aforesaid arrangement." The defendant insured had made no further payments of premium at the time of cancellation, being therefore, in default to the extent of fifty percent of the premium or $23.40.
The answer to the eighth interrogatory set up that there accrued to the insured by reason of the cancellation of the policy a "return premium" of $8.91 and a "dividend" of $2.90, and that the garnishee mailed a draft for the total sum of $11.81 to the insured by ordinary mail, receipted for by the United States Post Office, this having been done on April 12, 1941. The company averred further in the answers that the amount of this "refund" (which is the term used in this portion of the garnishee's answers) was computed on or about April 12, 1941 and was determined by computing the difference between the total premium due of $46.80 and certain credits, including the cash paid on account, $23.40, "return premium, $32.31" and "dividend, $2.90" or total credits of $58.61. We are not given any additional information as to why the so-called return premium was so substantial, and it may be that it covered some part of a return premium for an earlier period of insurance. However, the policy obliged the company only to make the refund of premium as soon as practicable after cancellation had become effective. It was undisputed that the company still held this money at the time the cancellation notice was said to have been mailed, and there was some testimony that under such circumstances the practice of the company was not to send out a cancellation notice for non-payment of premium, the policy holder having what amounted to a credit balance.
On the state of the record thus indicated, we concluded that it was for the jury to pass upon the evidence as to whether the notice of cancellation had in fact been duly sent. The clerk's oral testimony was circumstantially strongly supported by a "document" — the postal receipt; but this did not withdraw the question of notice from the circle of dispute or controversy. The insurer had the burden of proving the policy had been terminated, and whether the notice had been duly given remained an issue of fact despite the circumstance that the undoubted weight of the evidence inclined toward the insurance company. In other words, the credibility of the clerk's testimony with reference to the notice and the mailing of it was for the jury. See: Osche v. New York Life Insurance Company, 324 Pa. 1; Zenner v. Goetz, 324 Pa. 432; MacDonald v. P. R. R., 348 Pa. 558.
Hence we granted the new trial.
Garnishee appealed.
Joseph W. Henderson, with him Rawle Henderson and L. Stanley Mauger, for appellant.
Milford J. Meyer, with him Robert M. Bernstein, for appellee.
Argued November 27, 1945.
The order granting a new trial is affirmed on the opinion of Judge LEWIS of the court below.