Fireman's Fund Insurance v. Jackson

MITCHELL, Judge. This action was tried by the trial court without a jury, and its findings of fact previously set forth herein were fully supported by competent evidence. Therefore, they are conclusive and will not be disturbed upon appeal. 12 Strong, N.C. Index 3d, Trial, § 58.3, p. 493. The plaintiff assigns as error the conclusion of the trial court that the policy of automobile liability insurance in question was not canceled prior to 10 April 1975 by the means specified therein. In support of this assignment the plaintiff contends that the trial court erred in treating the method of cancellation employed by the defendant as notice of cancellation rather than cancellation by surrender of the policy. We find the plaintiff’s assignment and contention meritorious. The policy by its terms specifically provides for cancellation “by surrender thereof to the company or any of its authorized agents or by mailing written notice to the company stating when thereafter the cancellation shall be effective.” Assuming arguendo that the policy in question became binding when the plaintiff mailed it together with a premium statement to the defendant, we think the facts found by the trial court compel the conclusion that cancellation was effected by surrender of the policy to the plaintiff on 8 April 1975. [354] During the conversation between Mrs. Proctor and Mrs. McDonald on that date, the defendant instructed Mrs. Proctor to effect cancellation of the policy. In her initial attempt to do so, Mrs. Proctor attempted to add, apparently of her own volition, the condition that the policy be canceled “as it came due.” She was then, however, advised by Mrs. McDonald that cancellation should be effected by surrender of the policy. Mrs. Proctor so advised the defendant. He then advised her that he did not have the policy with him and authorized Mrs. Proctor to have his name signed by the Agency to a Lost Policy Cancellation Release form at that time. Mrs. Proctor conveyed this instruction, and the form was signed for the defendant pursuant to his instruction. On the same day it was mailed by the Agency to the home office of the plaintiff. Therefore, the findings of fact by the trial court reveal that, whatever the intent of Mrs. Proctor in her initial attempt to cancel the defendant’s policy “as it came due,” the only mutual agreement of the parties, as communicated through the agents, was that the Lost Policy Cancellation Release be signed for the defendant on 8 April 1975. As a general rule, when a liability insurance policy contains a provision allowing a cancellation at the request of the insured, the surrender of the policy with a request that it be terminated operates ipso facto as a cancellation. Hayes v. Indemnity Co., 274 N.C. 73, 161 S.E. 2d 552 (1968); 43 Am. Jur. 2d, Insurance, § 423, p. 469. Additionally, the Lost Policy Cancellation Release signed for the defendant by mutual agreement of the parties specifically provided that: “[S]aid policy having béen lost or mislaid, it is hereby agreed that said policy is hereby canceled and terminated as of 12 o’clock noon on the date hereof at the place where the property described in the said policy is located, and it is hereby agreed that no claim whatever will be made for any loss under said policy, and if found to return said policy to this Company forthwith and without further compensation.” The defendant’s signature was affixed to the form containing this agreement at his request and was, therefore, effective and had the same validity as though written by him. Barrett v. Fayetteville, 248 N.C. 436, 103 S.E. 2d 500 (1958). It is apparent from the findings of fact of the trial court and from the contents of the form itself, that the Lost Policy Cancellation Release was intended by the parties to constitute an act in [355] lieu of the surrender of the actual policy. Thus, it was their mutual intent and agreement that the policy be canceled by its surrender and that the signing of the form constitute and be treated as such a surrender. As the signed form was mailed directly to the plaintiff Company on 8 April 1975, the surrender and cancellation were effective on that date. Hayes v. Indemnity Co., 274 N.C. 73, 161 S.E. 2d 552 (1968). The defendant contends that, as the policy makes no specific provision for the use of a form, such as that employed in the present case, in lieu of surrender of the actual policy, the use of the form by the parties did not constitute surrender and must be treated as a written notice of cancellation rather than as cancellation by surrender. We do not find this argument persuasive, as the findings of fact by the trial court clearly indicate the parties mutually consented to cancellation by use of the form in lieu of actual surrender of the policy and not as a written notice of cancellation. The parties were free to mutually consent to this method of cancellation. See Waters v. Annuity Co., 144 N.C. 663, 57 S.E. 437 (1907). The defendant also calls our attention to the fact that at the bottom of the release form and beneath the signatures of the defendant and the agent of the plaintiff, the phrase “Cancel flat effective 3-30-75” is typewritten. The defendant contends that this fact together with testimony by Mrs. McDonald indicates ambiguity as to whether the release form was intended to effect cancellation of the policy on 8 April 1975 or on its original effective date of 30 March 1975. The defendant further contends that this ambiguity prevented effective cancellation of the policy. We do not agree. The typed notation referred to is on the bottom half of the form, which was introduced into evidence, and comes after its terms and the signatures of the defendant and the agent of the plaintiff. The notation is further separated from the signatures of the defendant and the agent of the plaintiff and from the terms of their agreement by a heavy line dividing the page from left to right. It appears, therefore, that the typed notation was merely an interoffice notation from one agent of the plaintiff Company to another and was not a part of the mutual agreement of the parties. [356] In any event, we do not think the defendant can be heard to complain if the plaintiff has now elected not to collect a premium for the period of insurance coverage from 30 March 1975 until 8 April 1975. Our holding that the policy was not canceled until 8 April 1975 renders the plaintiff’s refusal to accept premiums for prior periods favorable to the defendant who received insurance coverage during those periods. The plaintiff has brought forward and argued numerous other assignments of error. Our holding, however, makes it unnecessary for us to consider them. For the reasons previously set forth herein, we find the trial court erred in its conclusions that the methods of cancellation provided by the terms of the policy were exclusive and were not complied with and that the time of cancellation was so equivocal as to be ineffective. The judgment of the trial court must be reversed and the cause remanded to the Superior Court of Wake County to the end that a judgment in favor of the plaintiff and consistent with this opinion may be entered. The judgment of the trial court is therefore Reversed and the cause remanded. Judges Parker and Hedrick concur.