EXCHANGE INSURANCE ASSN. v. MATHEWS

On October 1, 1952, the Exchange Insurance Association issued a liability-insurance policy effective September 30, 1952, to Fred B. Wade. His wife Lois (Loyce) Gilbert Wade was named as an "insured" by an amendment issued on the same date that the policy was issued. Some weeks later, but prior to November 14, 1952, Fred B. Wade and his wife Lois Gilbert Wade separated and by agreement she kept the automobile covered by the insurance policy. On November 14, 1952, she traded automobiles and went to the office of McKenney Insurance Agency, the agency through which the original insurance policy was issued, and requested that the coverage of the liability-insurance policy be changed to the automobile traded for. A collision policy was issued through another company and Marchman McKenney, at that time the sole proprietor of the McKenney Insurance Agency, told his secretary to pull the copy of the policy here in question and that he would tell her what to do with it later. He did not tell her what to do with it that day and was killed the following day (November 15, 1952) in an automobile collision. On the night of December 31, 1952, or at about 2 o'clock a. m. on January 1, 1953, Lois Gilbert Wade, while driving her automobile, was involved in a wreck in which Cloie Mathews was injured. On the day of the wreck Lois Gilbert Wade reported it to the office of the insurance agency through which the policy was issued, and a written report was made on a form provided by an insurance company not involved in this action. At the time the wreck was reported, no record of the policy covering liability could be found and a liability policy was purchased by her and issued through another company. It was later discovered that the new policy was issued effective January 1, 1953, at 12:01 a. m. which was prior to the time of the wreck, and the policy was amended so as to become effective after the wreck had occurred. Walter Huckabee, who was working in the McKenney Insurance Agency office January 1, 1953, and later purchased the McKenney Insurance Agency on January 20, 1953, from the widow of Marchman McKenney, wrote Kurt Hitke Company, Inc., general agent of Exchange Insurance Association of Atlanta, Georgia, on February 4, 1953, informing them of the wreck and that the automobile covered by the policy originally issued had been traded on November 14, 1952, for the automobile being driven at the time of the wreck, advised that the amendment had not been issued because of the death of Marchman McKenney, and requested that an amendment be issued to cover the automobile traded for and that such amendment be effective retroactive to November 14, 1952. On receipt of this letter the amendment was issued. This was after information of the wreck had been received by the general agent of the Exchange Insurance Association, Kurt Hitke Company, Inc. On April 14, 1953, a claims adjuster acting for the Exchange Insurance Association went to Thomaston to investigate the wreck, and upon receiving a signed statement from Fred B. Wade, the husband of Lois Gilbert Wade, that he had given the automobile covered by the original policy to his wife when they separated, advised W. E. Huckabee that there was no coverage under the policy to cover the injuries received by Cloie Mathews in the wreck which occurred on January 1, 1953. In August, 1953, Cloie Mathews entered suit against Mrs. Lois Gilbert Wade, and, upon being served, the defendant forwarded the service copy of the suit to the claims adjuster who had investigated the wreck for the Exchange Insurance Association. He, in turn, acting as the claims adjuster for the Exchange Insurance Association, returned these papers to the defendant before the time to answer the suit had expired, and advised in his letter of transmittal that no coverage existed under the insurance policy. The defendant then made a trip from Thomaston to Atlanta to inquire as to why there was no coverage under the policy, but did not file an answer to the action because of the lack of necessary funds with which to employ counsel. A verdict and judgment was entered for the plaintiff in the sum of $21,902.25. The plaintiff, acting through her attorney, began garnishment proceedings in the Superior Court of Fulton County in which the Exchange Insurance Association was served as garnishee. The garnishee filed its answer denying that it was indebted to the defendant in any amount. This answer was traversed by the plaintiff and the issue to be tried was made. The trial judge, by agreement of the parties, heard the case without the intervention of a jury and rendered a judgment for the plaintiff in the sum of $5,000 (the face amount of the liability-insurance policy issued by the garnishee). The garnishee filed its bill of exceptions in which it assigned error on the admission and rejection of certain evidence; and on the findings of fact, opinion, and judgment of the trial court as being contrary to law, contrary to the evidence and without evidence to support it.

NICHOLS, J.

The assignments of error in the bill of exceptions which relate to the findings of fact, opinion, and judgment of the trial court amount to nothing more than the general grounds of a motion for new trial, and will be considered as such.

1. The first question for consideration is whether or not the policy of insurance was in effect at the time of the wreck. From the undisputed evidence it is readily apparent that after more than a month had passed from the date of the wreck the insurance company issued an amendment to the liability policy changing the coverage from the automobile originally "covered" to the automobile being driven by the defendant at the time of the wreck. This amendment, although dated February 5, 1953, expressly provided that it was effective from November 14, 1952, which was prior to the date of the wreck. At the time this amendment was issued the garnishee had knowledge of the fact that there had been a wreck in which the defendant was involved, and although at the time this information was received by the garnishee there is no evidence that all the information concerning the wreck was in its possession it was certainly put on notice that there might be a claim arising against the insured as a result of the wreck, and when it issued the amendment retroactive to November 14, 1952, it must be said that it had notice certainly sufficient to put it on inquiry as to everything which it later discovered. Code § 37-116.

2. The question is raised as to whether or not the "insured" had an insurable interest in the event. The original policy, although issued primarily to Fred B. Wade, showed, by amendment that wherever the word "insured" was used in the policy it also included "Mrs. Lois Gilbert Wade", and the evidence is undisputed that she had an insurable interest in the event. Therefore, there is no merit in this contention of the garnishee.

3. The garnishee contends that there was no evidence that the "insured" complied with the provisions of the policy with respect to the report of the accident as required by the policy. Under the ruling in the first division of this opinion the insurance company was chargeable with having full knowledge of the wreck at the time that it issued the amendment to the policy. The policy provided that the report of the accident would be given as soon as practicable. Certainly, by issuing the amendment retroactive to a date prior to the wreck, the company, in view of the information in its hands at that time, was bound to have considered that the "insured" acted reasonably in reporting the accident to it, or is at least bound to have waived the full report of the accident as required by the policy. Accordingly, this contention of the garnishee is without merit.

4. In further support of its contention that the judgment was contrary to the evidence the garnishee argues that the defendant was bound under Code § 20-1410 to lessen the damages as far as was practicable by the use of ordinary care and diligence, and that where, as here, a law suit for many thousands of dollars is filed against a person, ordinary care requires that the person so sued should defend it, and by the defendant's failure to defend the suit she was not exercising ordinary care. The question here presented is ordinarily a question for the jury, or in the present case a question for the trial judge, he hearing the case without the intervention of a jury. The opinion of the trial judge is supported by evidence that the defendant exercised ordinary care and diligence, and there was evidence as to why the defendant did not defend the suit against her. Therefore, this contention of the garnishee is without merit.

5. In view of what has been said in the preceding divisions of this opinion the trial court did not err in refusing to admit into evidence testimony as to how the wreck occurred.

6. Assuming but not deciding that the trial court erred in admitting into evidence a report of the accident made on the day of the wreck, this alone would not require a reversal of the judgment of the trial court in view of his ruling that the judgment which he rendered would be the same whether this report was in evidence or not and since there was other evidence on which his judgment was based.

7. The question raised as to whether or not the evidence supported a finding that the McKenney Insurance Agency was an agent or broker of the garnishee after the death of Marchman McKenney need not be decided in view of the rulings in the previous divisions of this opinion.

Judgment affirmed. Felton, C. J., and Quillian, J., concur.