Case Name: Employers Mutual Casualty Company v. Nosser
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1964-05-25
Citations: 250 Miss. 542
Docket Number: No. 43044
Parties: Employers Mutual Casualty Company v. Nosser
Judges: All Justices concur except Lee, C. J., ancl Kyle and Rodgers, J. J., who dissent.
Reporter: Mississippi Reports
Volume: 250
Pages: 542–597

Head Matter:
Employers Mutual Casualty Company v. Nosser
No. 43044
May 25, 1964
164 So. 2d 426
Davidson & Beach, Satterfield, Shell, Williams & Buford, Jackson; William F. Riley, Natchez, for appellant.
Joseph E. Brown, Jr., Fred G. Berger, Natchez, for appellee.
O. B. Triplett, Jr., Forest, Amicus Curiae.

Opinion:
Brady, Tom P., J.
This is an appeal by the Employers Mutual Casualty Company, appellant, from an adverse decree rendered by the Chancery Court of Adams County, Mississippi, on the 20th day of August, 1962, which awarded to the appellee, Joseph J. Nosser, the sum of $2,394.62, with legal interest at the rate of six per cent per annum from the date of the decree, together with all costs. The record discloses the following pertinent facts. The appellant, Employers Mutual Casualty Company, is an Iowa insurance corporation, qualified to do business in the State of Mississippi, through a general agency, the Southern Underwriters, Inc., and through local agencies appointed by the Southern Underwriters, Inc. A policy of insurance, number 9797929, was issued through the Guido-Foley Agency in Natchez, Mississippi, to the appellee. The policy was issued on November 14, 1961, covering a period extending to November 14, 1962. The Guido-Foley Agency was the predecessor of the Butts-Doughty Insurance Agency, which is involved in the case at bar. No question is made as to the authority of either of these agencies to issue the policy or the subsequent endorsement thereon, which was actually made by the Butts-Doughty Insurance Agency on the 28th day of February, 1962. This endorsement added comprehensive and collision coverages not included in the original policy. The original policy was issued to cover collision loss and personal injury received only by the appellee in the operation of his automobile and it had the customary fifty dollar deductible provision clause therein.
One Miss Elizabeth Calloway, an employee of the Southern Underwriters, Inc. of Jackson, Mississippi, who resided in Jackson, Mississippi, testified that (1) on March 15, 1962, she mailed to the appellee a notice of cancellation.advising appellee that the aforesaid policy of appellant was canceled effective as of 12:01 A. M. on March 25, 1962. The Southern Underwriters, Inc. is a well known automobile underwriter, and Miss Calloway has been in their employment for some thirteen years, and the record reflects it was her duty to check the dailies that came in, to issue policies, to issue notices of cancellation, to check cancellations and endorsements. She testified that she sent this notice of cancellation in response to a request from the home office to cancel policy 9797929 issued on November 14, 1961 by the appellant to appellee Joseph Nosser of 13 Brentwood Lane, Natchez, Mississippi. The endorsement to the policy, which added comprehensive and collision coverage, also added a loss payee, which was the Service Motor Company, Natchez, Mississippi. On April 4, 1962, the appellee, while operating the insured automobile, became involved in an accident in Natchez, Mississippi. The appellee immediately contacted the Butts-Doughty Insurance Agency to report the accident, and was notified that his policy had been canceled prior to April 4, 1962. Appellee employed an attorney who, on or about April 5, 1962, addressed a letter to the appellant at its home office in Des Moines, Iowa, and to the Butts-Doughty Insurance Agency in Natchez, Mississippi, advising both addresses of the accident in which the appellee had been involved on April 4th, and called upon the appellant and its aforesaid agent to pay any claims which might arise from said accident. On April 13th appellant's branch claim superintendent, J. B. Garretty, advised Mr. Burger that the appellant's policy number 9797929 had been canceled prior to April 4, 1962, and thereafter declined to afford to Mr. Joseph Nosser any coverage whatsoever for the accident which occurred on said date because the policy was no long*er in effect on that date.
The appellee was subsequently sued in the County Court of Adams County, Mississippi by J. O. Bearden, who obtained a judgment against the appellee in the sum of $748.48, plus costs. The attorney who represented the appellee claims a fee of five hundred dollars. The appellee testified that the actual cost of repairs to his automobile, being the one insured under the appellant's aforesaid policy, was the sum of $846.14, but he also testified that the cost of repairs, including depreciation, was approximately $1,146.14. The appellee thereafter filed his suit against the appellant in the Chancery Court of Adams County, Mississippi, and in his bill of complaint appellee prayed for a judgment against appellant in the total sum of $2,394.62. Appellant answered the aforesaid suit in the chancery court, asserting as his chief defense that said policy had been canceled effective March 25, 1962, which date was prior to the date of the alleged accident relied upon by the complainant. The appellee contended further that it owed the complainant nothing.
At the conclusion of the trial the learned chancellor dictated into the record an opinion and finding* of fact which in substance held that no written notice of the cancellation had been mailed to the appellee by the appellant, the same was never deposited in the United States Post Office in Jackson, Mississippi with postage fully prepaid, and the same was never received by the complainant herein. The court went further and found superfluously that local agent Butts-Doughty Insurance Agency of Natchez, Mississippi never advised the appellee that his policy was canceled; that there was an amendment or rider to said policy issued shortly before the alleged cancellation; that the appellee was entitled to a refund of some $87 even if the appellant had can celed said policy of insurance as is claimed. The chancellor categorically held as a fact the appellant did not mail notice of cancellation and it never made a refund to appellee and that it is estopped from asserting its special plea in bar which set up the cancellation of the policy. A judgment was entered therein, awarding unto the appellee the full amount sued for in its bill of complaint of $2,394.62, with interest at six per cent per annum from August 20, 1962, and all costs incurred therein.
The appellant urges in its assignment of errors two, namely, (1) the lower court committed manifest and reversible error in finding and adjudicating that the insurance policy in question had not been canceled, and (2) the lower court erred in awarding the sum of $1,-146.14 to the appellant for physical damage (including depreciation) to his own automobile.
The primary question here is whether or not the appellant accomplished the cancellation of the appellee's policy on March 25, 1962, at 12:01 A. M. in accordance with the terms and provisions of the policy of insurance. We must carefully consider that portion of the policy which relates to the cancellation, which is paragraph 16 and which section is as follows:
"16. Cancellation This policy may be canceled by the insured named in Item 1 of the declarations by surrender thereof to the company or any of its authorized agents or by mailing to the company written notice stating* when thereafter the cancellation shall be effective. This policy may be cancelled by the compaivy by mailing to the insured named in Item 1 of the declarations at the address shown in this policy written notice stating when not less than ten days thereafter such caivcellation shall be effective. The mailing of notice as aforesaid shall be sufficient proof of notice. The time of surrender or the effective date and hour of cancellation stated in the notice shall become the end of the policy period . Premium adjustment may be made either at the time cancellation is effected or as soon as practicable after cancellation becomes effective, but payment or tender of unearned premium is not a condition of cancellation." (Emphasis supplied).
It is obvious that the above "standard form" of policy cancellation conditions and wording expressly permit (1) the appellant to cancel the appellee's policy by mailing notice to the appellee stating when not less than ten days thereafter such cancellation shall be effective; (2) that the mailing of notice shall be sufficient proof of notice; (3) that non-receipt of the notice by the appellee is not involved and did not affect the validity of the cancellation; and (4) that the failure of appellant to return the unearned premium was not a condition of cancellation.
Miss Calloway, the appellant's Mississippi general agency underwriter, unequivocally testified that she mailed the notice of cancellation as required in Section 16 of the policy; that this was done on March 15th; that the appellee was notified that on March 25th, at 12:01, the policy would be canceled. Copy of the notice of cancellation which she prepared was introduced in evidence. The original was sent to the appellee. A post office receipt number 3817 was likewise introduced, which Miss Calloway testified she obtained from the postmaster in Jackson, Mississippi, as proof of the fact that the letter to the appellee had been mailed. She testified that the postmaster stamped the envelope and tore the certificate off and handed it back to her, and "threw", or placed, "the letter into his mailing box." Miss Calloway's testimony was corroborated by these exhibits which were introduced thereto. The record fails to disclose any positive testimony contradicting or denying that the cancellation of this policy was mailed as aforesaid. The appellee himself did not testify that the notice of cancellation was not mailed; lie merely testified that he did not receive the notice.
The findings of the chancellor are of the utmost importance and therefore we quote from the pertinent parts thereof:
The court found as a fact that no Avritten notice of cancellation Avas mailed to the appellee, Joseph J. Nosser, on March 15, 1962; it found as a fact that same was never deposited in the United States Post Office at Jackson, Mississippi, with postage fully prepaid; and further found that the same was never received by the appellee herein; that the local agent, Butts-Doughty Insurance Agency, Natchez, Mississippi, never advised the appellee that his policy was canceled; that the appellee was entitled to a refund of some $87 even if the appellant had canceled said insurance policy as it claims but Avhich the court found as a fact that it did not mail the notice of cancellation; that the appellant has never made a refund to appellee, though appellee was entitled to approximately $87 refund of his $110.21 premium paid; that by continuing and wilfully refusing to refund the premium due to appellant, appellee insurance company is estopped from, presenting its special plea in bar (cancellation of the insurance policy) ; and the court further found as a fact that said cancellation of notice was in fact never mailed. The decree then granted the appellee a judgment against appellant in the sum of $2,394.62, Avith legal interest at the rate of six per cent per annum from date.
It is apparent that we are called upon to construe the cancellation clause of the policy in question. At the outset, it can be stated with certainty that the cancellation clause is "standard", it is not ambiguous and is expressed in plain and certain language, which anyone of ordinary intelligence can understand. We have repeatedly held that if an insurance contract is in plain and unambiguous language it should be construed as written, just like any other contract. Griffin v. Maryland Casualty Co., 213 Miss. 624, 57 So. 2d 486; Mississippi Mut. Ins. Co. v. Ingram & Land, 34 Miss. 215; Continental Casualty Co. v. Hall, 118 Miss. 871, 80 So. 335. In Farmers Mutual Insurance Assn. v. Martin, 226 Miss. 515, 84 So. 2d 688, we pointed out again that the rule as set forth in Griffin v. Maryland Casualty Co., supra, was important, which is to the effect that a plain, unambiguous insurance contract should be construed as written and just like any other contract. This rule has been restated repeatedly in substantially the same language. National Bankers Life Insurance Co. v. Cabler, 229 Miss. 118, 90 So. 2d 201.
Therefore, it is apparent that the appellant here was authorized by the insurance contract to cancel the same "by mailing to the insured" (the appellee) "named in Item 1 of the declarations at the address shown in this policy written notice stating when not less than ten days thereafter such cancellation shall be effective." It is obvious that "the mailing of notice as aforesaid shall be sufficient proof of notice". This is stated verbatim as found in paragraph numbered 16 pertaining to cancellation. Insofar as. the question of ambiguity is concerned, the cancellation clause has been substantially held to be unambiguous. Jensen v. Traders & General Ins. Co., 52 Calif. 2d 786, 345 P. 2d 1; Aetna Casualty and Surety Co. v. Simpson (1961), Fla., 128 So. 2d 420; and Service Fire Ins. Co. of N. Y. v. Markey, Fla., 83 So. 2d 855; and the other authorities cited therein.
It is apparent therefore that the cancellation of the appellee's insurance policy could, by the clear and unambiguous provisions of the cancellation clause, be canceled by the appellant by mailing to the insured notice stating when such cancellation would be effective in accordance with the provisions of the cancellation clause shown above. The decree of the chancellor in the court below found that the cancellation notice was never received by the appellee here and apparently the chancellor felt that since receipt of the notice of cancellation was denied by appellee that this was important and had bearing upon the question of whether or not the notice of cancellation was mailed to the appellee by depositing it in the United States mail in Jackson, Mississippi. If this be true, then the lower court required of the appellant more than is called for in the cancellation notice. There was no burden upon the appellant to obtain a return registered receipt of acceptance, which is a departure from the conditions of the cancellation section; all that was required of the appellant was to mail the notice, as aforesaid, and "the mailing of notice as aforesaid shall be sufficient proof of notice."
This case is a first impression in this jurisdiction and no decision has been found which can properly be considered as controlling. We must therefore resort to the relevant decisions of the courts of our sister states in order to reach a proper decision in the case at bar. At the outset, appellee's brief admits that the majority of the courts hold that "cancellation may be effected by mailing of a notice of cancellation in the manner stipulated in the policy"; and, in addition, appellee states that it realizes and concedes that "barring insurance to the contrary, an insurance company may validly contract for the cancellation of one of its policies by placing the notice of cancellation in the mail" properly addressed to the insured. This frank statement by the appellee has ample authorities to prove it to be correct. However, appellee then asserts that it was a question of fact as to whether the notice was mailed, and urges several integral parts of the evidence to support a finding of fact that the cancellation was not mailed, the predominant one being (a) failure of appellee Nosser to receive a notice; the first time he learned of it was when he reported his accident. Other bits of evidence urged in support of this contention are as follows: (b) alleged inability of Miss Calloway to remember the names of people to whom she had sent notices of policy cancellations; (c) failure of appellee to receive a refund for the unearned premium; (d) appellee's increased coverage through .appellant on February 28, 1962, and notice of cancellation was allegedly mailed on March 15, 1962; (e) the endorsement provided for the addition of a loss payee clause, the loss payee not being notified of the cancellation.
It is only appellee Nosser's claim (a) that he did not receive the notice, which merits any consideration in determining whether the notice of cancellation was mailed, and the policy was thereby terminated.
There is simply no evidence in the record to support the finding that notice was not mailed to Nosser. The testimony of Miss Calloway is undisputed, and there is also the documentary evidence of the Post Office Department's "Certificate of Mailing", and the notice of cancellation properly sworn to before the Chancery Clerk of Adams County, residence of the appellee, addressed to Nosser at his correct address in Natchez. There is absolutely no basis for the trial court's finding that notice of cancellation was not mailed to Nosser.
The appellee contends, however, that since Nosser claims he did not receive the notice it can he inferred, or that since Nosser says he did not receive the notice there is a presumption, contrary to the majority rule, that the cancellation notice was not mailed and a question of fact is thus presented.
The appellee cites no case authorities to support his contentions, and there are no Mississippi cases, hut nevertheless this important question merits a careful consideration of any pertinent authorities of any jurisdiction which are illuminating and merit affirmation.'
Before undertaking this somewhat complex analysis, we find that appellee's claim (b) that Miss Calloway's inability to recall the names of other persons whose policies were canceled in no way negatives or impugns her certain assurances that she definitely recalls writing and mailing the cancellation to the appellee, for the reason that his cancellation had been held up, pending the settlement of a claim in which he was involved, and for this reason his cancellation was distinguished and set apart from the others, and remembered by her. The failure of the appellee (c) to receive a refund of the unearned premium has not the slightest bearing upon whether the notice was mailed, and moreover the failure to refund or tender the unearned premium is not a condition of the effectiveness of the cancellation. Westmoreland v. General Accident Fire & Life Assur. Co., 144 Conn. 265, 129 A. 2d 623, 64 A. L. R. 2d 976; Boston Insurance Co. v. Rash (1955), 263 Alt. 201, 82 So. 2d 177,181; Parks v. Lumbermens Mut. Casualty Co. (1945), 327 Ill. App. 356, 64 N. E. 2d 210; and Summers v. Travelers Insurance Co. (1940), 8 CCA, 109 F. 2d 845, 127 A. L. R. 1336. The increased coverage (d) sought by appellee is not even remotely connected with appellant's notice of cancellation in time or content, which is likewise true of (e) the addition of the loss payee clause of the' endorsement, and the failure to notify the loss payee. Nowhere in the insurance contract is cancellation notice required to be given to the loss payee, or to be given by the local agent of appellant. These are but ingenuous, wishful aspirations on appellee's part.
Mississippi has not passed upon the application and validity of an insurance policy clause for notice of cancellation by mailing the same to the insured. In Boston Insurance Co. v. Rogers, 247 Miss. 173, 154 So. 2d 139, which was a suit on a policy with a cancellation clause somewhat similar to the one at bar, but not entirely so, the question may be found, but was not considered in deciding the case. The case was reversed solely on the ground of the trial court's refusal to grant defendant's request to introduce testimony in surrebuttal rebut testimony of plaintiff concerning receipt of an unsigned receipt or questionnaire. Therefore, the opinion in that case stated, " it is not necessary that we consider at this time the remaining assignments of error." The opinion further stated that "We have purposely refrained from making any comment '*" upon the issues. It is apparent therefore that the case was reversed solely on the refusal to permit the defendant to offer surrebuttal evidence.
Addressing ourselves to the question of whether or not the trial court committed manifest and reversible error in finding and adjudicating that the insurance policy in question had not been canceled, at the outset it should be pointed out that "a provision in an insurance policy which makes the mailing of notice sufficient to cancel the policy, even though such notice is not actually received by the insured, is not invalid as contrary to public policy. ' ' See Gendron v. Calvert Fire Insurance Co., 47 N. M. 348, 143 P. 2d 462, 149 A. L. R. 1310; Trinity Universal Insurance Co. v. Willrich, 13 Wash. 2d 263, 124 P. 2d 950, 142 A. L. R. 1. This rule seems to be generally recognized, and it follows therefore that it is only where there is a controlling statute or where the legislature of a state by declaration has announced the mere mailing of notice sufficient to cancel a policy is contrary to public policy that the same can be held to be so. In 29 Am. Jur., Insurance, Sec. 386, p. 737, can be found a discussion of "Notice by Mail as Dependent Upon Receipt 'Thereof." Insofar as the case at bar is concerned, the part applicable is as follows:
"Where the policy states that the insurer may cancel the policy by mailing the notice of cancellation to the insured's address as stated in the policy, the actual receipt by the insured of the notice is not a condition precedent to a cancellation of the policy by the insurer, and the mere mailing of the letter containing a notice of cancellation is sufficient to effect a cancellation. This rule is obviously based upon the fact that the term 'mailing' as used in the policy provision is unambiguous and refutes the contention that the notice must be received. ' '
Dent v. Monarch Life Ins. Co., 231 Mo. App. 283, 98 S. W. 2d 123; Wolonter v. U. S. Casualty Co., 126 Va. 156, 101 S. E. 58; Anno., 64 A. L. R. 2d 995.
The cancellation clause in the ease at bar is a standard cancellation provision. In 29 Am. Jnr., Insurance, Sec. 386, p. 738, may be found a discussion of the fourth type of cancellation provision, which is as follows:
"The fourth type of cancellation provision is represented by what may be called the standard cancellation provision. It provides that the policy may be canceled by the insurance company by mailing to the insured at his address written notice stating that in not less than 5 days thereafter such cancellation shall be effective. The specific provision is added that the mailing of notice shall be sufficient proof of notice and that the effective date and hour of cancellation stated in the notice shall be the end of the policy. Such a provision is valid and is not contrary to public policy. A majority of the cases hold that under such provision the actual receipt of the cancellation notice by the insured is not a condition precedent to the cancellation of the insurance by the insurer in view of the fact that the express terms of the contract sanction the sufficiency of a notice deposited in the mail. In other words, these courts proceed upon the basis that the parties by their contract in effect constituted the government, in its business of operating the mails, the agent of the insured for the purpose of receiving the notice of cancellation. By mailing the cancellation notice .the insurer has fully complied with the standard policy provision- as to notice of cancellation, and the insurer is under no obliga tion to use reasonable diligence to get actual notice of cancellation to the insured."
Both the quoted text in Am. Jur., and 45 C. J. S., Insurance, Sec. 450 (2), pp. 89-90, recognize that there is a minority view of some courts holding that receipt is necessary, but this holding, according to these texts, and those cases, arise where there is a statute affecting the contract provision or usually also where there has not been a strict compliance with the terms of the cancellation provision. This is not so in the case at bar, where there was a complete compliance with the cancellation provision. See also 8 Appleman, Insurance Law and Practice, Sec. 5015, p. 616.
There are many decisions from state courts and likewise from federal courts in which the interpretation of this question of sufficiency of notice of cancellation has been clearly presented. See Warner v. Farmers' Automobile Inter-Insurance Exch., 104 Colo. 359, 90 P. 2d 965; Seaboard Mut. Casualty Co. v. Profit, 4 CCA, 108 F. 2d 597, 126 A. L. R. 1105; Davis v. Travelers Indemnity Co. (1956), 94 Ga. App. 102, 93 S. E. 2d 810; Aetna Casualty & Surety Co. v. Simpson, supra; Queen Insurance Co. of America v. Nalley Discount Co., (1960), 215 Ga. 837, 114 S. E. 2d 21.
In all of the above cited cases the court held substantially that the cancellation condition, when properly given, precluded coverage, irrespective of whether or not the notice was received; that the mailing of notice was sufficient without receipt thereof; that the proof of the mailing of notice was sufficient to establish cancellation without proof of receipt of the notice. We hold therefore that there 'was no burden incumbent upon the appellant to obtain from the appellee a receipt showing that he had actually received or accepted the notice of cancellation. There is no merit in the assertion of appellee that because the approximate $87 refund of premium had not been made to the ap pellee that the appellant was estopped from asserting its special plea in bar or that this might be taken as indicative of the fact that notice of the cancellation was not mailed to the appellee. The concluding sentence of the notice of cancellation herein expressly, provides, "but payment or tender of unearned premium is not a condition of cancellation."
It should be noted also that in all cases with the exception of one California and one Minnesota case where actual receipt of the notice of cancellation by the insured was held necessary, despite the policy provision that notice of cancellation mailed to the address of the assured as stated in the policy should be sufficient notice, a statute required that the insured be given notice of the cancellation in a specified number of days. Apparently such a statutory provision overrides a clause in the policy which would tend to nullify the intention of the legislature of giving the insured timely notice of an impending cancellation of his insurance policy, thus permitting him to attempt a substitute coverage if he so desires. Midwestern Ins. Co. v. Cathey, Okla., 262 P. 2d 434 (which will be later considered herein) ; Anno., 64 A. L. R. 2d, Sec. 17, p. 1012; Farmers Ins. Exchange v. Taylor, 10 CA Okla., 193 Fed. 2d 756 (dictum).
The minority rule has authorities, but some are not applicable to the case at bar for various reasons. It is noteworthy that subsequent to the 1953 decision in Midwestern Ins. Co. v. Cathey, supra, which was based upon the statutory requirement, the legislature of Oklahoma in 1957 repealed the statute, evidently for the purpose of permitting the Oklahoma courts to follow the majority rule, that mailing of the cancellation is sufficient notice without proof of actual delivery.
In the Texas Law Review (1960), Risjord, in the chapter on Construction of Terms of Liability Insurance With Specific Reference to the Cancellation Condition, 38 Tex. L. Rev. 198, 202-203, discusses succinctly the rules on cancellation and points out that the cancellation condition, which is present in the instant case, is of the standard basic automobile liability policy. Fortified with citations, he then summarizes the rule and the reasons for it:
"Where the proper notice is mailed by regular mail to the named insured at the address stated in the policy, the overwhelming authority supports the rule that the notice is effective to terminate the policy at the effective date stated in the notice, so that' the policy does- not apply to accidents occurring* after such date even though within the policy period as originally specified in the policy and even though the notice was not received by the named insured.
". . . The majority rule's rationale includes the assumption (common to the law of contracts, for instance, that the acceptance of an offer transmitted by mail is accomplished by the mailing of the instrument of acceptance) that the efficiency of the Post Office Department of the United States is such that an envelope properly addressed, with the proper postage affixed, deposited in the U. S. mails will he properly delivered. 'Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.' The policy, then, only requires that the company perform the ordinary acts of the business community. The chances of delivery of such a document are so great as to permit social acceptance of the one chance in many thousand that in a particular case there may be no receipt. "
Risjord summarizes that three, or possibly four jurisdictions, without statute, or a legislative declaration of public policy as to cancellation, state the small minority rule that the plain provisions of the policy should be ignored. The rule that evidence of non-receipt "is evidence of non-mailing largely destroys the value of the policy provisions, since there would seem to be little practical difference between this rule and a rule that non-receipt of the notice defeats the cancellation."
The annotation in 64 A. L. R. 2d 982 (1959) is entitled "Actual Receipt of Cancellation Notice Mailed by Insurer as Prerequisite to Cancellation of Insurance." On page 995 it is stated that "The unanimous rule is that the actual receipt by the insured of such notice is not a condition precedent to a cancellation of the policy by the insurer, and the mere mailing of the letter containing a notice of cancellation is sufficient to effect a cancellation."
At page 1000, 64 A. L. R. 2d, the editor discusses the standard provision of cancellation similar to that in the instant case. The overwhelming' majority of cases hold, the text states, that where mailing of notice is sufficient proof of notice, as stated in the policy, the mailing of a notice of cancellation is sufficient, and the actual receipt of such notice by insured need not be shown.
It appears therefore that the minority rule that evidence of non-receipt of the cancellation notice is evidence of non-mailing prevails in only three or four jurisdictions where it is not required by statute or by legislative declaration so that to hold otherwise is contrary to public policy as was held in Jensen v. Traders & General Ins. Co., 38 Texas Law Rev. 209, 141 Cal. App. 2d 162, 296 P. 2d 434 (1956). The Jensen case is easily distinguishable from the case at bar for the additional reason that the language of the cancellation clause was held to be ambiguous, and the jury was moreover instructed in violation of the legislative declared public policy of California.
In the case of White v. Dixie Fire Ins. Co., 36 S. E. 2d 923 (1946), a North Carolina case, the cancellation was communicated by way of a letter advising that the cancellation had been made which is also a distinguish ing feature. However, North Carolina, along with Minnesota, may be listed as following the minority rule in the absence of statutory requirement.
In Allied Am. Mut. Fire Ins. Co. v. Paige, 143 A. 2d 508, a case from the District of Columbia, the court there thought it was unnecessary to decide whether only mailing and not receipt of the notice was required to cancel the policy and advanced the novel proposition that the decision of that question "must await the case in which both mailing and non-receipt are conclusively established." This case affords little comfort to the appellee's position.
In the case of Keeling v. Travelers Ins. Co., 180 Olda. 99, 67 Pac. 2d 944, which comes under the statutory provisions of Oklahoma and which adopts the minority rule, it is not helpful to appellee because it is clearly distinguishable from the case at bar on the facts (as is true of Jensen v. Traders & General Ins. Co., supra, where the Post Office receipt was illegible.) In Keeling v. Travelers the clerk had no independent recollection of mailing the notice, and testified she did so, only as a part of the customary, routine work. The mailing, therefore, just as in Verecchia v. De Siato, 45 A. 2d 8, 353 Pa. 292, was not of a definite and specific character so as to establish the actual fact of mailing. In the case at bar a more definite and specific act of mailing could scarcely be shown.
It can be conceded that Georgia and Missouri have followed the minority line of reasoning, i. e., that evidence of non-receipt would create a jury question of nonmailing. Allstate Insurance Co. v. Buck, 96 Ga. App. 376, 100 S. E. 2d 142 (1957); Ireland v. Mfgs. & Merchants Indemnity Co., 298 S. W. 2d 529. This is an extension of the minority rule. In opposition to these few minority rule citations there are legions of cases from twenty-four states scattered over the entire nation. The listing of these cases would extend this opinion unnecessarily, bnt many can be found in 64 A. L. R. 995 through 1016, and in Am. Jur., Sec. 386, et seq.
We concede that the majority rule need not be adopted merely because it appeals to and is applied by a majority.of the jurisdictions, but the fact that it does so appeal and is so applied is persuasive that it more properly and wisely considers these serious problems and more justly resolves them.
The majority rule repeated over and over is that the mere mailing of the letter containing the notice of cancellation is sufficient to effect a cancellation, as reflected in the decisions from Alabama, Arkansas, Florida, Louisiana, Kentucky, Maryland, New Jersey, New York, New Mexico, Ohio, Oregon, Texas, Washington, Wisconsin, and other states. Possibly the most cogent case applying the majority rule is from Tennessee, which borders Mississippi to the north. It is the case of Cherokee Ins. Co. v. Hardin, 202 Tenn. 110, 302 S. W. 2d 817, decided in 1957. The facts in the Tennessee case are almost the same as in the case at bar and, furthermore, as here, this Tennessee case was the first case decided by the Supreme Court of that state on the identical question before us. Laconically the facts and decision in the Cherokee v. Hardin case are as follows:
The insurer claimed that the policy was cancelled by notice mailed to the insured in accordance with the policy provisions. The insured contended that the notice was never mailed and testified that the notice was never received. As here, the insured sued the insurance company. The insurer produced from its files a carbon copy of the notice, properly addressed, to the Hardins. (The identical steps were taken here). Attached to the carbon copy of the notice was the official receipt of the post office acknowledging receipt by it for transmission to the Hardins of mail. (Again a direct parallel). There was evidence that the insurer's practice was for the clerk who prepared them to place cancellation notices in the outgoing desk mail basket where they are picked up in due course by the porter, who carries them to the post office for delivery; that the porter procured the Post Office official acknowledgment of receipt of each letter for which a receipt is requested; and that the porter brings the receipt back to the desk of the clerk and it is then, by her, attached to the copy notice which is placed in the file. The porter was not called as a witness. The Court of Appeals affirmed a judgment on a verdict for the Hardins. The insurer brought Certiorari. '
The Supreme Court granted Certiorari, reversed the judgment, and sustained the insurer's Motion for a directed verdict, holding (1) that the Hardins necessarily conceded that the cancellation was valid if the notice was mailed, (2) that the' insurer was not required to call as a witness the porter who was accustomed to taking the mail to the Post Office; it was only "required that there be evidence that it was taken there", and (3) that, where the mailing is shown by established regular course of business and acknowledgment by the Post Office, a denial by the insured that the notice was received is not evidence that the notice was not mailed.
In conclusion, the far reaching impact of the adoption of the minority rule in this state should be solemnly considered. Sections 146-147 of the Mississippi Code of 1942 are parts of the Negotiable Instruments Law and Sec. 146 provides that where notice of dishonor is given by the holder of a negotiable instrument to an endorser, and the notice is duly addressed and deposited in the post office, "the sender is deemed to have given due notice, notwithstanding* any miscarriage in the mails." Under Section 147 notice is deemed to have been deposited in the post office when deposited in any branch post office or any letter box under the control of the Post Office Department. These sections codify the law merchant. They constitute a legislative recognition that the notice required to hold an endorser liable on a negotiable instrument is effectively given by depositing it in the post office; that this is "due notice, notwithstanding any miscarriage in the mail." We feel that the wise operation of these sections should not be impaired or the beneficence thereof, which has stood the test of time, he challenged by the adoption of the minority rule above set forth under the facts of the case at bar.
In another field, contracts are frequently made between parties separated by vast distance. The problem frequently is to determine at what moment the contract is consummated. In general, the mailing of an acceptance completes the contract, and what happens thereafter will be of no avail. 1 AVilliston on Contracts (3d ed., 1957), Sec. 81, concludes as follows:
"It was early decided that the contract was completed upon the mailing of the acceptance."
In oil and gas law, the payment by a lessee of delay drilling rentals, under the usual forms of oil and gas leases, reflects also an effective payment when the same ls deposited in the mails. 2 Summers, Oil & Gas Law (1959), Sec. 344, states the overwhelming general rule in this way: "An oil and gas lease may provide for the payment of delay rentals by the mailing of a check, draft or other form of remittance to the lessor. In such a situation the postal service is made the lessor's agent to deliver the remittance and proper mailing, although it is never delivered, constitutes payment." There are most likely several hundred thousands of oil and gas leases in Mississippi, most all of which have a standard provision to the effect that delay drilling rentals may he paid by the proper mailing of the payment, and that such mailing constitutes payment of the rental. 2 Summers, Oil and Gas, Sec. 344; Gloyd y. Midwest Refining Co., 62 F. 2d 483 (C.C.A. 10th, 1933). In addition, there are countless real estate leases pertaining to office buildings, homes, restaurants and divers places of business, not to mention the thousands of insurance policies of every kind and character relating to fire, life, accident, health, in which can be found this standard provision for cancellation. A nullification or modification by judicial decree of these bona fide contracts would be catastrophic.
Though perhaps not in complete accord with Prof. Wigmore's conclusions, the general rules about presumptions are not applicable here, because of the stern fact that the particular terms of the insurance contract governs the rights of the present parties. Threatt v. Threatt, 212 Miss. 555, 54 So. 2d 907 (1951). The notice to appellee was squarely within the requirements of paragraph 16 of the insurance contract, defining what constitutes a notice of cancellation. Therefore, general evidential presumptions are not pertinent to the decision in this case.
It taxes the imagination to conceive how far reaching and profound the adoption of the rule announced by the court below could be upon the legal, economic and social life of the people of Mississippi.
While this may be considered by some to be a harsh rule and while an insured may encounter some danger and harm from having his policy canceled by a written notice from the insurer, he is nevertheless kept safe and harmless by operation of this same rule when by written notice he notifies the insurer of his accident or loss, demanding protection and, as in the words of the testy Hotspur, ' ' Out of this nettle, danger, we pluck this flower safety." So conversely we feel it Avould be unwise to require the insured to prove receipt of the notice of accident by the insurer.
While Ave have been reluctant to set aside the findings of a chancellor, still this court has in the past and should in the future, when it appears that the decree of the chancellor is manifestly incorrect and the determination of the facts or the application of the law is patently erroneous so as to constitute reversible error, reverse the incorrect judgment and enter a proper one here.
In the case at bar it is clear that the record reveals absolutely no actual conflict whatsoever in the testimony as to the mailing of the notice of cancellation; that only by inference or presumption under the minority view can a conflict be asserted; that the appellant complied strictly with the terms and conditions of the policy; that the appellant had the right, under the policy and the conditions thereof, to cancel the policy protecting the appellee; that this cancellation was accurately and properly effected. It follows therefore that the findings of fact by the learned chancellor in the decree entered thereon are manifestly incorrect and should be reversed. Smith v. Cook, 213 Miss. 876, 58 So. 2d 27; Abraham v. Harvey, 245 Miss. 449, 147 So. 2d 639; Griffith's Mississippi Chancery Practice, 2d Ed., Sec. 674, pp. 741-743.
Since there is no positive dispute in the evidence, and furthermore since the evidence consists of authenticated written documents, this court has the right to make its own construction thereof. Northern Assurance Co. v. J. J. Newman Lumber Co., 105 Miss. 688, p. 695, 63 So. 209. This case falls squarely within the rule announced in Smith v. Cook, supra. It is the duty of this court to reverse the decree based upon findings which are manifestly incorrect, against the overwhelming weight of the evidence, some of which consists of written documents the contents of which are not in dispute.
Some may feel that the majority rule which we adopt in construing the cancellation clause of this insurance contract is obdurate, but we feel that ex perience has shown it to be reasonable and just. Moreover, there is involved herein an issue which transcends the immediate interests of both appellant and appellee.
The right to contract is a sacred right, and a contract, entered into in good faith, free from fraud, and not in violation of law by the parties, like a man's word, should be respected and enforced. The court should not alter or nullify a contract that is lawful, unambiguous and embodies the agreements of the contracting parties. If it is oppressive, and if generally utilized will not be for the public good, then it is within the province of the legislative branch of our state government to modify, restrict or prohibit, but not unconstitutionally, the contracting' rights and powers of its citizens.
For all of these reasons, the findings and decree of the trial court are reversed, and judgment is entered here for the appellant.
Reversed and judgment entered for appellant.
All Justices concur except Lee, C. J., ancl Kyle and Rodgers, J. J., who dissent.