Opinion ID: 1633715
Heading Depth: 1
Heading Rank: 1

Heading: did the trial court disregard the plain language of the master policy?

Text: On appeal, Malta argues that the trial court's decision was contrary to the plain language of the master policy and the certificates of insurance, which both provide for a $50,000.00 limit on coverage. Although the master policy does provide in the Amount of Insurance paragraph that [i]n no event shall total insurance in force as to any one debtor exceed a maximum of $50,000.00 of insurance, it is clear that that clause is rendered virtually meaningless by other language in the policy. In a subsequent paragraph, the master policy provides as follows: The Company shall have the right to cancel any insurance on the life of the Debtor in excess of those amounts listed in the Amount of Insurance paragraph contained in this Policy, within thirty days after receipt at the Home Office of the Company, Jackson, Mississippi, of written notice of the granting of such insurance. Such cancellation shall be given by written notice to the Creditor. (R. 116) (Emphasis added.) The language of this paragraph clearly contemplates that policies may be written for amounts in excess of $50,000.00. Furthermore, Eddie Ray, the bank officer who issued the policy in question to Mr. Washington, testified that he had issued credit life policies in excess of $50,000.00 with Malta a few times in the past. Mr. Washington himself had previously been issued a single policy in excess of $50,000.00. There is simply no merit to the appellant's argument that the provision limiting coverage on any one debtor to $50,000.00 was an absolute limitation. It should also be noted that the master policy provides not that the Company may reject the excess coverage, but that it may cancel the excess coverage within thirty days after receipt of notice of the granting of the insurance. The use of the word cancel clearly contemplates a policy that has already become effective. In National Life and Accident Insurance Company v. Miller, 484 So.2d 329 (Miss. 1985), appeal dismissed, ___ U.S. ___, 108 S.Ct. 2007, 100 L.Ed.2d 596 (1988), this Court stated that an insurance company, like other principals, is bound by knowledge of, or notice to, its agent within the general scope of his authority, notwithstanding a contrary provision in the application or policy. Id. at 334-35, quoting 32 C.J. 1069 (emphasis added). The Court further stated that a policy delivered with full knowledge [by the agent] of a state of facts which under its written stipulations, would render the insurance void should be binding upon the company. Id. at 335, quoting Big Creek Drug Co. v. Stuyvesant Insurance Co., 115 Miss. 333, 75 So. 768 (1917). In the instant case, First National Bank delivered a certificate of insurance to Washington for an amount, which when coupled with other existing coverage, exceeded the limit specified in the master policy. Because the bank was an agent of Malta, authorized to issue policies of credit life insurance, Malta should be bound by the policy issued to Washington, even if under the stipulations of the master policy, the insurance would exceed the $50,000 limitation placed upon its agent, Eddie Ray.