Negvesky v. Alston

California Court of Appeal Jun 24, 1957 No. Civ. 22219Published

Before: Drapeau

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Holding. The court held that the insurance policy was in full force and effect at the time of the accident because the insurer had extended credit for the premium payment, and there was substantial evidence to support the trial court's finding against the insurer's claim of fraud.

Issues

Whether the insurance policy was void ab initio due to fraud and misrepresentation.
Whether the trial court's findings regarding the validity and effectiveness of the policy were supported by substantial evidence.
Whether the trial court committed prejudicial error by excluding evidence of the insured's prior bad checks.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The insurance company does not dispute the legal rules that when a policy of insurance is issued and delivered under an arrangement whereby credit is extended to the insured for payment of the premium the insurer is liable for a loss”

“it is plain from the record that the policy was issued and delivered by the insurance company and was in effect on the day of the accident, that credit was given the insured for payment of the premium”

DRAPEAU, J. pro tem.

The facts in this case, told chronologically, are as follows:

Astor Alston and Robert Alston, copartners, were selling used cars, and running a garage in Hawthorne, California.

[68]

March 10, 1952, they applied to an authorized agent of Security Insurance Company for a policy of liability insurance that, among other things, would cover any person driving an automobile in their possession and with their consent.

On April 8, 1952, the insurance company issued the policy, which was for one year. On April 9th their agent countersigned the policy and delivered it to the Alstons. The agent was authorized to effect binding insurance by his countersignature on policies.

The agent told the Alstons that the premium was $1,578.31. The Alstons told the agent they didn’t have the money to pay the premium just then. The agent then agreed with them that they could pay the premium in three equal installments, over a period of 60 days. The first installment was due April 15, 1952.

In this connection the agent testified:

“Q. Now, at the time that you delivered this policy to him, he told you that his financial situation was such that he would have to set up a schedule of payments because of the fact that he had cars coming in in the future and he would have to make the payments as those cars were disposed of; isn’t that correct? A. Correct.

“Q. And you knew from that conversation that the reason he wanted to wait was so that he could get funds in order to pay the premium; isn’t that correct? A. Correct.

“Q. And you extended him credit to that extent, didn’t you? A. Yes.”

On the same day the policy was delivered, April 9, 1952, the Alstons gave Mrs. Marian Corbin permission to drive one of their automobiles, to try it for a day or two, to see if she wanted to buy it. While she was driving the car her husband asked one of the Alstons, in her presence, if they had insurance on their ears. Mr. Astor Alston said, “ ‘Yes. ... I have a blanket insurance. ... It is PL & PD.’ . . . Anyone that was driving them was automatically insured.”

Negvesky v. Alston

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