Emprs' Liab. Assurance Corp. v. Indus. Accident Comm'n

CURTIS, J.

An award was made by the Industrial Accident Commission in favor of William H. Palms and against his employer, the Atascadero Mill & Lumber Company, and against the petitioner herein, the Employers’ Liability Assurance Corporation, and the Indemnity Insurance Company of North America, as insurance carriers of said employer. The Indemnity Insurance Company had issued to the employer a policy of compensation insurance for the year beginning December 18, 1931, and ending December 18, 1932. This policy was written through Paul Bone, the agent of the company. The policy contained a provision which permitted either party to cancel the policy without cause by giving notice to the other party. About three months after the date of the policy, the Indemnity Insurance Company gave notice of cancellation of the policy on the ground that the employer had failed to pay the premium. The employer

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bad, however, paid the premium in full to Bone, the agent, who evidently had failed to pay it. over to his company. The employer immediately notified Bone of the notice of cancellation, and asked the reason why such a notice had been sent. Bone assured the employer that it was all a mistake and that he would communicate with the company and straighten up the matter, and assured the employer that its policy was intact and was not subject to cancellation. Nothing further was heard from the company regarding the policy. It did not send a member of its auditing staff, as it said it would in the notice of cancellation, to ascertain the amount of the premium earned under the policy, nor did it return any part of the premium paid by the employer, nor take any action whatever indicating that it had canceled said policy of insurance. Five months afterwards Bone absconded, and the employer fearing that its policy with the Indemnity Insurance Company might be affected by Bone’s disappearance, took the matter up with the agent of the petitioner. The agent of petitioner stated that Bone’s affairs were in such shape he could not determine whether the policy of the employer was in force or not. He promised verbally “to take care” of the employer in case the policy with the Indemnity Insurance Company was not in force, and later wrote to the employer, a letter to that effect. No policy was ever issued by the petitioner, nor was any premium ever paid petitioner by said employer. A few days later, after the date of this letter, and on October 31, 1932, the employee Palms was injured. Under this state of facts, the Industrial Accident Commission held both insurance companies. If the policy issued by the Indemnity Insurance Company was canceled by the notice sent to the employer, then that company is not liable. If it were not canceled, that company is liable, and the petitioner here is not liable, as the uncontradicted evidence of the employer was that it did not intend to take out duplicate insurance. The Indemnity Insurance Company filed a petition for a hearing herein after the District Court of Appeal had denied its petition to annul said award against said company. This petition we denied, with the result that the award in favor of the employee against the Indemnity Insurance Company has become final. It follows as a necessary corollary from our decision sus