Cook v. Michigan Mutual Liability Company , 154 Ind. App. 346 ( 1972 )

Hoffman, C.J.

Two issues are presented by this appeal. The first issue is whether, at the time of the automobile-motorcycle collision, appellee Margaret Y. DeLeon had a valid contract of insurance with appellee Michigan Mutual Liability Company (Michigan Mutual). The second issue is whether, at the time of the collision, Mrs. DeLeon had a valid contract of insurance with appellee Buckeye Union Insurance Company (Buckeye).

The amended complaint herein was filed by Michigan Mutual seeking a declaratory judgment that it was not required to defend an action pending against Mrs. DeLeon arising from a collision on July 24, 1967, between an automobile driven by Mrs. DeLeon and a motorcycle driven by Dennis C. Cook. Pursuant to the stipulation of the parties the cause was submitted for trial to the court upon the deposition of Margaret V. DeLeon, the deposition of Paul H. Kumming, the affidavit of Velma Wood; admissions contained in the answers filed by the defendants; and responses of the defendants to plaintiffs’ request for admissions and interrogatories and answers thereto. The factual background pertinent to this appeal may be summarized from the above evidence as contained in the record before us as follows:

From June 15, 1966, through June 15, 1967, Mrs. DeLeon was insured by Michigan Mutual. Prior to the expiration of this policy, Mrs. DeLeon discussed insurance by Buckeye with Paul Hattendorf of the M. E. McRoss Agency.

After June 15, 1967, Mrs. DeLeon received two policies of insurance. One of these two policies was issued by Buckeye. The Buckeye policy incorrectly described the automobile owned by Mrs. DeLeon, and she returned the policy to the agency which was to correct it and send it back. The second policy was issued by Michigan Mutual.

While under the mistaken belief that there was a thirty day grace period of coverage under the previous Michigan Mutual policy, Mrs. DeLeon applied for insurance with Meridan Mutual Insurance Company. Such insurance became effective on July 15, 1967. Then, on July 24, 1967, the automobile-motorcycle collision occurred.

Based upon the evidence submitted by the parties, the trial court made special findings of fact and conclusions of law, and entered judgment in favor of plaintiff Michigan Mutual and defendant Buckeye. Defendants Dennis C. Cook and Juanita J. Cook thereafter filed their motion to correct errors. Such motion to correct errors was overruled by the trial court and this appeal followed.

On appeal, the scope of review to be applied by this court has been set forth in Merryman v. Price (1970), 147 Ind. App. 295, at 304, 259 N.E.2d 883, at 888, 22 Ind. Dec. 62, at 71 (transfer denied), (Cert. denied 404 U.S. 852), as follows:

“On appeal this court accepts the ultimate facts as stated by the trial court if there is evidence to sustain them. Carpenter v. Wisniewski, [139 Ind. App. 325], 215 N.E.2d 882 (1966). All intendments are taken in favor of the findings. Jones v. Greiger (1960), 130 Ind. App. 526, 166 N.E.2d 868.

“Where the special findings of fact are not challenged by a motion for a new trial the appellant admits for purpose of appeal generally that the facts are correctly found. Where alleged error is presented in the conclusion of law this court may not consider the evidence but only the findings of fact. The special findings of fact are accepted as true. See Wiltrout, Indiana Practice, § 1664 and the cases cited therein.”

The first issue is whether, at the time of the collision a valid contract of insurance existed between Margaret DeLeon and Michigan Mutual. The findings of fact made by the trial court pertinent to this issue are as follows:

“18. The defendant DeLeon did not accept the renewal policy issued by plaintiff and did not consider herself bound by its terms or obligated to pay any premium for said policy.

“19. The defendant DeLeon did not have the intention of being insured by the plaintiff as a result of its issuance of the renewal policy.”

The general rule is that the delivery of a policy by the insurer to the insured upon the expiration of a policy without request by the insured is an offer which must be accepted by the insured before a contract of issuance is effective. 17 Couch 2d (1967), § 68:30, et seq., at 677.

Such acceptance can be by acts, words or deeds of the insured which manifest an intent to accept. Houston Fire & Casualty Ins. Co. v. Pritchard & Abbot (Tex. Civ. App. 1954), 272 S.W.2d 392, (Affirmed 283 S.W.2d 728) ; 17 Couch 2d (1967), § 68:30, et seq., at 677, supra. Under certain circumstances, mere retention of the policy by the insured could constitute a valid acceptance. Crowther v. Sullivan (Tex. Civ. App. 1927), 290 S.W. 212; Phelan v. Everlith (1961), 22 Conn. Supp. 377, 173 A. 2d 601.

Any facts which show a meeting of the minds could support a finding that a contract was in effect. In the instant case, however, there is ample evidence in the record before us whereby the trial court could find that Mrs. DeLeon did not accept the policy and did not intend to be bound by it. The renewal policy recites the payment of a premium as consideration. When there is no intention to pay the required premium there is no valid insurance policy. Farmers Insurance Exch. v. Allstate Insurance Co. (E. D. Mich. 1956), 143 F. Supp. 213, 215. The evidence is clear that Mrs. DeLeon had no intention of paying the required premium. The findings of fact are supported by the evidence and the conclusion of law is consistent therewith. Therefore, the judgment should be affirmed as to Michigan Mutual Liability Company.

The issue with regard to Buckeye is whether, at the time of the collision, a binding contract of insurance existed between appellee Buckeye and appellee Margaret V. DeLeon.

The special findings of fact made by the trial court which are pertinent to Buckeye are as follows:

“6. Prior to June 15, 1967, the defendant Buckeye Union Insurance Company, issued a policy of automobile insurance to the defendant DeLeon which policy period was the same as that described in the renewal policy issued by plaintiff.

“7. The policy was issued by the Buckeye Union Insurance Company at the specific instance and request of the defendant DeLeon.

“8. The policy issued by Buckeye Union Insurance Company misdescribed the 1964 Chevrolet 4-door Sedan owned by the defendant DeLeon, which misdescription was through the mistake of the Buckeye Union Insurance Company and its agents.

“9. The Buckeye Union Insurance Company policy was returned to the agents of that company by the defendant DeLeon for correction. However, no further policy was ever issued by the defendant Buckeye Union Insurance Company and no premiums paid by DeLeon to Buckeye Union Insurance Company.”

Based upon these findings the trial court made the following conclusion of law which is pertinent to this issue:

“6. Buckeye Union Insurance Company is not obligated to defend the claims and legal actions brought against the defendant DeLeon as a result of the collision of July 24, 1967. Buckeye Union Insurance Company is not obligated to pay any damages, judgments, costs or expenses that may be assessed against the defendant DeLeon, as a result of the collision of July 24, 1967.”

To create a contract of insurance there must be an offer and acceptance between the parties, that is, a meeting of the minds on the essential elements of the contract. The Celina Mutual Casualty Co. v. Baldridge (1937), 213 Ind. 198, 204, 10 N.E.2d 904; Indiana Ins. Co. v. Knoll, et al. (1968), 142 Ind. App. 506, 515, 236 N.E.2d 63, 14 Ind. Dec. 103.

In the instant case, the four findings of fact, when viewed as a whole, show only that a policy of automobile insurance was issued by Buckeye at the request of DeLeon, the insured. The policy incorrectly described the 1964 Chevrolet 4-door Sedan owned by Mrs. DeLeon who returned the policy to the company for correction. These findings lead inescapably to the conclusion that a valid contract of insurance existed between the parties.

In Bushnell, Receiver v. Krafft, et al. (1962), 133 Ind. App. 474, at 479, 183 N.E.2d 340, at 343, it is stated:

“As a general rule, once a valid contract of insurance has been effectuated, the right of either party to cancel it at pleasure can accrue in only three ways: by a concurrent agreement, by a reservation in the policy, by statute.”

Here, there was no finding of cancellation under the terms of the policy or pursuant to statute. Therefore, the conclusion of the trial court may only be upheld if the findings of fact show a mutual or concurrent agreement to rescind the contract.

The concurrence of the parties in the rescission of the contract may be shown by their express agreement or their respective acts. Gwynne v. Ramsey (1883), 92 Ind. 414. Nonetheless, there can be no mutual agreement to rescind without a meeting of the minds thereon. 17A C.J.S., Contracts, § 389, at 464.

In New Amsterdam Casualty Co. v. New Palestine Bank (1915), 59 Ind. App. 69, 107 N.E. 554 (transfer denied), the agent of the insurance company misrepresented the names of the insured to the company. The policy was issued by the company, however, when it was received by the insured it was returned to the agent for the sole purpose of correction of the names of the insured. The agent forwarded the policy to the insurer for correction, but was thereafter notified that the company refused the business. The policy was retained by the company and marked cancelled. No other policy was issued, no demand for premium payment was made and no premium was tendered by the insured until after a subsequent loss when the tender was refused. The trial court entered judgment for the insured, and such judgment was affirmed on appeal. At 75-76 of 59 Ind. App., at 556 of 107 N.E., it was stated:

“The policy was valid as written. Its return for correction was not an offer for cancellation, or a refusal to accept the contract. [Citing authorities].

“The policy was in force at the time it was returned for correction, and would remain in force until duly cancelled. No attempted cancellation would be effective until brought to the notice of appellee. We therefore must conclude that the policy was in force at the time of the loss.”

In the instant case, the trial court found that Mrs. DeLeon returned the policy for correction, that no further policy had been issued at the time of the accident (approximately one week later), and that no premium had been paid by Mrs. DeLeon to Buckeye. These facts do not show a mutual agreement to rescind the contract. The facts as found by the trial court lead only to the conclusion that at the time of the accident a valid contract of insurance existed between the parties covering Margaret DeLeon’s automobile.

It has been generally held that nothing can be added to a special finding of fact by presumption, inference or intendment. Kerfoot v. Kessener (1949), 227 Ind. 58, 75, 84 N.E.2d 190, and cases there cited. However, in Bills v. Boettcher (1946), 116 Ind. App. 631, at 642, 65 N.E.2d 495, at 499 (transfer denied), it was stated:

“Furthermore, while it is generally true this court has no power to add to a special finding of facts, we may, where, as in this case, the evidence is before us, give heed to a fact appearing in the evidence which does not admit of dispute, in order to uphold the judgment.”

In the instant case, were we to supplant the findings of the trial court by looking to the uncontroverted facts contained in the record before us, we would find that the only mutual agreement for rescission took place on the day after the accident when Mrs. DeLeon communicated to the agent of the insurer that she had other insurance coverage

For the foregoing reasons, the judgment of the trial court as to Michigan Mutual Liability Company is affirmed; and the judgment of the trial court as to Buckeye Mutual Insurance Company is reversed; and this cause is remanded to the trial court with instructions for further proceedings consistent with this opinion.

Sharp, J., concurs; Staton, J., concurs in part and dissents in part with opinion.