The opinion of the court was delivered by: Oxner, Justice.
November 12, 1957.
This is a suit on a policy insuring respondent's dwelling against fire for a term of one year beginning February 10, 1955. The agent writing the policy, A.B. White, was joined as a co-defendant. The house was destroyed by fire on January 27, 1956. The defense was that the policy was cancelled on August 5, 1955, and the unearned premium remitted to and accepted by the insured. The trial resulted in a verdict for respondent against the insurer alone for the sum of $2,500.00, the face amount of the policy. From the judgment entered thereon, the Insurance Company has appealed.
The first question we shall determine is whether the Court below erred in refusing a motion by appellant for a directed verdict upon the ground that the policy was cancelled by the Company long prior to the loss, under the following provision:
On August 4, 1955, the Insurance Company issued and mailed to respondent a check for $12.69, upon the left hand corner of which was the following notation:
"By endorsement this check is accepted in full payment of the following account
The foregoing notation correctly stated the number of the policy covering respondent's dwelling. The check was duly received by him but was not cashed until December 5, 1955. His explanation of the acceptance of this check was as follows:
White, as a witness for appellant, gave quite a different version. He testified that during the latter part of July respondent stopped him on the highway and told him that the policy on his house had been cancelled and inquired why the Company did so, to which he replied that he didn't know and there was nothing he could do about it. White said that several days later he called at respondent's store and compared the policy number on the check with that on the house policy and told respondent that his house insurance was cancelled. He also claimed that respondent then had in his possession a notice of cancellation of the house policy. White denied ever telling respondent that the cancellation was on the store and not on the house. He further denied having any conversation with respondent in December.
In determining whether the motion for directed verdict should have been granted, we must accept as true respondent's version of the transaction. From his testimony it appears that the Company has never sent him notice of cancellation of the house policy; that being uncertain after receiving in the same envelope the check and notice of cancellation of the store policy as to which insurance the Company intended to cancel, he called the local agent who, after examining the policy, the check and the notice of cancellation, told him positively that the house policy was not affected; and that he did not cash the check until ...