Tomala v. Peerless Insurance

Williams, P. J. (dissenting).

In deciding this case in favor of the plaintiff, the majority hold that it was necessary for the defendant to notify the so-called insured of the cancellation of the policy under section 93-c of the Vehicle and Traffic Law (now § 313). Such failure, it is said, rendered the policy in full force and effect on the date of the accident which caused plaintiff’s injury. I must disagree with this legal conclusion. That section requires notice to the insured only in the event of “ cancellation by the insurer or failure to renew by the insurer

Actually the policy was returned to the company for cancellation by the broker for the so-called insured on the stated grounds that the insured had purchased insurance in another company and that the proposed policy therefore was not needed. Thus, defendant was entitled to treat this policy as one which had been rejected by the prospective insured and it was properly marked cancelled by the claimed insurer. Indeed, the actions of Raymond Siembida, who it must be remembered was acting primarily as an agent of the insured with very limited powers of agency for the defendant, were calculated to produce this result.

The majority also rely on Teeter v. Allstate Ins. Co. (9 A D 2d 176) but nothing that was said in that case has any bearing on the present controversy. It was decided under an entirely different set of facts. There a ‘ binder policy” had been issued and was outstanding during the period in question. An effort was made to rescind ab initio which this court rejected. In the present case there was no policy in existence at the time of the accident in question nor had there been for some time prior thereto.

A certificate of insurance, sometimes called an PS-1, had been filed with the then Bureau of Motor Vehicles by the insurance broker. It is conceded that the broker had the authority to file such forms for the company under proper and limited circumstances. In other words, he had the right to bind ” and to issue certificates pending the acceptance of a formal application by the company and the issuance of a policy. However, he had no right to issue such forms, as he did in this case, simply as a matter of his own convenience and to protect himself as against the so-called insured. Nor could he, by filing an PS-1, reinstate a policy that he, a broker for the so-called insured, had surrendered for cancellation.

The defendant cannot be estopped because of the performance of an act not authorized by it. This broker had no authority *211to effect the reinstatement of a cancelled policy by filing an FS-1 form when he well knew that the policy had ceased to exist.

I would reverse the judgment appealed from.

Basto w, Goldman and Noonan, JJ., concur in Per Curiam opinion. Williams, P. J., dissents and votes to reverse and dismiss the complaint in an opinion.

Judgment affirmed, with costs.