Lewis, Matthews and Mintz. The opinion of the court was delivered by Mintz, J.A.D.
This is a declaratory judgment proceeding in which plaintiff in a jury trial sought a determination that there was insurance coverage in effect with defendant Mount Vernon Fire Insurance Company, a Pennsylvania corporation (Mount Vernon), on September 2, 1967 when an automobile accident occurred on its premises. As a consequence of that accident several law suits were instituted against plaintiff. At the close of the trial the court granted plaintiff's motion for judgment against Mount Vernon and its general agent Quaker Agency, Inc. (Quaker) declaring the policy to be in force and effect on the stated date. Quaker's motion for a new trial was denied and it appeals therefrom. Mount Vernon did not join in the appeal.
Plaintiff maintains business premises in Englishtown and its broker ordered an insurance policy through Quaker which, as general agent for Mount Vernon, issued an "Owners', Landlords' and Tenants' Liability Policy" for a one-year period commencing April 18, 1967. The total premium amounted to $2,678. Efforts to collect this premium from plaintiff were unsuccessful. On June 2, 1967 plaintiff wrote Quaker:
We presently have a policy with your company which is up for renewal.
With deep regret we must ask for a temporary lapse in the renewal of this policy, due to current financial conditions.
This lapse in time will be for a period of three to six months. At which time we expect to continue the current policy and pay its premium. We are also aware of the extreme risk involved by taking such action.
Will you please advise us immediately as to the affect (sic) of such action with your company and if this temporary lapse in the policy is acceptable by your company.
Upon receipt of said letter Frank S. Walsh, who controls and operates Quaker, called Sobechko, president of Englishtown. Walsh testified that he advised Sobechko that it would be unwise to be without coverage and inquired as to what action he was taking with his bank to procure financing for the payment of the premium. According to Walsh the premium was to be forwarded by plaintiff's bank by July 1, 1967. It was not received. Thereafter a cancellation notice, dated July 6, 1967 and effective July 17, 1967, was mailed to plaintiff by Quaker for Mount Vernon. The notice recited that the cancellation was at the broker's request for non-payment of premium. The broker testified that he made no such request.
Walsh testified that on or about July 11, 1967 he received from plaintiff two checks each for $500, one dated July 8 and the other July 17. They were deposited in Quaker's bank account in a Newark bank. One check cleared and the other was returned for insufficient funds. A few days later he drove to Freehold and had the check certified, thereafter redepositing it to Quaker's account. The $1,000 was retained by Quaker. Significantly, Walsh never communicated with plaintiff after receipt of the $1,000 and admitted that his company never rendered an accounting to plaintiff for that sum or offered to return any unearned premium, either on a pro-rata or short-rate basis. Walsh testified that he computed the premium on a short-rate basis and that there was $62 remaining, which he applied to his effort and expenses in getting the $500 check certified.
Judge McGowan, in a comprehensive oral opinion, concluded on the motion for judgment that the receipt and retention by Quaker of the partial payment constituted a waiver of the previously issued cancellation notice by the insurance company and that the policy was in full force and effect on September 2, 1967. On the motion for a new trial the same ruling was made by the trial judge.
We agree with these determinations. We are satisfied that, accepting as true the evidence ...