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April 21, 1987


Appeal from the Circuit Court of the City of St. Louis, Hon. Jack L. Koehr.

Application to Supreme Court for Transfer Denied July 14, 1987.

Joseph J. Simeone, Sr., Judge, C. Gaertner, P.j., concurs; Smith, J., Dissents in separate opinion.

The opinion of the court was delivered by: Simeone

Joseph J. Simeone, Sr., Judge

This is an appeal by plaintiffs-appellants, alleged insureds under a policy of fire and extended coverage insurance, from a judgment of the circuit court of the City of St. Louis entered on June 6, 1986 holding that there was no policy of insurance in effect on November 27, 1982 when the premises owned by appellants were partially destroyed by fire. The trial court concluded that "defendant has no liability to plaintiff for his fire." For reasons hereinafter stated, we affirm.


Plaintiffs, Peter Hammond, his wife Jovanka Hammond and his mother-in-law Estelle Jakovac own certain real property located at 2137-39 California Avenue in the City of St. Louis as joint tenants. They purchased it in 1980. The defendant-insurance company first issued a one-year fire and extended coverage policy effective August 22, 1980 for one year. Notice for the renewal of 1981-1982 policy was made in July, but since no premium was received by August 25, 1981, the defendant closed the file. On September 18, 1981, the premium was received and a policy issued for coverage from September 19, 1981 to September 19, 1982. This policy, a fire and extended coverage insurance policy No. HO 745556, was issued pursuant to the Missouri Basic Property Insurance Inspection and Placement Program, section 379.810 R.S.Mo. 1986 (The Fair Plan) and was in effect from September 19, 1981 through September 19, 1982. On September 1, 1982, the company, by written memorandum or "invoice" informed Peter Hammond that the policy was to expire on September 19, 1982 and further informed him as to renewal of the policy:


The amount of insurance was $21,000 for the building -- a four family flat. The total premium of the policy for fire, extended coverage and vandalism was stated in the notice to be $261.00. Premium was to be made by check or money order and payable to the "Missouri Fair Plan" for the amount due. The notice also indicated that the amount shown was to be "mailed to Missouri Fair Plan" at its office in St. Louis.

Nothing was done by the plaintiffs prior to September 19, 1982. Hence, the file was "closed" because the premiums was not paid as of September 21, 1982.

John J. Dower, at the time, was the plaintiffs' insurance broker. He had no agency contract with the defendant. On October 29, 1982, Dower wrote to Peter Hammond informing him that the fire insurance "on your property" expired September 19, 1982; that since the renewal premium was "never paid" the "building is now without insurance." Dower's letter informed Hammond that if "you wish to rewrite the coverage please send cashier's check" so that "I can submit a new application." On November 13, 1982, Peter Hammond through his broker, Dower, made a renewal application for insurance. The application was also signed by Hammond's broker. Dower. On November 6, 1982, a few days before making application for renewal of the policy on November 13, 1982, Hammond wrote a check for $261.00, the amount of the requested premium stated in the September 1, 1982 notice payable to "Missouri Property Insurance Placement Facility." On November 10, 1982, Dower deposited this check in his own account. On November 15, 1982, Dower obtained a "Treasurer's Check" in the amount of $261.00 payable to Missouri Property Insurance Placement Facility and mailed the same to the defendant on that date. The renewal form dated September 1, 1982, indicating that the insurance expired on September 19, 1982 and the $261.00 check were received by the defendant on November 16, 1982 -- three days after they were mailed.

On November 18, 1982, the defendant sent a notice to Dower quoting a new premium of $293.00 for the renewal of the insurance. A rate change had occurred on October 20, 1982.

On November 22, 1982, Dower wrote to Peter Hammond enclosing a letter dated November 19, 1982 from the insurance company. That letter indicated the amount of the new premium, $293.00. Dower's letter informed Hammond that the new premiums was $293.00, that his cashier's check for $261.00 was enclosed and that partial payments were not acceptable to the company. The letter then informed Hammond that "you will have to get an additional Cashier's check in the amount of $32.00 and forward it to them before they will insure the property on California. Please give this matter your immediate attention."

On Wednesday, November 24, 1982, Hammond purchased a money order at a 7-11 store in the amount of $32.00 payable to the defendant and together with the $261 cashier's check mailed the same, postage prepaid, at 1720 Market Street around 7:00 or 8:00 p.m. November 25, Thursday, was Thanksgiving Day, a legal holiday. On Friday, November 26, 1986, there was ordinary mail delivery but the defendant's office was closed. On Saturday, November 27, 1982 at about 4:00 a.m., a fire occurred at the premises on California Avenue and considerable damage -- ranging between $14,000 and $29,000 -- was done. On Monday, November 29, the defendant, in the regular course of business posted the check in the amount of the premium and issued a new fire and extended coverage policy on the next day for the period November 30, 1982 through November 30, 1983.

On December 5, 1982 a "Property Loss Notice" was filed by John J. Dower, Insurance Agency, reporting that a fire had occurred on November 27, 1982 in the basement of plaintiffs' premises; that the amount of the loss was approximately $10,000; and that the loss had been reported by Peter Hammond. The notice contained the following in the box marked "renewals": "I realize this occurred before effective date but his attorney says it should be reported." On December 8, 1982, defendant wrote to Mr. Hammond informing him that "as you are aware," your policy expired on September 19, 1982 and the policy "did not come into effect until November 30, 1982. As the loss occurred on November 27, some three (3) days prior to the inception of your policy, there is no coverage."

These proceedings followed. Plaintiffs filed their original petition on June 15, 1983. On June 4, 1986, by leave, plaintiffs filed their second amended petition upon which this cause was tried. The petition recited the above events and alleged that the policy of insurance was effective November 16, 1982 when the premium of $261 was received at defendant's office, or in the alternative the policy was in full force in effect on November 24, the day the premium was "placed in the hands of Defendant's agent, the postal service" because "judicial notice of delivery" on November 26 (Friday) "requires that the policy was in effect on November 27 at 12:01 a.m. prior to the fire." The petition prayed for a declaration as to whether the insurance policy was in force on the date of loss because of the "unequivocable offer of the Defendant insurer and the Plaintiffs subsequent acceptance which was in strict accord with the offer or alternatively in effect by tender of the $293.00 premium by mail . . . on November 24, 1982." Plaintiffs prayed for a judgment of $21,000, for vexatious refusal to pay, attorneys' fees, interest and costs.

Trial before the court was held on June 4, 1986. The parties stipulated to many facts including that no record was kept "by way of the envelope in which the particular premium on the policy . . . was received, so that there would be no indication from that as to what postmark would be on it."

At trial, Mr. Hammond testified concerning the facts. On cross-examination, he admitted that in November, he would not get coverage until "after the $32 check and the $261 check were received by the Fair Plan."

During the hearing, the general manager of the Missouri Fair Plan also testified. He stated that it is the "normal practice and custom" to stamp the mail the first business day" when it is received. The "log" in this case indicated that the $261 check and the $32 money order was received on November 29, 1982. The policy of the Plan is to make a policy "effective at 12:01 a.m. the date following receipt of the premium in the Fair Plan ...

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