on August 11, 1962, the date of the mortgage closing, the premium rate was undetermined, and the Servientis paid $225 on account of the premium and a binder was issued. Trimbur issued the policies on September 22, 1962. The face amount of each policy was $22,250 with an 80% co-insurance clause.
The evidence showed that the crux of these cases lies in the relationship between Bazzano and Trimbur, Inc., the general agent. Bazzano was the soliciting agent and turned his business - which he had secured - over to Trimbur, Inc., for issuance of the policies. As mentioned, there was a credit arrangement between them for payment of premiums collected by Bazzano. Monthly statements were sent by Trimbur, Inc., to Bazzano covering policies written during the current month; these statements included whatever credits Bazzano might be due because of cancellations or otherwise and also included the unpaid balance from the previous month's statement. During the interval from the writing of the instant policies, September 22, 1962, and December 19, 1962, there were demands made by Trimbur, Inc., upon Bazzano for payment of premiums on these policies and for other balances due. The evidence shows that Bazzano and Trimbur, Inc., were in disagreement as to the indebtedness of Bazzano to Trimbur, Inc., on the running account. The evidence showed, and the Jury found in Interrogatory No. 1 that Louis W. Opall, as agency supervisor of Trimbur, Inc., had learned that Bazzano had received the initial premium payment of $225 at the time of the mortgage settlement. It was apparent from the evidence that Trimbur, Inc., became dissatisfied with its inability to get funds from Bazzano, and so the instant policies were cancelled by a notice sent by mail on December 19, 1962, to plaintiffs. Richard F. Serventi, on receipt of the cancellation notice, immediately contacted Mr. Bazzano with regard to the cancellation. Bazzano, having himself contacted Opall upon receipt of a copy of the cancellation notices, advised Mr. Serventi that he was covered but that the balance of the premium - $494.72 - would have to be paid. Bazzano, however, gave Mr. Serventi until after the holidays to pay this balance. The evidence showed that when Bazzano contacted Opall with regard to the reinstatement of the policies or the rescinding of the cancellation notice, Mr. Opall - on behalf of Trimbur, Inc., - agreed that upon payment of the balance of the premium by the Serventis to Bazzano, the policies would be reinstated. In Interrogatory No. 3, the Jury found under the evidence that Mr. Opall, for Trimbur, Inc., had received knowledge from Mr. Bazzano that the premium balance had been paid to Mr. Bazzano by the Serventis on January 11, 1963.
It is to be emphasized at this point that the cancellation notices came from Trimbur, Inc., only. None of the defendant insurance companies had notice of the issuance of the policies for some period of time thereafter, nor did any of them participate in or request their cancellation. This phase of the business was left entirely to Trimbur, Inc., which sent the cancellation notices in the name of the defendants on December 19, 1962. The testimony of the Trimbur, Inc., fire underwriter was that the cancellation notices were mailed because Trimbur, Inc., had not received payment of the premium from Mr. Bazzano.
We have thus a situation presented in which the general agent Trimbur, Inc., having fixed the premium and written the policies in the first instance, and having mailed the policies to its sub-agent Bazzano, knew that Bazzano had collected the initial premium payment of $225. It was also carrying Mr. Bazzano on an open account with 60 days credit and with more or less a disagreement between them as to what Mr. Bazzano owed Trimbur, Inc. According to Mr. Bazzano, he discussed the reinstatement with Mr. Opall and reached an agreement with him after the notices of cancellation had been sent. Bazzano's testimony to this effect was accepted by the Jury in its answers to Interrogatories Nos. 2 and 3. This conclusion is further supported by the letter written on March 20, 1963, by Mr. Opall to Mr. Bazzano, indicating that the policies would have been reissued at any time Trimbur, Inc., got its money. Since this is so, and since Trimbur, Inc., knew that Bazzano had received the balance of the premium, the Jury was instructed that it might find for plaintiffs if it found that the understanding between Trimbur, Inc., and Bazzano was that the policies would be reinstated upon payment of the balance of the premium to Bazzano by the Serventis. Mr. Bazzano testified that Mr. Opall had agreed to this.
Thus it seems to the Court now and did so during the trial of the case that Trimbur, Inc., - because Mr. Opall was its agency supervisor - was required to do more after January 11, 1963, than simply remain silent with regard to the owners Serventis and the mortgagee. The reason is obvious. It knew that Bazzano had the premium money and that the Serventis were relying on that fact. It knew also that Bazzano was disputing the amount owed it. Opall on behalf of Trimbur, Inc., wrote two letters on March 20, 1963. The one to Bazzano - plaintiffs' Exhibit 27 - has been discussed. Because of that letter and no doubt because of the relationship between Trimbur, Inc., and Bazzano and what had transpired, Opall came to realize that he must notify the owners that they still did not have insurance. He sent a letter to the owners which referred to the cancellation notice and which read -
"This is to advise that the captioned policies were cancelled by direct notice to you for underwriting reasons, effective December 30, 1962.
"We have notified Mr. Bazzano to either replace these policies or to return the unearned premium to you upon demand."