Automobile Underwriters v. Camp

• Decision Date: 29 May 1940
• Docket Number: 27365.
• Citation: 27 N.E.2d 370,217 Ind. 328
• Parties: AUTOMOBILE UNDERWRITERS et al. v. CAMP et al.
• Court: Indiana Supreme Court

27 N.E.2d 370

217 Ind. 328

AUTOMOBILE UNDERWRITERS et al. v. CAMP et al.

No. 27365.

Supreme Court of Indiana

May 29, 1940

Fenton Steers, Beasley & Klee, of Indianapolis, Padgett &amp Rogers, of Washington, and Ely, Corn & Nixon, of Petersburg, for appellants.

McDonald & McDonald, of Princeton, for appellees.

ROLL Chief Justice.

This was an action by appellee, Jeanette Camp, by her next friend Lucian D. Camp, seeking to have funds held by the appellant, Automobile Underwriters, Inc., as attorney-in-fact for subscribers at the State Automobile Insurance Association, hereinafter called the Insurance Company, applied to the payment of a judgment which she obtained against the appellee, William Summers, for injuries received by her while riding in the automobile of said Summers as a guest. Her claim for the application of said funds is predicated on a policy of insurance issued to William Summers by the said Insurance Company, which policy was made an exhibit to her complaint.

Appellee Summers defaulted and the court found in favor of the plaintiff and ordered the Insurance Company to pay the former judgment out of the funds in its hands.

The decisive question presented by this appeal is whether or not the policy of insurance, issued by the Insurance Company to William Summers, provided protection to said Summers for injuries to occupants of his automobile. If it did not, then the appellee, Jeanette Camp, is not entitled to have any part of the fund held by the Insurance Company applied to the payment of her judgment, and this cause should be reversed. The 'bone of contention' in this case centers around the application for insurance, two petitions to transfer, and a 'rider' attached to the policy at the time the policy was delivered to said Summers.

The evidence is undisputed, and the record discloses the following facts:

On October 14, 1932, William Summers made application for insurance on his automobile, which application was introduced in evidence as defendant's exhibit 'C'. In said application, under the heading 'coverage wanted' and 'premium deposit', appear the following questions and answers.

Coverage Answer Premium

Wanted 'Yes' or No' Deposit

28. Liability and Property

Damage ................. yes... $10.00

28A. Excess Liability Amount .. no.... $....

29. Occupancy Coverage ....... no.... $....

30. Additional Names, Num..... none. $....

31. Collision (Ded.$ No) ..... yes... $20.00

32. Fire ..................... no.... $....

33. Theft .................... no.... $....

34. Cyclone .................. no.... $....

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35. Total Yearly Premium........ $30.00

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36. Premium for 6 Months........ $15.00

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On August 31, 1933, and on February 9, 1934, William Summers executed a written request to have said insurance transferred to another automobile. These written requests were introduced in evidence as defendant's 'exhibit E', and 'F', and appearing on the face of said exhibits are the following:

Answer the Following .... To be

by 'Yes' or 'No' un- .... Trans- To be

der Heading ............. ferred Added

28. Liability and Property

Damage ................ Yes

28A. Excess Liability

Amount ................ No

29. Occupancy Coverage ...... No

30. Additional Names,

Num ................... No

31. Collision (Ded. $No) .... Yes

32. Fire .................... No

33. Theft ................... No

34. Cyclone ................. No

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The applications for transfer were granted, and the transfer was effected, and evidenced by the riders attached to the master sheet of the policy.

The policy is dated October 18, 1932, and was delivered a few days thereafter. At the time the policy here in question was delivered to William Summers, there were three riders pasted to the front page of the master sheet and to about the middle part thereof. The first rider contains a provision relating to financial responsibility, and was signed by the president and secretary of the company. The provisions of this rider have no material value in this case. This second rider is unsigned and it is the instrument around which much of the controversy in this case centers.

At the top of this rider is the following:

'* * * in consideration of the premium payment this endorsement is attached to and forms part of this policy subject to the limitations, exclusions and warranties contained therein.

'Public Liability and Property Damage Insuring Coverage.'

Following this headline are six paragraphs printed in small type and lettered A, B, C, D, E, and F. Each paragraph covers about one inch of space, and together, they circumscribed the liability of the company as to public liability. This rider will be referred to herein as defendant's exhibit 'A'.

The third rider contains eight paragraphs and has to do with property damage to the owner's car. This rider is unsigned, and contains a provision that it is attached to and forms a part of the policy. This rider will be referred to as defendant's exhibit 'B'.

Paragraph G of the master sheet provides: 'G. No condition or provision of this contract shall be modified, changed, amended, altered or waived except by a written endorsement attached hereto and executed by the Automobile Underwriters, Inc., Attorney-In-Fact for the State Automobile Insurance Association.'

It is appellee's contention that defendant's exhibits 'A' and 'B' are no part of the contract, and were properly excluded as evidence. They seek to maintain their position on two theories; (1) Because paragraph G. of the master sheets provides that alterations, written endorsements, etc., must be signed by the company, and defendant's exhibits 'A' and 'B' were not executed according to provision G; (2) appellee made the policy, minus these exhibits, a part of her complaint by attaching it thereto as an exhibit, and the defendant did not deny the execution thereof under oath. They therefore argue that, because the defendant did not answer by a plea of non est factum, it is precluded from denying the execution of the policy as pleaded, and, consequently, there was no error in the admission of the policy, minus the two riders, defendant's exhibits 'A' and 'B', in evidence.

We will first consider the question whether or not the two riders, defendant's exhibits 'A' and 'B', constituted a part of the contract.

Couch, on Insurance, Vol. 1, § 159, states the general rule as follows: 'As a general rule, a rider or slip attached to a policy or certificate of insurance is, prima facie at least, a part of the contract to the same extent, and with like effect, as if actually embodied therein, provided, of course, that it does not violate any statutory inhibition, and has been lawfully, and sufficiently attached, or attached and referred to therein, since riders or slips, in order to be considered as a part of the contract, must be made a part of the policy, either appearing in the body of the instrument, or by attachment, or proper reference thereto in the policy.'

American Jurisprudence, Vol. 12, § 245, says: 'Thus, a memorandum on a written contract qualifying or restraining its operation may be regarded as a part of it. Similarly, a memorandum on a bill or note indorsed thereon contemporaneously with the execution of the instrument forms a part of the contract and binds the parties to the same extent as if it had been embodied in the instrument. An endorsement upon an instrument before its execution may be treated as an explanation in writing of the intent of the parties, although to have this effect it must be shown affirmatively to have been upon the instrument when executed.'

Vol. 17, Corpus Juris Secundum, Contracts, § 299, page 716, states the general rule in similar terms. The case of Davern v. American M. L. Ins. Co., 1925, 241 N.Y. 318, 150 N.E. 129, 130, 43 A.L.R. 522, involved the question of whether or not a rider, physically attached to the policy, became a part thereof. The court in discussing this question says: 'The parts of the rider which we have quoted above show, we think, that the rider was intended merely to enlarge the scope of the insurance or indemnity provided by the policy. It was part of the same contract, subject to the same conditions, based upon the same application. Liability under the rider depends upon the validity of the contract of which it is a part.'

In Billet v. Pennsylvania Fire Ins. Co., 101 N.J.L. 546, 553, 129 A. 209, 211, 212, the question was as to whether or not a rider, not physically attached to the policy, became a part thereof, and the court said: 'While the rider was not physically attached to the policy, it recited that it was attached to and formed a part of the policy. The fact that it was not actually physically attached was a circumstance which could be waived by the Insurance Company. We see, therefore, no error in the ruling of the court of common pleas that the rider was a part of the policy, as there were no facts controverted which made the question other than one of law for a court.'

In the case of Legare v. West Coast Life Ins. Co., 118 Cal.App. 663, 5 P.2d 682, 684, the court had under consideration the identical question here presented and the court said: 'The policy proper is of course signed. That is all that the law requires. No requirement has been called to our attention that every rider attached to a policy must, likewise, be signed. It is not a question of a modification of the policy after its issuance. This sheet, as we have seen, was part and parcel of the policy when it was issued.'

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