Curtis v. Dearborn Nat. Ins. Co.

• Decision Date: 01 March 1951
• Docket Number: No. 77,77
• Parties: CURTIS et al. v. DEARBORN NAT. INS. CO.
• Court: Michigan Supreme Court

Page 396

46 N.W.2d 396

329 Mich. 601

CURTIS et al. v. DEARBORN NAT. INS. CO.

No. 77.

Supreme Court of Michigan.

March 1, 1951.

Kleinstiver & Anderson, Jackson, for defendant and appellant.

John S. Denton, Jackson, for plaintiffs-appellees.

Before the Entire Bench.

SHARPE, Justice.

This is an appeal from a judgment in favor of plaintiffs in an action to recover for collission loss to a tractor under an insurance policy issued by defendant to plaintiff James Curtis as owner, with loss clause in favor of plaintiff bank as holder of a chattel mortgage on the tractor. The amount of damage was stipulated at $700.

The policy was issued April 16, 1947, and contains no reservations as to where the tractor might be used. On or about November 24, 1947, plaintiff's tractor collided with an automobile at a point on M-112, approximately 48 miles from the city of Jackson and at a time when plaintiff was operating his tractor between Chicago and Detroit. At the time the policy was issued, plaintiff was employed by Consolidated Freight Company doing pick-up and delivery required at Jackson and within 50 miles radius of Jackson. In September 1947, plaintiff discontinued his employment with Consolidated Freight Company and made other arrangements with Long Transportation Company using his tractor for trucking operations between Detroit and Chicago.

The trial court entered judgment for plaintiffs from which defendant appeals and urges that the insurance coverage was limited to short-haul or 50-mile radius operations only for which premiums were charged and paid; and that if the policy covered liability for a long haul, then plaintiffs were liable for the additional premiums, the amount of which defendant was entitled to set off against plaintiffs' claim. It is urged by plaintiffs that defendant insurance company is bound by the terms of the contract of insurance in an action at law upon the policy, and its failure to insert the 50-mile radius provision or deductible provisions is, in legal effect, a waiver and estops it from insisting that its omission constitutes a legal defense to an action on the policy.

We note that defendant insurance company did not seek reformation of the policy at any time. Such policy cannot be reformed in a law action. See Rossbach v. Continental Insurance Co. of New York, 276 Mich. 122, 267 N.W. 802. The policy contained no restrictions that the tractor was to be used only within a 50-mile radius of Jackson. Whatever discussion there may have been about distance restrictions between plaintiff Curtis and the agent of the insurance company was merged in the policy of insurance. See Kleis v. Niagara Fire Insurance Co., 117 Mich. 469, 76 N.W. 155. It follows that defendant insurance company may not rely on any oral understanding contrary to the insurance policy as a defense.

In Michigan Stamping Co. v. Michigan Employers' Casualty Co., 235 Mich. 4, 209 N.W. 104, 107, we said: 'There is a clear distinction between the effect of an omission in a policy which the insurer relies on to defeat the action and one which the insured seeks to have incorporated therein as a basis for recovery. As to the former this court has held that the neglect of the insurer to insert a provision of which its agent was informed at the time the...