Hartford Fire Ins. Co. v. Shapiro
| Decision Date | 14 January 1960 |
| Docket Number | 6 Div. 180 |
| Citation | 270 Ala. 149,117 So.2d 348 |
| Parties | HARTFORD FIRE INSURANCE COMPANY v. Phil SHAPIRO, Jr. |
| Court | Alabama Supreme Court |
Tweedy & Beech, Jasper, for appellant.
T. K. Selman and Thomas Leon Beaird, Jasper, for appellee.
This appeal is from a judgment of the Circuit Court of Walker County, Alabama, awarding the appellee, Phil Shapiro, Jr., plaintiff in the court below, $1,350 damages for the breach of an oral contract to insure, as claimed in Count 2 and 3, or of insurance, as claimed in Count 4 of the complaint.
A few days prior to December 18, 1954, plaintiff's father, Phil Shapiro, Sr., asked W. Douglas Leake, Jr., agent of appellant, defendant in the court below, to contact his son, appellee, and sell appellee some insurance covering a new automobile which appellee had just purchased. The agent did so, and a few days later, on or about December 18, 1954, wrote and delivered to appellee a policy of insurance covering said automobile.
A bill for one year's premium on said insurance, in the amount of $127, was rendered appellee on January 1, 1955, and paid by him, by check, dated January 3, 1955.
Item 3 of the policy, showing the coverages contained in it, is as follows:
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Coverages Limits of liability Rate Premium
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A--Bodily Injury Liability 25 thousand dollars XXXX $68.00
H A each person
A C
R C 50 thousand dollars
T I each accident XXXX
F D ----------------------------------------------------------------
O E B--Property Damage Lia- 5 thousand dollars
R N bility each accident XXXX 32.00
D T ----------------------------------------------------------------
C--Medical Payments $2000.00 each person XXXX 10.00
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D--Comprehensive Loss of Insert Amount or
H or Damage to the Au- Actual Cash Value
A tomobile, except by col--
R F lision but including
T I Fire, Theft and wind--
F R storm $ Actual Cash Value 17.00
O E ----------------------------------------------------------------
R E--Collision or Upset Actual Cash Value
D less $--deductible XXXX
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F--Fire, Lightning and
Transportation $
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G--Theft $
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H--Windstorm, earthquake
Explosion, Hail or
Water $
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I--Combined Additional
coverage
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J--Towing and Labor Costs $10 for each
disablement XXXX
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Premium for and Form Numbers of Endorsements attached to Policy
Total Premium $127.00
In March 1955, appellee reported to appellant a loss occasioned by theft of his hubcaps, and this calim was paid.
On May 19, 1955, appellee drove his car off the highway and it was badly damaged. He then discovered that the policy of insurance carried by him did not cover collision and upset, and sued upon his alleged oral contract to insure, as set out in Counts 2 and 3 of the complaint, or of insurance as set out in Count 4 of the complaint.
On the trial, evidence of the one conversation between plaintiff and defendant's agent was admitted over objection of counsel that such negotiations were merged into the written contract. The written contract was not introduced until after testimony concerning these conversations was already in the record.
Plaintiff's testimony is that he stated he wanted 'full coverage.' Agent Leake testified that plaintiff balked at the high premium on collision and upset. After the policy was introduced, the following occurred:
'The Court: Motion overruled.
'Mr. Tweedy: We except.
'The Court: Motion overruled.
'Mr. Tweedy: We except.'
These rulings raise the question of whether there was, as a matter of law, an oral agreement, valid at the time of the loss complained of, which the jury could consider in arriving at their verdict. The same questions are raised by appellant's written request for the general charge and by its timely motion for a new trial, which the trial court overruled. We are of the opinion and hold that the trial court erred in refusing to exclude the above evidence, and also, in refusing appellant's written request for the general charge, and in denying the motion for a new trial.
A valid contract to insure or of insurance can be effected by parol. Mobile Marine Dock & Mutual Ins. Co. v. McMillan, 31 Ala. 711; Insurance Co. of North America v. Thornton, 130 Ala. 222, 30 So. 614, 55 L.R.A. 547; Cherokee Life Ins. Co. v. Brannum, 203 Ala. 145, 82 So. 175; Liverpool & London & Globe Ins. Co. v. McCree, 210 Ala. 559, 98 So. 880; Globe & Rutgers Fire Ins. Co. of New York v. Eureka Sawmill Co., 227 Ala. 667, 151 So. 827; Liberty National Life Ins. Co. v. Staggs, 242 Ala. 363, 6 So.2d 432; Resolute Fire Ins. Co. v. O'Rear, 35 Ala.App. 398, 47 So.2d 425. Such a contract is without the Statute of Frauds. Commercial Fire Ins. Co. v. Morris, 105 Ala. 498, 505, 18 So. 34; Springfield Fire & Marine Ins. Co. v. DeJarnett, 111 Ala. 248, 259, 19 So. 995. An agent, if he can issue policy contracts, can also bind his company by parol. Cherokee Life Ins. Co. v. Brannum, supra.
Sec. 75, Title 28, Code of Alabama 1940, reads, in pertinent part, as follows:
'No life nor any other insurance company nor any agent thereof shall make any contract of insurance or agreement as to policy contract other than is plainly expressed in the policy issued thereon, * * *.'
This statute does not prohibit the making of a valid contract of insurance by parol because such are not 'policies.' Sun Ins. Office of London v. Mitchell, 186 Ala. 420, 65 So. 143. Nor does it prevent the negotiation of an enforcible contract to insure. United Burial & Ins. Co. v. Collier, 24 Ala.App. 546, 139 So. 104, certiorari denied 224 Ala. 57, 139 So. 106.
First, as regards the contract of insurance: It is familiar law that a contract of insurance is essentially like all other contracts, and governed by general rules of contract. North River Ins. Co. v. McKenzie, 261 Ala. 353, 74 So.2d 599, 51 A.L.R.2d 687.
Where there exists between the parties a written contract, the authorities are in agreement that parol evidence cannot be received to explain, contradict, vary, and to, or subtract from its terms. Bozeman v. J. B. Colt Co., 19 Ala.App. 126, 95 So. 588; Miles v. Sledge, 157 Ala. 528, 47 So. 595; W. T. Rawleigh Co. v. Phillips, 232 Ala. 124, 167 So. 271; Worthington v. Davis, 208 Ala. 600, 609, 94 So. 806; Town of Brewton v. Glass, 116 Ala. 629, 22 So. 916. The statement of this rule employed in insurance cases, is that all parol negotiations, understandings and agreements are merged into the written policy. Jefferson Life & Casualty Co. v. Williams, 37 Ala.App. 718, 76 So.2d 185.
The plaintiff concedes that this is the law, but insists that the parol evidence, or merger rule, should not apply in this case on the ground that the agreement concerning collision and upset insurance is collateral, separate and distinct from the agreements embodied in the policy. Such an exception to the parol or extrinsic evidence rule is recognized in Alabama, as evidenced by Woodall v. Malone-Harrison Motor Co., 219 Ala. 366, 122 So. 357, 358, where the court said:
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