Kaczmarck v. La Perriere, 1

• Decision Date: 05 October 1953
• Docket Number: No. 1,1
• Citation: 337 Mich. 500,60 N.W.2d 327
• Parties: KACZMARCK v. LA PERRIERE et al.
• Court: Michigan Supreme Court

Page 327

60 N.W.2d 327

337 Mich. 500

KACZMARCK v. LA PERRIERE et al.

No. 1.

Supreme Court of Michigan.

Oct. 5, 1953.

William K. Campbell, Harold Helper, Detroit, for appellant.

Alexander, Cholette, Buchanan, Perkins & Conklin, Detroit, for appellee.

Before the Entire Bench, except BOYLES, J.

DETHMERS, Chief Justice.

This is garnishment brought to determine defendant insurance company's liability, as carrier of the public liability risk on principal defendant's automobile, to plaintiff on a judgment secured by him against principal defendant for damages arising out of latter's negligent operation of that automobile. From entry of judgment on directed verdict for garnishee defendant and denial of plaintiff's motions for directed verdict and for new trial, he appeals.

On August 23, 1947, principal defendant owned a Packard automobile and insured it with defendant company against public liability for a period of one year. On November 18, 1947, he traded the Packard to one Thaxton for an Oldsmobile and delivered the insurance policy to him with intent to transfer the interest thereunder, although he executed no written assignment. He kept the Oldsmobile until June 22, 1948, but at no time did he notify defendant company that he had acquired it or seek to have the insurance made applicable to it. On that date he disposed of the Oldsmobile and purchased and took delivery of a Pontiac. Within 30 days he notified defendant company of his acquisition of the Pontiac, said he wanted to transfer his policy from the Packard to the Pontiac, and the company's agent took the transfer and assured him that the Pontiac was covered by the insurance policy. While driving the Pontiac on July 8, 1948, he became involved in the accident which resulted in the mentioned judgment. On or after August 4, 1948, defendant company denied coverage to him on the claimed ground that before the accident he had assigned the insurance to Thaxton; and in September or October of 1948, after the one-year period of the policy had expired, it issued a change-of-name-of-insured endorsement to Thaxton, retroactive to November 18, 1947.

The policy contained the following provision:

'VII. Automatic Insurance for Newly Acquired Automobiles.

'If the named insured who is the owner of the automobile acquires ownership of another automobile and so notifies the company within thirty days following the date of its delivery to him, such insurance as is afforded by this policy applies also to such other automobile as of such delivery date: (a) if it replaces an automobile described in this policy, but only to the extent the insurance is applicable to the replaced automobile * * *'.

Defendant company says that the Pontiac did not replace the Packard within the meaning of clause VII, above, because principal defendant, between the respective periods when he owned them, owned an Oldsmobile. It urges that, therefore, coverage was not extended to the Pontiac under that clause, citing Schaller v. Aetna Casualty & Surety Co., 280 App.Div. 988, 116 N.Y.S.2d 729. We do not agree. Principal defendant had disposed of the insured Packard; at the time of the accident he owned and was operating, in place thereof, a Pontiac. The fact that during an intervening period he had owned an Oldsmobile, which he seldom operated and never sought to have covered under the policy, in no wise served to make the Pontiac, at the time of the accident, any less a replacement of the Packard. He notified defendant company of his acquisition of the Pontiac within 30 days from the date of its delivery to him, this making automatic insurance effective on it under clause VII.

The policy also contained the following provision:

'K. Assignment.

'Assignment of interest under this policy shall not bind the company until its consent is endorsed hereon; * * *'.

It was stipulated that the insurer had never tendered a return of premium or any part thereof.

Defendant company contends that it is not liable because of principal defendant's assignment to Thaxton prior to the accident. Plaintiff answers that the assignment was ineffective under the above quoted clause 'K' prior to the accident because defendant company had not theretofore consented to nor endorsed on the policy its consent to the assignment. Defendant company counters that the provision therefor in clause 'K' was not inserted in the policy for the benefit of plaintiff or the assured, but solely for the benefit of the insurer and that it may be waived by it. For this proposition it cites McClendon v. Dean, 45 N.M 496, 117 P.2d 250; In re P. B. McChesney & Son, D.C., 31 F.Supp. 202; Brand v. Erisman, 84 U.S.App.D.C. 194, 172 F.2d 28; Hamilton v. Hamilton, 255 Ala. 284, 51 So.2d 13; Stokes v. American Central Insurance Co., 211 Miss. 584, 52 So.2d 358; Davis v. Modern Industrial Bank, 279 N.Y. 405, 18 N.E.2d 639, 135 A.L.R. 1035; Immel v. Travelers' Insurance Co., 373 Ill. 256, 26 N.E.2d 114. The last cited case held an assignment of no effect when not approved by the insurer. In the...