Mooradian v. Canal Ins. Co.
| Decision Date | 23 March 1961 |
| Docket Number | 4 Div. 24 |
| Citation | 130 So.2d 915,272 Ala. 373 |
| Parties | Leo MOORADIAN et al. v. CANAL INSURANCE COMPANY. |
| Court | Alabama Supreme Court |
Edw. F. Reid, Andalusia, for appellant Mooradian.
Tipler & Fuller, Andalusia, for appellant Ellison.
Robt. B. Albritton, Albrittons & Rankin, Andalusia, for appellee.
This is an appeal by Bena K. Ellison, as administratrix of the estate of Leroy Kilpatrick, deceased, and Leo Mooradian, the respondents below, from a decree of the Circuit Court of Covington County, in Equity, wherein complainant (appellee) sought a declaration, pursuant to Declaratory Judgments Act, Title 7, § 156 et seq., as to complainant's liability under an automobile liability policy issued to Leo Mooradian, affording liability insurance coverage on a truck which was involved in an accident in Covington County, resulting in the death of Leroy Kilpatrick, deceased, who was a passenger therein.
Provisions, as pertinent, of the final decree entered on the 20th of March, 1959 are set out as follows:
'And it further appearing to the Court that the endorsement added to the policy of insurance issued by the complainant to the respondent, Leo Mooradian, and entitled 'passenger Hazard excluded', must be given its full legal effect by this court, and it is therefore, unnecessary to rule on any other issue in this case.
'The Court finds, that the endorsement titled 'passenger Hazard excluded' was a part of the policy of insurance issued by the complainant to the respondent Leo Mooradian on the 31st day of July, 1952, and that said policy of insurance was a valid and subsisting contract of insurance between the complainant and the respondent Leo Mooradian on the 15th day of November, 1952. And the Court further finds that no * * * statute of the State of Alabama extends coverage under this policy of insurance to apply to bodily injury, including death, at any time resulting therefrom, sustained by any person while in or upon, entering or alighting from the automobile. The Court further finds that the law suit in the Circuit Court of Covington County, Alabama, styled Bena K. Ellison, as administratrix of the Estate of Leroy Kilpatrick, deceased, Plaintiff, vs. Leo Mooradina [sic] and Hilton Chavers, defendants, seeks to recover damages for the death of one Leroy Kilpatrick, who was alleged to have been a passenger on one of the vehicles purported to be insured by the above named policy of insurance.
'It Is Therefore, Ordered, Adjudged, And Decreed by the Court that the Complainant, Canal Insurance Company, is under no obligation to assist in the defense of any litigation arising from the accident described in the bill of complaint heretofore filed in this cause; or arising from the operation of the vehicle described in said bill of complaint, and that complainant is not required to make any settlements because of the aforesaid accident, injury and death, or to pay any judgments which may be recovered as a result thereof against Leo Mooradian and Hilton R. Chavers, or either of them.'
Appellant, Bena K. Ellison, as administratrix of the estate of Leroy Kilpatrick, deceased, urges that the Alabama Motor Vehicle Safety-Responsibility Act, 1951, p. 1224, effective January 1, 1952 is expressly incorporated into the policy in issue, takes precedence over the 'passenger hazard excluded' clause, and affords to appellant the minimum limits of liability insurance as provided within the Act.
The appellant grounds the argument upon the import of paragraph four under the heading, 'Conditions' within the liability insurance policy of insured Leo Mooradian, which is:
'Such insurance as afforded by this policy for bodily injury liability or property damage liability shall comply with the provisions of the motor vehicle financial responsibility law of any state or province which shall be applicable with respect to any such liability arising out of the ownership, maintenance or use of the automobile during the policy period, to the extent of the coverage and limits of liability required by such law, but in no event in excess of the limits of liability stated in this policy.'
Our financial responsibility act does not require operators of motor vehicles to furnish evidence of financial responsibility before issuance of a driver's license or certificate of registration is issued. The purpose of the Act is clearly to require and establish financial responsibility for every owner or operator of a motor vehicle involved in an accident in this state.
In State Farm Mutual Auto. Ins. Co. v. Sharpton, 259 Ala. 386, 66 So.2d 915, the appellee contended that liability on a policy was controlled by the Motor Vehicle Safety-Responsibility Act, and that section 21(f)(1) virtually eliminated the cooperation clause of the policy insisted on by the appellant. This court in denying appellee's contention was of the opinion that the terms required by the Act apply only to those policies required to be certified as proof of financial responsibility to permit the vehicle to continue to be registered. There was no showing made in that case or in the instant one that the policy involved was issued in response to the requirements of the Act.
Proof of financial responsibility as defined in § 1(j) of the Act is 'proof of ability to respond in damages for liability, on account of accident occurring subsequent to the effective date of said proof'. Accordingly proof of financial responsibility is not required until a motor vehicle is involved in an accident. Quoting from Sullivan v. Cheatham, 264 Ala. 71, 84 So.2d 374, 379; 'Our statute has oft been criticized as 'allowing one free accident". The terms of the Motor Vehicle Safety-Responsibility Act, supra, then are not effective or do not apply to automobile liability insurance policies until proof of financial responsibility to respond in damages as a result of an accident is required by the director of public safety of the State of Alabama to be filed in his office so that the operator of the motor vehicle will not have his driver's license and certificate of registration suspended.
The policy here involved was not issued to the insured in compliance with the Act as proof of financial responsibility and therefore, the Act is without influence.
Appellant Mooradian was issued the policy of liability insurance by appellee on July 31, 1952, and a passenger hazard excluded endorsement was issued, signed, and expressly incorporated into the policy on July 31, 1952 at Greenville, South Carolina. This endorsement stated: 'It is agreed that such insurance as is afforded by the policy for Bodily Injury Liability does not apply to Bodily Injury including death at any time resulting therefrom, sustained by any person while in or upon, entering or alighting from the automobile'. Appellant Mooradian urges that this agreement is not binding for there was no consideration and this latter provision of exclusion, being in conflict with prior provisions of coverage in his policy should not be given effect. It is true that an alteration of the contract by subsequent agreement must be based on a new consideration. Great American Ins. Co. v. Dover, 219 Ala. 530, 122 So. 658. But such is not the status of the instant policy. The endorsement of exclusion incorporated in the policy constituted the entire contract of insurance issued by Canal Insurance Company to Mooradian for which there was consideration given. 'It seems to be well settled that exceptions, 'explicit in terms and plain of meaning,' withdrawing a claim from the general stipulations of the policy, will be given effect.' Loveman, Joseph & Loeb v. New Amsterdam Casualty Co., 233 Ala. 518, 173 So. 7, 8.
Insurance companies have a right, in absence of statutory provisions to the contrary, to write their contracts with narrow coverage. There is no compulsion on either the insured or insurer, and the insured may or may not in his own discretion take the policy. Loveman, Joseph & Loeb, supra. There was no ambiguity in the terms of the 'exclusion clause', there was no need of construction, and it was the duty of the court to enforce it as written. The court rightly held that there was no coverage or liability under the policy for the deceased, Kilpatrick, he being a passenger in the insured vehicle.
Appellants contend that appellee is estopped from denying coverage or from withdrawing from the defense of the insured by once having assumed control of the defense of the action filed against him. The contention is without merit.
As stated in Belt Auto Indemnity Ass'n v. Ensley Transfer & Supply Co., 211 Ala. 84, 99 So. 787, 790, the elements of an estoppel are: '(1) A position of authority assumed by defendant [insurer] under the color of right; (2) submission to and reliance upon that assumption, by plaintiff [insured]; and (3) injury suffered by plaintiff as a proximate consequence of such submission and reliance.'
Also, in our recent case of Ellison v. Butler, Ala., 124 So.2d 88, 90, we had this to say with respect to the asserted doctrine:
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