Nelson v. Southern Guaranty Ins. Co.
| Decision Date | 23 February 1966 |
| Docket Number | No. 23259,23259 |
| Citation | 147 S.E.2d 424,221 Ga. 804 |
| Parties | James H. NELSON et al. v. SOUTHERN GUARANTY INSURANCE COMPANY et al. |
| Court | Georgia Supreme Court |
Syllabus by the Court
The express terms of an exclusion endorsement attached to the insurance policy issued by the plaintiff insurance company to the insured relieved the insurance company from any liability for accidents occurring while the son of the insured was driving, and the trial judge properly held that the public policy of this State at the time of the accident did not prohibit such an exclusion endorsement.
Southern Guaranty Insurance Company brought an action for declaratory judgment and injunction against James H. Nelson, Gerardo Otero, and Pacific Indemnity Company. On July 7, 1963, the plaintiff issued a policy of automobile liability insurance to Gerardo Otero, for a term from July 7, 1963, to July 7, 1964, covering two automobiles, which policy contained an exclusion endorsement as follows: 'It is agreed that the insurance afforded by this policy shall not apply with respect to any claim arising from accidents which occur while any automobile is being operated by Ferdinand Otero, son no Gerardo A. Otero, Jr. son.' On November 1, 1963, Gerardo A. Otero, Jr., was operating one of the automobiles covered by the policy, when he was involved in an accident with James H. Nelson, and a suit for damages was filed by Nelson against Gerardo A. Otero.
The plaintiff sought a declaration that it was not liable to provide any insurance coverage, or to defend any suit filed by Nelson, as a result of the accident on November 1, 1963. Pacific Indemnity Company was named as a defendant because it is subrogated to the rights of James H. Nelson against Gerardo Otero to the extent of payments made by Pacific Indemnity Company to James H. Nelson, on behalf of Nelson's employer, as required by the Workmen's Compensation Law. The plaintiff further sought a declaration that it is not bound to provide any insurance coverage or defense with respect to any lien or right of subrogation claimed by the Pacific Indemnity Company. Injunction was prayed to maintain the status until the question of the liability of the plaintiff could be adjudicated.
Answers were filed, and amendments to the answers and to the petition. The plaintiff and the defendant Nelson both filed motions for summary judgment. The trial judge granted the motion for summary judgment of the plaintiff and denied that of the defendant Nelson. In his judgment he declared that: The policy of insurance, including the endorsement, affords no coverage with respect to the automobile accident on November 1, 1963, and imposes no obligation upon the plaintiff to defend any suit arising out of this accident, and imposes no obligation upon the plaintiff to pay any damages that might be recovered by James H. Nelson or Pacific Indemnity Company. Section 56-407A(c) of the Code (Ga.L.1963, p. 588) is unconstitutional since it contains matter different from that expressed in the caption, in contravention of the Constitution, Art. III, Sec. VII, Par. VIII (Code Ann. § 2-1908). All of the defendants were permanently enjoined from taking any action against the plaintiff to collect any sum of money as damages for injuries arising out of the accident of November 1, 1963.
James H. Nelson and Pacific Indemnity Company appealed from the judgment granting the motion for summary judgment of the plaintiff, and enumerated as error the rulings made in that judgment.
Kelly, Champion & Henson, John W. Denney, Columbus, for appellant.
Swift, Pease, Davidson & Chapman, Ray, Owens, Keil & Hirsh, W. G. Scrantom, Jr., Max R. McGlamry, Columbus, for appellee.
The General Assembly in 1963 passed an amendment to Code Ch. 56-4 (Ga.L.1963, pp. 588-593). Section 56-407A(c) of this Act provided in part as follows: 'No policy or contract of bodily injury liability insurance, or of property damage liability insurance, covering liability arising from the ownership, maintenance or use of any motor vehicle, shall be issued or delivered in this State to the owner of such vehicle, or shall be issued or delivered by any insurer licensed in this State, upon any motor vehicle than principally garaged or principally used in this State, unless it contains a provision insuring the person named therein and any other person, as insured, using any of theose motor vehicles with the express or implied permission of the named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of such motor vehicles * * *.' This provision of the 1963 Act was repealed by Ga.L.1964, p. 306.
It is the contention of the appellants that Code § 56-407A(c), as it appeared in the 1963 Act, declared the public policy of the State, at the time of the accident on November 1, 1963, to be that no insurer could issue a policy of motor vehicle liability insurance which did not insure any person using the motor vehicle insured with the express or implied permission of the insured, and that the exclusion endorsement attached to the insurance policy which is the subject matter of the present action was contrary to public policy and void.
Existing and valid statutory provisions enter into and form a part of all contracts of insurance to which they are applicable, and in case of conflict between the policy and the statutory provisions, the latter control. Employers Liability Assurance Corp. v. Hunter, 184 Ga. 196, 202, 190 S.E. 598. It is therefore necessary to determine whether the section requiring omnibus clause coverage offended the Constitution, Art. III, Sec. VII, Par. VIII (Code Ann. § 2-1908).
The purpose of this constitutional provision is 'to protect the people against covert or surprise legislation.' Blair v. State, 90 Ga. 326, 329, 17 S.E. 96, 97, 35 Am.St.Rep. 206; Central of Ga. R. Co. v. State of Georgia, 104 Ga. 831, 845(4), 31 S.E. 531, 42 LRA 518. The caption of the 1963 Act (Ga.L.1963, p. 588) is...
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