Schaal v. Great Lakes Mut. Fire & Marine Ins. Co.

• Decision Date: 03 February 1959
• Citation: 6 Wis.2d 350,94 N.W.2d 646
• Parties: Marvin SCHAAL, also known as G. Marvin Schaal, Respondent, v. GREAT LAKES MUTUAL FIRE AND MARINE INS. CO., Appellant.
• Court: Wisconsin Supreme Court

Page 646

94 N.W.2d 646

6 Wis.2d 350

Marvin SCHAAL, also known as G. Marvin Schaal, Respondent, v. GREAT LAKES MUTUAL FIRE AND MARINE INS. CO., Appellant.

Supreme Court of Wisconsin.

Feb. 3, 1959.

LeRoy E. Michel, Milwaukee, Arthur C. Mertz, Stephen I. Martin, Chicago, Ill., of counsel, for appellant.

Muchin & Muchin, Manitowoc, for respondent.

MARTIN, Chief Justice.

On February 2, 1957 one Judie Dobyns, then 18 years old, was driving the plaintiff's automobile on Highway 42 in Manitowoc county, with the permission and consent of the plaintiff. She lost control of the car and struck a tree, damaging the automobile to the extent stipulated. Judie Dobyns had no driver's license, a fact which the plaintiff knew when he permitted her to use the car.

At the time of the accident there was in force a policy of automobile collision insurance issued by defendant to plaintiff and covering the car in question, which policy provides, among other things:

'Coverage B-1--Collision or Upset: Direct and accidental loss of or damage to the automobile caused by collision of the automobile with another object or by upset of the automobile.'

Under 'Exclusions' the policy provides:

'This policy does not apply: * * *

'(j) under coverage B-1, while the automobile is operated * * * (b) by * * * any person who is not legally licensed to operate an automobile.'

This is a comprehensive loss policy relating to 'direct and accidental loss of or damage to the automobile;' it is not an automobile liability policy.

The only question presented to the trial court was whether or not exclusion (j) is void by reason of the provisions of secs. 204.34(1)(a) and 204.30(3), Stats., or, stated otherwise, whether or not the legislature intended the policies dealt with in those sections to include automobile collision insurance policies as well as automobile liability insurance policies.

Sec. 204.34 provides, so far as material:

'(1) No policy of insurance, agreement of indemnity or bond covering liability or loss arising by reason of the ownership, maintenance or use of a motor vehicle issued in this state shall exclude from the coverage afforded or provisions as to benefits therein any of the following:

'(a) Persons while driving or manipulating a motor vehicle, who shall be of an age authorized by law so to do; * * *.'

Sec. 204.30 provides that any policy of insurance issued in Wisconsin 'against loss or damage resulting from accident or injury to a person, and for which the insured is liable, or against loss or damage to property caused by * * * any motor vehicle, and for which the insured is liable' must contain a provision reading substantially as follows (sub. (3)):

'The indemnity provided by this policy is extended to apply, in the same manner and under the same provisions as it is applicable to the named assured, to any person or persons while riding in or operating any automobile described in this policy when such automobile is being used for purposes and in the manner described in said policy. Such indemnity shall also extend to any person legally responsible for the operation of such automobile. * * *'

Both of these statutes deal with liability insurance policies and, as observed in Frye v. Theige, 1948, 253 Wis. 596, 601, 34 N.E.2d 793, 796, 50 A.L.R.2d 124, contain the only limitations which the legislature has imposed upon the powers of the parties to contract. There the court said:

'We see no ground upon which this court can properly limit the power of contract beyond the prescriptions of the statutes. The fact that the foregoing limitations have been put by statute upon the power to contract indicates a legislative view that public policy calls for no other limitation.'

The trial court determined that by the language used in both sec. 204.34(1) and sec. 204.30(3), Stats., they apply to collision insurance policies as well as liability policies, and it held exclusion clause (j) to be in violation of both.

In Julius v. Druckrey, 1934, 214 Wis. 643, 649, 254 N.W. 358, 361, 94 A.L.R. 293, this court stated:

'However, where this language is capable of more than one interpretation, it must be read in a sense which harmonizes with the subject-matter and the general purpose and object of the statute. * * * with a view to effecting its purpose and object.'

Sec. 204.30(3), commonly referred to as the omnibus coverage provision, first appeared in the statutes in ch. 372, Laws of 1925, in which the legislature denominated the act as one 'relating to liability insurance policies.' The same language was used in the bill, 242, S, in substitute amendment 1, S thereto, which amendment incorporated a portion of bill 175, S which had been killed earlier in the session. That portion of 175, S dealt with the requirement of coverage for liability of the owner of the automobile for damage for death or injury resulting from the negligent operation of the automobile by any person legally using or operating the car with the permission of the owner.

It is also clear from the language used in the statute itself that it applies only to liability insurance...