Snorek v. Boyle
| Decision Date | 27 November 1962 |
| Citation | 18 Wis.2d 202,118 N.W.2d 132 |
| Parties | Albert SNOREK, an Infant, by Peter J. Panos, his gdn. ad litem, et al., Plaintiffs-Respondents, v. Erma O. BOYLE et al., Defendants-Respondents, Home Mutual Insurance Co., Appellant. |
| Court | Wisconsin Supreme Court |
Byrne, Bubolz & Spanagel, Appleton, William S. Pfankuch, Appleton, of counsel, for appellant.
Arlo McKinnon and Peter J. Panos, Milwaukee, for plaintiffs-respondents.
W. L. Jackman, Hart, Kraege, Jackman & Wightman, Madison, for defendants-respondents.
The sole issue on this appeal is whether defendant Home Mutual may be directly sued on its policy of insurance, which it issued to defendants Joyce, before the liability of defendants Joyce to plaintiffs has been determined.
The coverage clause of Home Mutual's policy provides as follows:
'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, and as damages because of injury to or destruction of property, including the loss of use thereof, excepting liability arising out of the ownership, maintenance, or use of additional premises, custom farming, and liability to farm employees, other than exchange labor as defined in this policy.'
Among the exclusion clauses of the policy is one which provides that the policy does not apply to 'the ownership, maintenance or use of automobiles including the loading or unloading thereof.' The word 'automobile' is defined in the policy so as to expressly exclude farm tractors.
The controlling statutes are secs. 204.30(4) 1 and sec. 260.11(1), Stats., 1957. 2 This court has held that these two statutes must be considered together. Smedley v. Milwaukee Automobile Ins. Co. (1961), 12 Wis.2d 460, 465, 466, 107 N.W.2d 625. The history underlying the enactment of sec. 260.11, Stats., bears this out. Particularly significant is Morgan v. Hunt (1928), 196 Wis. 298, 220 N.W. 224, which held valid, under then sec. 85.25, Stats., a no-action clause of a policy which prohibited direct action on the policy until the liability of the insured had been determined. The court felt that such a clause did not vitiate the direct liability provided by the statute, but only fixed the time when it could be enforced. The next session of the legislature in 1929 then renumbered sec. 85.25 to be sec. 85.93 and amended it by adding this language: '* * * irrespective of whether such liability be in praesenti or contingent and to become fixed or certain by final judgment against the insured.' Chs. 454 and 467, Laws of 1929. With this amendment sec. 85.93 assumed the form it now possesses as sec. 204.30(4), Stats. Nevertheless, in Bergstein v. Popkin (1930), 202 Wis. 625, 233 N.W. 572, this court held that the statute as amended in 1929 did not permit direct action against an insurer where the policy prohibited direct action until after the liability of the insured had been determined. The opinion pointed to the rejection by the 1929 legislature of a bill which would have created a statute substantially similar to sec. 260.11 Stats., so as to permit the insurer to be made a party defendant regardless of whether the insurer's interest was a present interest or a contingent one to become fixed by judgment. The import of the Bergstein case, supra, was that while sec. 85.93, Stats. (now sec. 204.30(4), Stats.) made an insurer directly liable, it needed to be supplemented by a procedural statute which would make the insurer a defendant for direct-action purposes despite the insurer's no-action clause in its policy. Thereafter, the 1931 legislature, by ch. 375, Laws of 1931, amended sec. 260.11(1) Stats., to add the provision which is set forth in footnote 2.
Thus we must look to sec. 204.30(4), Stats., to determine whether there is direct liability, and to sec. 260.11 Stats., to determine whether the insurer may be made a defendant in the action despite a no-action clause in the policy. In keeping with this premise we stated in Smedley v. Milwaukee Automobile Ins. Co., supra, at pp. 465-466, of 12 Wis.2d, at p. 627 of 107 N.W.2d: 'Sec. 260.11 refers to an insurer of motor vehicles and contemplates the type of insurance policy referred to in sec. 204.30(4).' It may be that these two statutes are mutually inclusive though we need not decide that point here.
Home Mutual contends that sec. 204.30(4), Stats., does not make it directly liable to plaintiffs because the Joyce farm tractor was not described in the policy. This contention is grounded upon the following words of that statute, 'when caused by the negligent operation, maintenance, use or defective construction of the vehicle described therein * * *.' (Italics supplied.) In view of the legislative objective in enacting the statute, we do not believe the words 'described therein' should be interpreted literally as Home Mutual contends. We cannot believe that the legislature intended the phrase 'vehicle described therein' in sec. 204.30(4), Stats., to exclude from the operation of that statute situations in which the policy provides coverage to the insured with respect to substituted vehicles or while driving the vehicle of another. Such an interpretation would unduly limit the remedial purpose of sec. 204.30(4), Stats., which is to permit direct action against an insurer whenever there is coverage under the terms of the policy. Therefore, we conclude that if the policy extends coverage to the vehicle involved in a particular accident, then such vehicle is a 'vehicle described therein' within the meaning of sec. 204.30(4), Stats. This interpretation of sec. 204.30(4), Stats., makes Home Mutual directly liable to plaintiffs because it is undisputed that its policy did cover the Joyce tractor at the time of the accident.
Home Mutual further contends that its policy is not of the type referred to in sec. 204.30(4), Stats. It argues that the statute contemplates the type of policy commonly known as an automobile liability policy and not a public-liability policy of the type which it issued to the Joyces to protect them against liability to others arising from the hazards of their farming operations. In support of this contention Home Mutual relies on certain statements made in Smedley v. Milwaukee Automobile Ins. Co., supra. The court therein commented that the policy involved was not one covering liability by reason of the operation of a motor vehicle, but instead was an owners', landlords', and tenants' liability policy. A careful reading of the Smedley case shows that its result did not hinge upon the form of the policy, but rather upon the determination that the stationary operation of the crane at the time of the accident was not the operation and control of a motor vehicle within the meaning of sec. 204.30(4), Stats. We are confident that the legislature, in enacting this statute, was not concerned with the type of policy issued. Instead, it intended to provide direct liability if coverage was extended to a self-propelled vehicle operated upon the public highways. Therefore, we hold that the form or type of policy issued is not controlling in determining whether sec. 204.30(4) applies.
Home Mutual also relies upon a statement made in Rudolph v. Currer (1959), 5 Wis.2d 639, 642, 94 N.W.2d 132, that the legislature has not seen fit to limit the insurer's right to contract 'in any other field than that of automobile liability insurance.' We concede that this language does support Home Mutual's contention that its policy, which is in form not an automobile liability policy, lies without the provisions of sec. 204.30(4), Stats. This statement from the Rudolph case, supra, would have been more accurate had it said that the legislature has not seen fit to limit the insurer's right to contract for a 'no-action clause' except when coverage is provided against liability arising from the operation of a motor vehicle.
Home Mutual lastly contends that the Joyce tractor is not a 'motor vehicle' within the meaning of both secs. 204.30(4) and 260.11(1), Stats. Two bases are asserted in support of this position: (1) farm tractors are expressly excluded from the definition of 'motor vehicle' set forth in sub. (2)(b) of sec. 344.01, Stats.; 3 and (2) sub. (3) of sec. 204.30, Stats., the 'omnibus coverage statute,' uses the words 'automobile' and 'vehicle' interchangeably.
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