Western Alliance Ins. Co. v. Albarez

• Decision Date: 17 June 1964
• Docket Number: No. 11205,11205
• Citation: 380 S.W.2d 710
• Parties: WESTERN ALLIANCE INSURANCE COMPANY, Appellant, v. Asiano ALBAREZ et al., Appellees.
• Court: Texas Court of Appeals

Page 710

380 S.W.2d 710

WESTERN ALLIANCE INSURANCE COMPANY, Appellant, v. Asiano ALBAREZ et al., Appellees.

No. 11205.

Court of Civil Appeals of Texas, Austin.

June 17, 1964.

Rehearing Denied July 8, 1964.

Gay & Meyers, Austin, for appellant.

A. T. Mullins, Kuykendall & Kuykendall, Austin, for appellees.

HUGHES, Justice.

Western Alliance Insurance Company, appellant, having issued a public liability automobile insurance policy to Silas Collins and, after proper notice, having failed to defend and action brought by Asiano, Seferino and Gregorio Albarez and Angelo Hinojosa, appellees, against Silas Collins and his brother Miles Collins for damages resulting from a collision of the insured vehicle, while being operated by Miles Collins with the permission of Silas Collins, with a vehicle owned by Asiano Albarez and in which all appellees were then riding, was sued by appellees to recover the amount of judgment awarded them against Silas and Miles Collins in such original action.

Appellant's refusal to defend the Collins' suit and its denial of liability for the judgment therein rendered is based upon the following endorsement of exclusion attached to the policy:

'119. EXCLUSION OF NAMED DRIVER

This endorsement forms a part of Policy No. 109902 issued to Silas Collins by the Western Alliance Insurance Company at its Agency located

(Name of Insurance Company)

(city and state) Austin, Texas and is effective from December 28, 1960

(12:01 A.M. Standard Time)

(The information above is required only when this endorsement is issued subsequent to preparation of the policy.)

This endorsement forms a part of the policy to which attached, effective from its date of issue unless otherwise stated herein.

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 Miles Collins (Brother)

Acknowledged by /s/ Silas T. Collins

By ANDERSON MCBRIDE WORMLEY

(Duly Authorized Representative)

Form 119.--EXCLUSION OF NAMED DRIVER

Texas Standard Automobile Endorsement

Revised October 20, 1941.'

The Trial Court, in his conclusions of law, found that the above endorsement was invalid because it violated Sections 21, 21(a), 21(b) and 21(f) of Art. 6701h, Vernon's Ann.Tex.Civ.St., and Art. 5.06 of the Texas Insurance Code, V.A.T.S. The Court also legally concluded that the endorsement violated the public policy of Texas.

Art. 6701h is known as the 'Texas Motor Vehicle Safety-Responsibility Act.' It is a very comprehensive act which was enacted in 1951.

Appellees point to language used by the Legislature in the emergency clauses to the original Act ¹ and to a 1963 amending Act ² which in general language state the purpose of the law to be for the protection of the public against financially irresponsible owners and drivers of motor vehicles and to encourage safer use of motor vehicles on our streets and highways.

We appreciate and approve the laudable objectives of this legislation but in determining its legal effect we are confined to the specific means prescribed by the Legislature for achieving its goal. No general statement of public policy can override or add to the plain provisions of the Act.

The specific provisions of the Act which are claimed to be violated by the endorsement excluding liability for acts of Miles Collins are these:

'Sec. 21. (a) A 'motor vehicle liability policy' as said term is used in this Act shall mean an owner's or an operator's policy of liability insurance, certified as provided in Section 19 or Section 20 as proof of financial responsibility, and issued, except as otherwise provided in Section 20, by an insurance company duly authorized to write motor vehicle liability insurance in this State, to or for the benefit of the person named therein as insured.

'(b) Such owner's policy of liability insurance:

'1. Shall designate by explicit description or by appropriate reference all motor vehicles with respect to which coverage is thereby to be granted; and

'2. Shall pay on behalf of the insured named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured, all sums which the insured shall become legally obligated to pay as damages arising out of the ownership, maintenance or use of such motor vehicle or motor vehicles * * *.

'(f) Every motor vehicle liability policy shall be subject to the following provisions which need not be contained therein:

'1. The liability of the insurance company with respect to the insurance required by this Act shall become absolute whenever injury or damage covered by said motor vehicle liability policy occurs; said policy may not be canceled or annulled as to such liability by any agreement between the insurance company and the insured after the occurrence of the injury or damage; no statement made by the insured or on his behalf and no violation of said policy shall defeat or void said policy; * * *.

'4. The policy, the written application therefor, if any, and any rider or endorsement which does not conflict with the provisions of the Act shall constitute the entire contract between the parties.'

The policy in suit obligated appellant:

'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of:

'A. Bodily injury, sickness or disease, including death resulting therefrom, hereinafter called 'bodily injury,' sustained by any person;

'B. injury or destruction of property, including loss of use thereof, hereinafter called 'property damage';

arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile, and the company shall defend any suit alleging such bodily injury of property damage and seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent; but the company may make such investigation and settlement of any claim or suit as it deems expedient.'

The policy then names those who are insureds as follows:

'PERSONS INSURED

'The following are insureds under Part 1:

'(a) With respect to the owned automobile,

'(1) the named insured and any resident of the same household,

'(2) any other person using such automobile, provided the actual use thereof is with the permission of the named insured;'

Appellees also direct attention to Art. III of the Act entitled, 'Security following accident,' particularly Sec. 5(c) which provides, in part 'This Section shall not apply * * * 1. To such operator or owner if such owner had in effect at the time of such accident a motor vehicle liability policy with respect to the motor vehicle involved in such accident.'

Sec. 5 prescribes the procedure to be taken by the Department of Public Safety in accident cases when the owner or operator of the motor vehicle involved fails to deposit security as determined by the Department. As shown by Sec. 5(c) supra, this entire Section 5 is inapplicable where, as here, the owner has a motor vehicle liability policy with respect to the motor vehicle involved in the accident.

Appellees say that, 'It would be a stramed construction indeed to say that the 'motor vehicle liability policy' referred to in said Secs. 5(c) and 2 is not the same motor vehicle liability policy defined and discussed in Sec. 21 of Article IV.' Further arguing this point appellees say, 'The policy issued before the accident and the one issued subsequent to the accident are both motor vehicle liability policies. Each must contain the minimum requirements of statute. The only requirements are contained in Sec. 21.'

Appellees contend that 'the only difference between the policy in force before the accident and the policy certified to the Department is that the latter policy provisions are absolute--that is, the company could not raise as a defense late reporting of the accident by the insured, failure to send the company the suit papers, breach of the co-operation clause in the policy, etc. These defenses are available to the insurer under the policy issued prior to the accident.'

However much we might be inclined to appellees' point of view that the Motor Vehicle Safety Responsibility Act regulates and controls the provisions of motor vehicle liability insurance policies which are required by the Act as well as those which are not required by the Act, we are precluded by explicit language of the Act as well as authoritative Court decisions to the contrary.

There are numerous events in the Act which result in suspension of a motor vehicle's registration and an operator's license unless proof of financial responsibility is furnished. Sec. 19(a) of the Act provides that this 'Proof of financial responsibility may be furnished by filing with the Department the written certificate of any insurance company duly authorized to write motor vehicle liability insurance in this State certifying that there is in effect a motor vehicle liability policy for the benefit of the person required to furnish proof of financial responsibility.' (...