Per Curiam.
See
Burch
v.
Wargo,
1 Mich App 365. Upon leave granted the plaintiff administrator reviews determination by the Court of Appeals that the “Restrictive Indorsement” of the first policy excluded liability of the garnishee for payment of the judgment entered in the principal suit.
The indorsement on its face is free from ambiguity or doubt.
The consequential question is whether the insurer and the insured agreed
with pertinent effectiveness
that “the terms of this indorsement shall remain applicable upon any subsequent renewal or renewals of this policy.” Preliminary to review of this question it is noted (a) that no contention is made that the indorsement was “with
drawn” upon “mutual consent” prior to the time plaintiff’s cause against the principal defendant arose, and (b) that plaintiff does not claim — aside from reliance upon presently considered section 520 of the vehicle code — that the carry-over clause of the indorsement was invalid. (For a discussion and citation of authorities concerned generally with this question, see annotation headed “Motor vehicle insurance: exclusionary provision relating to age of operator”; 83 ALR2d 1236.)
The closely analogous principles laid down in
Eghotz
v.
Creech,
365 Mich 527 are fully applicable here. Unless some provision of statute or known rule of public policy has ordained otherwise, the parties were entitled to and did validly contract that the exclusion of coverage, when the designated minor son was driving the insured automobile, would until “withdrawn” carry over and become a part of any identifiable-as-such “renewal or renewals of this policy.”
In
Eghotz
the question was whether specific provisions appearing in an automobile liability policy, for automatic suspension of coverage for nonpayment of premium, prevailed over claim that section 3020 of the insurance code (CLS 1961, §500.3020 [Stat Ann 1957 Rev §21.13020]) required written notice of cancellation as a condition of such suspension. Holding that they did, the Court provided an appropriate introduction to analysis of our stated question:
“If the provisions of the statute exclude any other method for the cancellation or suspension of a casualty insurance policy, the trial court was in error. If the provisions of the statute do not exclude a time-payment indorsement, then the decision of the trial judge was correct.
“The early Michigan cases laid down the proposition that a policy of insurance is much the same as
any other contract. It is a matter of agreement by the parties. The courts will determine what that agreement was and enforce it accordingly.” (p 530)
From this generally settled observation we turn to plaintiff’s reliance upon that part of said section 520 which reads (CLS 1961, §257.520 [Stat Ann 1960 Rev § 9.2220]):
“5. The policy, the written application therefor, if any, and any rider or indorsement which does not conflict with the provisions of this chapter, shall constitute the entire contract between the parties.”
The trouble with plaintiff’s contention is that it is factually misplaced. That, which in section 520 the legislature referred to as “this chapter,” is chapter 5 of the vehicle code of 1949 (Act No 300). The chapter is headed “financial responsibility act.”
Its terms applicable to liability insurance refer only to policies furnished pursuant to that chapter; whereas the first and second Wargo policies were contracted for and issued, not by force of any statutorily coerced “proof of financial responsibility” but by the right of free contract limited only by the insurance code of 1956, as amended. To be precise, said section 520 applies only when “proof of financial responsibility for the future” (see heading which immediately precedes sections 511 through 528 of the vehicle code) is statutorily required, a situation not presently before the Court.
The point is governed by the insurance code (CLS 1961, § 500.10Ó
et seq.
[Stat Ann 1957 Rev § 24.1100
'et seq.)).
There, corresponding with
Eghots,
no provision appears which in any way limited the right of Frankenmuth and Mrs. Wargo to contract as they
did by indorsement and agreed carry-over of sncb indorsement. We proceed:
It is significant that the legislature, on at least eight specific occasions appearing in the insurance code, chose to require an “entire contract between the parties” clause. Such specific occasions were section 2226 (life insurance); section 3407 (disability insurance); section 3608 (group disability insurance) ; section 3640 (blanket disability insurance); sections 4004 and 4014 (life and annuity contracts); section 4210 (industrial life insurance) and section 4434 (group life insurance). But when the reader comes to chapter 30 of the code (CLS 1961, § 500.3004
et seq.
[Stat Ann 1957 Rev § 24.13004
et seq.]),
dealing with casualty insurance contracts, he finds no such requirement. This is a clear instance then, for application of the rule
exclusion.
As in
Eghots,
Mrs. Wargo and the insurer were left by the insurance code free to contract as was done by the quoted restrictive indorsement. That contract is not shown as having been contrary to Michigan’s public policy as same stood prior to the legislative session of 1965.
Having decided that the indorsement was valid as against plaintiff’s reliance upon the quoted portion of said section 520, an important feature of the stated question remains for answer. The garnishee asserted and the trial judge denied that the second policy was a “renewal” within meaning and purpose
of the aforesaid indorsement. The issue thus recorded has prompted a series of questions which, through our clerk, were propounded for answer by counsel shortly after oral argument of the case. The questions:
“(a)
What proof by affidavit or document was before the trial judge on the basis of which it may be ruled summarily that the second policy was (or was not) a ‘subsequent renewal’ of the first policy?
“(b) May the Court safely assume that Mrs. Wargo did not apply in writing for the second policy? If there was such an application, would it not likely disclose that the policy to be issued would (or would not) constitute a ‘subsequent renewal’ within contemplation of the indorsement?
“(c) Is it claimed by the insurer that the words ‘restrictive indorsement,’ typed as they are into the second policy, are sufficient to render the second policy a ‘subsequent renewal’ of the first policy?
“(d) Generally, what of
present
record will justify
Free access — add to your briefcase to read the full text and ask questions with AI
Per Curiam.
See
Burch
v.
Wargo,
1 Mich App 365. Upon leave granted the plaintiff administrator reviews determination by the Court of Appeals that the “Restrictive Indorsement” of the first policy excluded liability of the garnishee for payment of the judgment entered in the principal suit.
The indorsement on its face is free from ambiguity or doubt.
The consequential question is whether the insurer and the insured agreed
with pertinent effectiveness
that “the terms of this indorsement shall remain applicable upon any subsequent renewal or renewals of this policy.” Preliminary to review of this question it is noted (a) that no contention is made that the indorsement was “with
drawn” upon “mutual consent” prior to the time plaintiff’s cause against the principal defendant arose, and (b) that plaintiff does not claim — aside from reliance upon presently considered section 520 of the vehicle code — that the carry-over clause of the indorsement was invalid. (For a discussion and citation of authorities concerned generally with this question, see annotation headed “Motor vehicle insurance: exclusionary provision relating to age of operator”; 83 ALR2d 1236.)
The closely analogous principles laid down in
Eghotz
v.
Creech,
365 Mich 527 are fully applicable here. Unless some provision of statute or known rule of public policy has ordained otherwise, the parties were entitled to and did validly contract that the exclusion of coverage, when the designated minor son was driving the insured automobile, would until “withdrawn” carry over and become a part of any identifiable-as-such “renewal or renewals of this policy.”
In
Eghotz
the question was whether specific provisions appearing in an automobile liability policy, for automatic suspension of coverage for nonpayment of premium, prevailed over claim that section 3020 of the insurance code (CLS 1961, §500.3020 [Stat Ann 1957 Rev §21.13020]) required written notice of cancellation as a condition of such suspension. Holding that they did, the Court provided an appropriate introduction to analysis of our stated question:
“If the provisions of the statute exclude any other method for the cancellation or suspension of a casualty insurance policy, the trial court was in error. If the provisions of the statute do not exclude a time-payment indorsement, then the decision of the trial judge was correct.
“The early Michigan cases laid down the proposition that a policy of insurance is much the same as
any other contract. It is a matter of agreement by the parties. The courts will determine what that agreement was and enforce it accordingly.” (p 530)
From this generally settled observation we turn to plaintiff’s reliance upon that part of said section 520 which reads (CLS 1961, §257.520 [Stat Ann 1960 Rev § 9.2220]):
“5. The policy, the written application therefor, if any, and any rider or indorsement which does not conflict with the provisions of this chapter, shall constitute the entire contract between the parties.”
The trouble with plaintiff’s contention is that it is factually misplaced. That, which in section 520 the legislature referred to as “this chapter,” is chapter 5 of the vehicle code of 1949 (Act No 300). The chapter is headed “financial responsibility act.”
Its terms applicable to liability insurance refer only to policies furnished pursuant to that chapter; whereas the first and second Wargo policies were contracted for and issued, not by force of any statutorily coerced “proof of financial responsibility” but by the right of free contract limited only by the insurance code of 1956, as amended. To be precise, said section 520 applies only when “proof of financial responsibility for the future” (see heading which immediately precedes sections 511 through 528 of the vehicle code) is statutorily required, a situation not presently before the Court.
The point is governed by the insurance code (CLS 1961, § 500.10Ó
et seq.
[Stat Ann 1957 Rev § 24.1100
'et seq.)).
There, corresponding with
Eghots,
no provision appears which in any way limited the right of Frankenmuth and Mrs. Wargo to contract as they
did by indorsement and agreed carry-over of sncb indorsement. We proceed:
It is significant that the legislature, on at least eight specific occasions appearing in the insurance code, chose to require an “entire contract between the parties” clause. Such specific occasions were section 2226 (life insurance); section 3407 (disability insurance); section 3608 (group disability insurance) ; section 3640 (blanket disability insurance); sections 4004 and 4014 (life and annuity contracts); section 4210 (industrial life insurance) and section 4434 (group life insurance). But when the reader comes to chapter 30 of the code (CLS 1961, § 500.3004
et seq.
[Stat Ann 1957 Rev § 24.13004
et seq.]),
dealing with casualty insurance contracts, he finds no such requirement. This is a clear instance then, for application of the rule
exclusion.
As in
Eghots,
Mrs. Wargo and the insurer were left by the insurance code free to contract as was done by the quoted restrictive indorsement. That contract is not shown as having been contrary to Michigan’s public policy as same stood prior to the legislative session of 1965.
Having decided that the indorsement was valid as against plaintiff’s reliance upon the quoted portion of said section 520, an important feature of the stated question remains for answer. The garnishee asserted and the trial judge denied that the second policy was a “renewal” within meaning and purpose
of the aforesaid indorsement. The issue thus recorded has prompted a series of questions which, through our clerk, were propounded for answer by counsel shortly after oral argument of the case. The questions:
“(a)
What proof by affidavit or document was before the trial judge on the basis of which it may be ruled summarily that the second policy was (or was not) a ‘subsequent renewal’ of the first policy?
“(b) May the Court safely assume that Mrs. Wargo did not apply in writing for the second policy? If there was such an application, would it not likely disclose that the policy to be issued would (or would not) constitute a ‘subsequent renewal’ within contemplation of the indorsement?
“(c) Is it claimed by the insurer that the words ‘restrictive indorsement,’ typed as they are into the second policy, are sufficient to render the second policy a ‘subsequent renewal’ of the first policy?
“(d) Generally, what of
present
record will justify
present
determination that the second policy was (or was not) a ‘subsequent renewal’?
“(e) Finally, do counsel agree that the foregoing questions are ready for determination on the record made before Judge Moore, pursuant to GCft 1963, 117? (Note in such connection Mr. Girard’s repeated contention that the record presents fact issues, 35a, 38a, 47a).”
The respective answers of counsel are agreeable in one respect, that is, they have stipulated that there are “no material issues of fact to be determined.” The result is that the case is due now for summary judgment upon a record presenting three conclusions of controlling force.
The first is that the garnishee was shown by plaintiff’s motion for summary judgment as having been
prima facie
liable for payment of the judgment entered in the principal suit. This follows since the
second policy contains no relevant restriction of liability and no words indicative of intent that the second policy was or would constitute a “renewal” of the first.
The second is that the garnishee bore and yet bears the burden of establishing its affirmative defense ; that of no liability on account of legal effectiveness — as against plaintiff’s judgment in the principal suit — of the restrictive indorsement.
The third is that the garnishee has failed to establish, or to offer proof of the fact, that the second policy was a “renewal” of the first policy.
To conclude:
There being no application by Mrs. Wargo for the second policy, in writing or otherwise so far as we are advised, and no words in the second policy showing or tending to show that it was a “renewal” of the first rather than a new and distinct policy, and the terms of coverage and amount of aggregate premium as between the two policies being somewhat variant, we are obliged to hold that the garnishee has failed to meet plaintiff’s motion for summary judgment with proof by affidavit of fact or produced document that the second policy was a “renewal” of the first.
The result effected by the record made in circuit,
supplemented by the aforesaid declarations of counsel that there are no issues of fact to be determined, is the same as if the issue had gone to trial upon that record with neither party submitting proof over and above the affidavits for and against summary judgment. The case having reached this Court in that agreed posture, we accept the record accordingly and determine for foregoing reasons that the
garnishee bas failed to sustain the defense it has asserted and ■ that the circuit judge was right in-entering judgment against the garnishee.
The judgment of the Court of Appeals is reversed. That court will enter a judgment affirming the judgment of the circuit court. Costs of all courts to plaintiff.
T. M. Kavanagh, C. J., and Dethmers, Kelly, Black, Souris, Smith, O’Hara, and Adams, JJ., concurred.