ADAMS ET AL. v. MARYLAND CAS. CO

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Docket Number

No. 29788.

Attorney(S)

J.A. Cunningham, of Booneville, for appellant. The appellant readily concedes that the policy provides an exception to liability when an accident happens while the truck is towing a trailer, but contends that this means nothing more than to relieve the company of liability when the injury shall in any way be contributed to by the assured's violation of the provision not to tow a trailer. If the towing of the trailer was not the proximate cause of the accident, the defendant's demurrer should have been overruled. Hossley v. Union Indemnity Company, 102 So. 561; 14 R.C.L. 1226; Townsend v. Commercial Traveler's Mutual Accident Association, 231 N.Y. 148, 17 A.L.R. 1001. Watkins, Watkins Eager, of Jackson, for appellee. The contract of insurance here sued on particularly described the motor vehicle covered thereby, and contained the express condition that no automobile covered thereby should be used for towing or propelling any trailer or any vehicle used as a trailer, and expressly provided that the policy of insurance did not cover the automobile therein described while being used for towing or propelling any trailer or any vehicle used as a trailer, and by means of an asserted waiver it is now attempted to write a new contract between the parties and extend the indemnity of the contract to cover a vehicle not covered by the original contract. There is not here involved merely a forfeiture condition or provision of the policy contract, which it is sought to avoid by reason of the acts of an agent of the insurance company constituting a waiver thereof, but it here sought to make, by waiver, a contract for the parties which they never made themselves, and by waiver to extend the contract to cover vehicles not covered thereby, and which the insurance company expressly refused to insure, and this result cannot be accomplished by means of any alleged waiver growing out of the acts of the agent of the company. Maryland Casualty Co. v. Adams, 159 Miss. 95, 96; Massie v. Washington Fidelity National Insurance Co., 153 Miss. 436, 121 So. 125; Miss. Electric Co. v. Hartford Fire Insurance Co., 105 Miss. 768, 63 So. 231. Adams, not being a party to the contract, is limited to the express provisions of the policy of equity on the application of one of the parties to the contract. Surely a mere third party cannot be heard to rely on an alleged waiver or estoppel when he was no party to the contract. It is well settled, however, that where the terms of a policy are unambiguous the court will give effect to them where not prohibited by law, and that the court will not undertake to rewrite or change a policy the parties themselves have made, so as to protect one of the parties to the contract from his own improvidence or imprudence or neglect. Jackson Steam Laundry v. Aetna Casualty Surety Co., 156 Miss. 653, 126 So. 478.

Judges

Ethridge, P.J., delivered the opinion of the court.

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Smart Summary

Factual and Procedural Background

On May 16, 1929, F.A. Falls procured a casualty insurance policy from the Maryland Casualty Company insuring a truck against liability for accidents and injuries to third persons. The truck, while being operated on a highway with a trailer attached, collided with a car owned and operated by the father of appellant R.B. Adams (a minor), and the appellant suffered serious injuries. Judgment was obtained against Falls for the injury. The present suit (and a companion suit involving Curtis E. Adams) was brought against the casualty company to recover under the policy issued to Falls.

In the chancery court of Prentiss County, a demurrer to the declaration was sustained. The present appeal is from that ruling. The court below sustained the demurrer on grounds that the policy excluded coverage while the truck was being used for towing a trailer; this appeal challenges that ruling.

Legal Issues Presented

Whether the policy provision excluding coverage while the insured automobile is "being used for towing or propelling any trailer or any vehicle used as a trailer" prevents recovery by a third person injured in a collision involving the insured truck with a trailer attached.
Whether averments that the trailer's attachment was not the proximate or causal cause of the collision (i.e., that there was no causal connection between the attachment of the trailer and the injury) are sufficient to overcome the policy's towing exclusion and defeat a demurrer.
Whether a person who is not a party to the insurance contract, but who is protected by the policy, may rely on a claimed waiver or estoppel by an agent of the insurer to extend coverage beyond the express terms of the written policy.

Arguments of the Parties

Appellant's Arguments

The appellant conceded that the policy contains an exception for accidents that occur while the truck is towing a trailer, but argued that this exception should be read to relieve the company only when the injury is in some way contributed to by the assured's violation of the no-towing provision.
Argued that if the towing of the trailer was not the proximate cause of the accident, the defendant's demurrer should have been overruled.
Cited authorities (Hossley v. Union Indemnity Company; Townsend v. Commercial Traveler's Mutual Accident Association) in support of the proximate-cause argument that an intervening cause or other negligence could render the towing exclusion inapplicable to the insurer's liability.

Appellee's (Insurer's) Arguments

The insurer emphasized the explicit contract language: the policy specifically described the motor vehicle covered and expressly provided that the policy did not cover the automobile while being used for towing or propelling any trailer or vehicle used as a trailer, unless such trailer was listed and proper premium paid.
Argued that it would be improper to permit a waiver theory to rewrite the contract and extend indemnity to vehicles not covered by the original contract; the appellee maintained that an alleged waiver by an agent cannot be used by a third party to create coverage the insurer expressly refused to provide.
Cited Mississippi authorities (including Maryland Casualty Co. v. Adams; Massie v. Washington Fidelity National Insurance Co.; Miss. Electric Co. v. Hartford Fire Insurance Co.; Jackson Steam Laundry v. Aetna Casualty Surety Co.) to support the principles that unambiguous policy terms must be enforced and that a mere third party cannot rely on an alleged waiver or estoppel to expand coverage.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Hossley v. Union Indemnity Company, 137 Miss. 537, 102 So. 561	Appellant relied on this case to support the argument that where injury was caused by the affirmative negligent act of another (and not the insured's operation), the insurer might still be liable despite factual connections to excluded conduct.	The court stated that Hossley is not applicable on the facts of the present case, although it characterized Hossley as sound on its facts (where the injury was not occasioned by the operation of a car by the plaintiff but by the negligence of the opposite party).
Townsend v. Commercial Traveler's Mutual Accident Association, 231 N.Y. 148, 17 A.L.R. 1001	Appellant cited this authority in support of its proximate-cause argument.	The court did not rely on Townsend in its decision; it appears as part of appellant's cited authorities but the opinion does not apply Townsend's reasoning to alter the result under the policy language.
Maryland Casualty Co. v. Adams, 159 Miss. 88, 131 So. 544 (companion case)	Applied in the context of demurrer sustained where truck with trailer attached caused injury and insurer was held not liable under a similar policy exclusion.	The court noted that the present case is controlled by and conforms to the holding in Maryland Casualty Co. v. Adams; the demurrer was sustained there and the present judgment is affirmed in conformity with that decision.
Massie v. Washington Fidelity National Insurance Co., 153 Miss. 436, 121 So. 125	Cited by appellee in support of the proposition that unambiguous policy terms should be enforced and that waiver cannot be used to create coverage not contracted for.	The court referenced the appellee's use of this authority to support enforcement of policy terms; the opinion does not separately analyze Massie but uses the general principle in upholding the demurrer.
Miss. Electric Co. v. Hartford Fire Insurance Co., 105 Miss. 768, 63 So. 231	Cited by appellee for the proposition that courts will not rewrite unambiguous policy provisions or extend coverage by waiver.	The court relied on the appellee's general argument grounded in such authorities; the opinion applies the contractual exclusion and sustains the demurrer accordingly.
Jackson Steam Laundry v. Aetna Casualty Surety Co., 156 Miss. 653, 126 So. 478	Cited by appellee to support the principle that courts will enforce unambiguous insurance policy terms and will not rewrite contracts to protect one party from his imprudence.	The court referenced the appellee's reliance on this principle; the court enforced the policy's exclusion for towing a trailer and sustained the demurrer.

Court's Reasoning and Analysis

The court's analysis proceeded from the express language of the policy and the factual allegations in the declaration. The insurer's policy expressly limited coverage under "Legal Liability for Damages to Property of Others" and included a clause providing that the policy "does not cover ... while said automobiles are (d) being used for towing or propelling any trailer or any vehicle used as a trailer ... unless such trailer is listed in the statements set forth" and unless the proper premium for that privilege is charged.

The court observed that the casualty company did not assume the risk of operation of the truck with the trailer attached unless the policy specifically permitted it by notation and proper premium. The plaintiff's amended averments attempted to allege that the trailer attachment had no causal connection with the collision (for example, that the truck struck the car on the wrong side of the road with such force that there was no slack created between truck and trailer). The court concluded these averments do not aid the plaintiff because the policy explicitly excluded liability for accidents occurring while the truck was being used to tow a trailer, and the insurance company did not assume that risk under the written contract.

The court reiterated the contractual principle that a person who is not a party to the contract, but for whose protection the policy provides, can stand only upon the terms of the contract. If such a person does not fit within those terms, no liability arises in his favor. The court also rejected the applicability of Hossley on the facts presented and relied on the conformity with the companion case Maryland Casualty Co. v. Adams, in which a demurrer was sustained for like reasons.

Holding and Implications

Judgment affirmed — demurrer sustained; plaintiff not entitled to recover under the policy.

Consequences: The court's decision means the appellant (R.B. Adams) cannot recover from the Maryland Casualty Company under the policy issued to Falls because the accident occurred while the insured truck was being used with a trailer attached and the policy expressly excluded coverage for such use unless the trailer was listed and additional premium paid. The decision enforces the written terms of the insurance contract as applied to this case and follows the companion decision in Maryland Casualty Co. v. Adams. The opinion does not purport to establish a broader new legal rule beyond the application of existing principles of contract interpretation and enforcement of unambiguous policy exclusions; the direct effect is to deny recovery to the appellant under the specific policy provision.

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ADAMS et al. v. MARYLAND CASUALTY CO.

1. INSURANCE.

Person not party to contract of insurance, but for whose protection policy provides, can stand only upon terms of contract.

2. INSURANCE. Person injured in collision between automobile and insured truck with trailer attached held not within terms of liability policy, precluding recovery thereon.

Insurance policy issued on truck and covering insured's legal liability to others contained provision that policy did not cover any obligation assumed by or imposed upon the assured while the automobiles are "being used for towing or propelling any trailer or any vehicle used as a trailer. . . ."

Ethridge, P.J., delivered the opinion of the court.

On May 16, 1929, one F.A. Falls procured a casualty insurance policy from the Maryland Casualty Company upon a truck against liability for accidents and injuries to himself and to third persons. This truck was being operated upon a highway with a trailer attached, and collided with a car, owned and being operated by the father of the appellant, inflicting serious injuries upon the appellant, R.B. Adams, minor, and hence this suit was brought. In a suit brought by Curtis E. Adams, who was injured in the same accident, controlled by the same facts, and reported in Maryland Casualty Co. v. Adams, 159 Miss. 88, 131 So. 544, a demurrer was sustained to the declaration holding that there was no liability against the casualty company. Judgment had been obtained against Falls for the injury, and the suit at bar and its companion suit in 159 Miss. supra, were brought against the Casualty Company to recover on the policy issued to Falls.

In the present case, it was sought to amend the declaration so as to change some averments in the declaration which was originally identical with the one in the Curtis E. Adams case, supra. In that case it was averred that the truck was engaged at the time of the accident in hauling logs with a trailer attached, and that such operation was the approximate cause of the injury. In the present case, it was stated that the truck was not loaded with logs, but was on a return trip from the place of unloading logs back to the woods to be reloaded. The trailer was attached to the truck, but it was averred in this declaration that there was no causal connection between the attachment of the trailer to the truck and the injury to the appellant for the collision occurred between the front part of the truck and the front part of the car wrecked by the collision, and that the truck was being operated upon the wrong side of the road and struck the car with such violence and force as to knock the car out of the road without creating any slack between the trailer and the truck.

The policy involved, among other things, under the head of "Legal Liability for Damages to Property of Others," provides, as follows: "Against loss from liability imposed by law upon the assured for damage (including as a part thereof loss necessarily resulting from loss of use) to property of every description (excluding property of the assured and/or property in the custody of the assured and/or property rented or leased by the assured and/or property carried in or upon any automobile of the assured, or in or upon any automobile in the custody of the assured), . . . provided that the Company's liability for such property damage shall in no event exceed the amount set forth in Clause B of Item 3 of the statements on account of any one accident. And said limit shall apply to each automobile covered hereunder. 11. The insurance provided by this Policy is hereby made available, in the same manner and under the same conditions as it is available to the named assured, to any person operating and/or to any other person while riding in, and/or to any other person, firm or corporation legally responsible for the operation of, any of the automobiles described in the statements, provided the use and operation thereof are lawful and with the permission of the named assured." In paragraph 5 of this clause, it is provided that: "This policy does not cover (1) any obligation assumed by or imposed upon the assured by any Workmen's Compensation Law, agreement or plan, unless specifically endorsed hereon, . . . while said automobiles are (d) being used for towing or propelling any trailer or any vehicle used as a trailer, (incidental assistance to a stranded automobile on the road permitted) . . . unless such trailer is listed in the statements set forth. . . . Nor in any event unless proper premium for such privilege is in the statements set forth."

It will be seen from an analysis of the provisions of the policy that the insurance company did not assume to insure the risk caused by the operation of the truck with the trailer attached unless it was permitted by notation on the policy and the proper charges made for such coverage.

We do not see how the averments set forth in this declaration aid the plaintiff in the suit, because the casualty company did not assume to insure against injuries in the operation of the truck with the trailer attached.

It was permissible for it to make the contract specifying the particulars in such policy that would afford indemnity to the insured. The plaintiff does not bring himself within the terms of the policy, and, as we understand it, one who is not a party to a contract, but for whose protection a policy provides, can stand only upon the terms of the contract, and if he does not bring himself within the terms of the contract, there is no liability in his favor.

The appellant cites and relies upon the case of Hossley v. Union Indemnity Co., 137 Miss. 537, 102 So. 561, but we do not think that case is applicable here. On the facts of that case, we think it is perfectly sound. There the injury was not occasioned by the operation of a car by the plaintiff, but was occasioned by the negligence of the opposite party doing an affirmative negligent act.

The court below having sustained the demurrer to the bill, which holding is in conformity with the present opinion, and with the case of Adams v. Maryland Casualty Co., supra, the judgment will be affirmed.

Affirmed.