Summary
In Garden City Cab Co. v. Fidelity Cas. Co. of New York, 80 Ga. App. 850, 57 S.E.2d 683 (1950), a cancellation of a policy was held effective as against the insured even though the statutory period had not expired, and a petition by the insurer to recover from the insured a sum paid to an injured member of the public was held to state a cause of action, under a provision similar to that contained in the endorsement involved in the present case.
Summary of this case from Erie Ins. Exchange v. GosnellOpinion
32874.
DECIDED FEBRUARY 9, 1950.
Complaint on automobile insurance policy; from Savannah City Court — Judge MacDonell. November 15, 1949.
Wylly Javetz, for plaintiff in error.
Anderson, Connerat, Dunn Hunter, B. B. Cubbedge Jr., contra.
1. A petition based on a written contract which is not attached thereto and made a part thereof is not subject to general demurrer. Such defect is amendable and can be taken advantage of only by special demurrer.
2. Construing the compulsory-insurance ordinance of the City of Savannah in conjunction with the two endorsements on the insurance policy in the within case, it was clearly the intention of the parties that upon cancellation of the insurance policy in accordance with its terms, as between the insurer and the insured, without giving notice to the proper city authorities, the policy continued of force and effect for the protection of the public, but not for the protection of the insured.
DECIDED FEBRUARY 9, 1950.
The defendant in error Fidelity and Casualty Company of New York, herein referred to as the plaintiff, filed suit against the Garden City Cab Company Incorporated, in the City Court of Savannah, alleging in substance: that on January 1, 1948, the plaintiff issued a policy of automobile-liability insurance covering the taxicabs used in the defendant's business; that on June 3, 1948, it mailed notice of cancellation of said policy to the defendant, such cancellation to become effective on June 10, that it notified the defendant the unearned premium was being returned; that on June 30, one Harold Johnson was injured by a taxicab belonging to the defendant and that his claim was settled by the insurance company in the amount of $1500 because of its liability under Sec. 59-102 of Grayson's Code of the City of Savannah, which provides in part that all taxicab operators must take out specified liability before issuance of a license to them; that any person sustaining actionable injury by the operation of any taxicab shall have the right to join the insurance company or the surety on its bond with the defendant, and that "before said bond or policy is voided for any cause, nonpayment or otherwise, notice thereof shall be given in writing to the Clerk of Council of the City of Savannah at least 5 days before the same shall take effect." The petition further alleges that the policy in question contained a statutory form of endorsement relating to the requirements above set forth, except that the statutory endorsement does not contain the provision relative to the 5-day notice to the Clerk of Council of the City of Savannah which is incorporated in the ordinance. A second endorsement was then added to the policy reading as follows: "Such insurance as is afforded by this policy has been extended by a prescribed statutory form of endorsement which imposes certain obligations upon the company not contained in the policy without such prescribed endorsement. All the terms and conditions of the policy shall remain in full force and be binding as between the company and the insured; and the insured agrees to reimburse the Company for all losses, costs and expenses, paid or incurred by the Company which the Company would not have been obligated to pay independently of such prescribed statutory endorsement." The defendant taxicab company filed a general demurrer to the petition of the insurance carrier, seeking reimbursement for the amount paid out to the injured party under the above endorsement, which demurrer was overruled by the trial court, and the judgment overruling the demurrer is assigned as error.
1. Complaint is made in the briefs of counsel of the failure of the plaintiff to set out in his petition the statutory endorsement under the compulsion of which it paid the claim in question. The petition is defective in this regard under Code § 81-105, which requires the setting out of the instrument on which the cause of action is based. Such defect, however, is amendable, and is not reached by a general demurrer. Gonackey v. General Accident Fire c. Assur. Corp., 6 Ga. App. 381 (3) ( 65 S.E. 53).
2. It is admitted that the statutory endorsement adopted by the City of Savannah, which was intended to conform to Sec. 59-102 of the municipal code and which was incorporated in the policy in question, provided that the insurance company consented to be joined as party defendant with the insured taxicab operator in any suit brought by a member of the public against the latter. It is admitted that by the terms of the ordinance no policy could be canceled without 5-days notice to the clerk of city council, and that the ordinance does not specify by whom this notice should be given, but that it was not actually given by either party. It is also conceded by counsel, so far as this demurrer is concerned, that the company had the right, under the terms of the policy, to settle the claim in question, and that had it not done so the injured party could have joined both companies and obtained a judgment against both. The question is whether, in view of these facts, the insurance company has a right to be reimbursed by the defendant under the terms of its second endorsement, which provides for reimbursement of all losses "which the company would not have been obligated to pay independently of such prescribed statutory endorsement." It is argued that the endorsement does not refer to that part of the Savannah code which provides for 5-days notice to the clerk of council, and that the reimbursement clause refers only to losses which the company would not have to pay except for the endorsement on the policy, and for that reason the defendant has no liability for the sums so paid out. Admitting that the statutory form of endorsement was loosely drawn, it was nevertheless the form required by ordinance to be used. Obviously it was intended to comply with the compulsory-insurance ordinance and its only purpose was to embody the statutory provisions within the policy itself.
Code § 20-702 provides as follows: "The cardinal rule of construction is to ascertain the intention of the parties. If that intention be clear, and it contravenes no rule of law, and sufficient words be used to arrive at the intention, it shall be enforced, irrespective of all technical or arbitrary rules of construction." To ascertain the intention of the parties it is necessary to construe both endorsements in conjunction with the ordinance. To give all the manifest meaning intended, the construction here adopted is the only plausible one. The policy of insurance at the time of the injury to the member of the public had been canceled and the premium returned. It was therefore in force only insofar as was required by the ordinance which prevented the taxicab company from operating without the required bond. Clearly the endorsements when construed in conjunction with the ordinance as herein outlined leave the bond in force only for the protection of the public and not for the protection of the insured, and such was manifestly the intention of the parties. The consent of the insurance company to be sued with the insured implies a consent on the part of both to abide by the terms of the ordinance. This being so, the second endorsement which refers to "losses which the company would not have been obligated to pay independently of such prescribed statutory endorsement" can mean only the endorsement as interpreted in the light of the ordinance. Except for the ordinance there was no liability on the part of the insurance company after it had canceled the policy in accordance with its terms and had refunded the unearned premium. Except for the ordinance the insurance company could not have been sued in the same action with the insured by a member of the public. Except for the ordinance the plaintiff, after it had canceled the policy in accordance with its terms, would have had no interest in any subsequent claim against the insured and would not have adjusted the same. Unless the second, or indemnity clause, endorsement refers to increased liability under the ordinance, in pursuance of which the first endorsement was drawn, it would not effect the intention of the parties in relation thereto. Consequently, when the liability of the insurance company ceased under the terms of the original policy, any liability incurred thereafter under the provisions of the city ordinance was such a liability as might be recovered by it under the indemnity endorsement. The petition to recover this amount set out a cause of action. See in this regard, American Fidelity Casualty Co. v. Big Four Taxi Co., 111 W. Va. 462 ( 163 S.E. 40); Amalgamated Casualty Insurance Co. v. Winslow, 135 Fed. 2d, 663; Travelers Ins. Co. v. Ship by Truck Co., 95 Fed. 2d, 149; Illinois Casualty Co. v. Krol, 324 Ill. App. 478 ( 58 N.E.2d, 473). Ohran v. National Automobile Ins. Co. (Cal.App.), 187 P.2d 66), relied upon by the defendant, is easily distinguishable on its facts. In this case the insured returned its policy for cancellation as of March 15, but was informed by the agent of the insurance company that, due to the necessity of giving a 10-day statutory notice, the policy was not cancellable until such notice expired on March 26, to which the insured agreed and paid a premium for the 10-day extension. In that case the policy remained in force, by agreement between the parties, beyond the date of the accident, which occurred on March 22. In the present case the policy was not in force, as between the parties, on the date of the accident. It was only in force insofar as members of the public generally were concerned. This case, in consequence, gives us no authority to reverse the judgment of the trial court.
The petition as amended set out a cause of action and the court did not err in overruling the general demurrer interposed thereto.
Judgment affirmed. MacIntyre, P. J., and Gardner, J., concur.