269 N.W. 607 | Mich. | 1936
This cause is before us on appeal on an agreed statement of facts, as follows:
"On December 28, 1934, the Central Mutual Insurance Company of Chicago issued its policy X84796 to Earl C. Smith, Inc., and/or Earl C. Smith and/or its corporate officers, insuring them against loss and liability imposed by law for damage on account of bodily injury or property damage caused by or through the ownership, maintenance or operation of *585 any automobile described in the schedule referred to in said policy, which policy is plaintiff's Exhibit 'A' and contained an indorsement thereon as follows:
" 'The term "named assured" shall be construed to include the interests of the owners and operators of hired trucks, tractors, trailers and/or semi-trailers and/or independent contractors, but only while such commercial trucks, tractors, trailers and/or semi-trailers are being operated in the interest of or under contract to the "named assured." '
"This policy was issued on a gross receipt basis, that is, the premium was determined by a percentage of the gross earnings received by Earl C. Smith, Inc., for freight hauled by its hired equipment.
"The policy also contained an indorsement pursuant to rule No. 19 of the Michigan public utilities commission rules and regulations as follows:
" 'The policy to which this indorsement is attached shall cover all vehicles operated by the policy holder under the authority of the certificate or permit duly issued by the commission. Such coverage shall obtain regardless of whether or not such vehicles are properly described in the policy and shall also cover vehicles operated under the special provisions of rule No. 32 regarding special emergency equipment.'
"No policy was ever issued to Frank Marshall and he did not pay any premium to the Central Mutual Insurance Company of Chicago. The premium was paid by Earl C. Smith, Inc.
"On July 23, 1935, Frank Marshall, as an independent contractor, was hauling freight in his own tractor and trailer for Earl C. Smith, Inc., by virtue of authority granted to Earl C. Smith, Inc., by the Michigan public utilities commission. On that date Frank Marshall, while operating his equipment, was involved in a collision at the intersection of Eight Mile and Dequindre roads in Oakland county, with a Chevrolet automobile owned and operated by George P. Wilson, and the latter suffered personal injuries and his automobile was damaged. On this date the policy aforementioned was in full force and effect. *586
"George P. Wilson commenced suit against Earl C. Smith, Inc., in the common pleas court for the city of Detroit, for damages arising out of the collision aforesaid, and recovered a judgment, but upon appeal to the circuit court for the county of Wayne, the judgment was reversed and a judgment of no cause of action was entered in favor of Earl C. Smith, Inc., because Frank Marshall was an independent contractor at the time of the collision. In this suit Earl C. Smith, Inc., was represented by Freedman Drexelius, its attorneys.
"Thereafter George P. Wilson commenced suit in the common pleas court for the city of Detroit against Frank Marshall for damages arising out of the collision aforesaid. In this suit George P. Wilson recovered a judgment against Frank Marshall in the sum of $500 and $11.20 costs. Frank Marshall was represented by Freedman Drexelius, his attorneys. This is the judgment in the principal case and is unpaid.
"At the close of the testimony, plaintiff made a motion for a judgment in his favor, and the garnishee defendant made a motion for judgment in its favor."
The court rendered judgment in favor of plaintiff against the said garnishee defendant in the sum of $500 and costs, from which the garnishee defendant appeals.
Counsel for appellant contend in their brief, that plaintiff's claim, if any, is "only a derivative claim and he can only enforce such right of action against the insurance company (garnishee defendant) as Frank Marshall (principal defendant) could have enforced." This contention is based upon our holding in Musser v. Ricks,
"Plaintiff's right to recover against the garnishee defendant is dependent on the principal defendant's right to so recover." *587
Appellant then contends that Frank Marshall (defendant) has no claim against the insurer (garnishee defendant) because there is no privity of contract between Marshall and the insurance company — that the insurance contract is between Earl C. Smith, Inc., and the insurance company — and, to quote appellant's counsel, "under the settled law of Michigan, Frank Marshall cannot bring an action at law against" the insurance company. Counsel cite as authority for its contention the cases of Tapert v. Schultz,
In Peterson v. Maloney (Maryland Casualty Co., garnishee)
In speaking of such coverage, the court in Ocean Accident Guarantee Corp. v. Bear,
"The additional assured or omnibus clause covers a group of persons who may or may not have an insurable interest at the time the policy is written. If within the defined group, it is sufficient that at the time of the accident such person is in position to become legally liable for injury to others."
In Bachman v. Independence Indemnity Co.,
"Broader language could hardly have been used in the policy. If the insurer desired to place any limitations upon its liability to cover this situation, it had the opportunity to do so. Having prepared its policy, any ambiguity, if one exists, must be construed against the company." (Citing cases.)
See, also, Stovall v. New York Indemnity Co.,
Finding ourselves in accord with this line of decisions, we hold, in the instant case, that the principal defendant, Marshall, was covered by the omnibus provision of the policy here involved, and therefore *589 entitled to its protection and benefits. It is such a right that could be enforced by Marshall in an action at law, and therefore the subject of garnishment.
The judgment of the circuit court is affirmed, with costs to plaintiff.
NORTH, C.J., and FEAD, WIEST, BUTZEL, BUSHNELL and SHARPE, JJ., concurred. POTTER, J., did not sit.