McFarland v. New Zealand Insurance

California Court of Appeal Dec 18, 1959 No. Civ. 6253Published

Before: Monroe

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Holding. The court held that an automobile liability insurance policy containing a restrictive endorsement limiting coverage to accidents occurring within the boundaries of a military reservation is valid and enforceable when the insured is not subject to the Financial Responsibility Law.

Issues

Whether an insurance policy endorsement limiting coverage to accidents occurring within a military reservation is valid and enforceable under California law.
Whether the California Financial Responsibility Law prohibits the issuance of an automobile liability policy restricted to operation within a military reservation.

Disposition. affirmed

Quotations verified verbatim against the opinion

“It is well established that an insurance contract may be limited with respect to the coverage or liability by an endorsement.”

“It follows, therefore, that in the state of the law as it existed at the time of the issuance of the policy in question the limitation contained in the endorsement was valid and binding and plaintiffs could not maintain this action.”

[423]

MONROE, J. pro tem.

This action was brought by the plaintiffs to collect a judgment theretofore rendered against one Robert E. Lewis from the defendant insurance company. This appeal is taken from a judgment rendered in favor of defendant company.

The facts involved are that in November, 1955 the defendant insurance company issued its policy of automobile liability insurance covering an automobile owned by Robert E. Lewis. The policy limits were $5,000 for injury to any one person, $10,000 for injuries to more than one person, and $5,000 property damage. It appears that Lewis was in the military service and that an order had been issued that personnel could not operate automobiles upon the military base unless their operation was covered by indemnity insurance. Defendant company, for a nominal premium, issued the policy in question, which contained the following restrictive endorsement :

1. The insurance applies only to accidents which occur while the automobile is within boundaries of any military post, camp, cantonment or reservation.

2. The insurance shall hot be construed to comply with the motor vehicle financial responsibility law of any state or province.

The case was tried upon an agreed statement of facts. It was stipulated that the plaintiffs received injuries as a result of the operation of the insured automobile upon a public highway in California and not within any military camp or reservation. An action was brought against Lewis for damages and upon his default a judgment was rendered in the exact amount of the face of the policy. The defendant insurance company denied liability and this action followed.

Section 415 of the Vehicle Code is a part of the Financial Responsibility Law of California which provides in substance that under certain Circumstances the owner of an automobile must procure insurance and post the same. Section 415 provides that such policy shall meet certain requirements. One of the provisions is that:

‘1 Such policy shall insure every said person on account of the maintenance, use or occupation of every motor vehicle therein covered within the continental limits of the United States against loss from the liability imposed by law arising

McFarland v. New Zealand Insurance

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