Sumner v. Travelers Indemnity Co.

Sybert, J., delivered the opinion of the Court. On October 5, 1962, the appellants, Walter Lee Sumner and Ruby Lee Sumner, his wife, filed a declaration seeking a declaratory judgment in the Circuit Court for Montgomery County against the appellee, The Travelers Indemnity Company (Travelers), and the Unsatisfied Claim and Judgment Fund Board. The declaration alleged as follows. Since 1957, Travelers had insured the appellants against personal liability arising out of the use of their automobiles.

The necessary transactions were carried on through the company’s agent, C. D. James, until March 1962, at which time James informed the appellants that he was no longer Travelers’ agent and that their account would thereafter be handled by a new agent, John Novak. The appellants contacted Novak and were informed by him that he was Travelers’ agent and would be handling their account. On March 7, 1962, the appellants went to see Novak and obtained from him UCJ-1 forms 1 , certifying that as of that date they ⁴⁸² were insured by Travelers against personal liability resulting from use of their automobile. The appellants thereafter used the UCJ-1 forms obtained from Novak to procure license plates and registration cards for their automobiles.

On March 9, 1962, the appellant, Walter Lee Sumner, was involved in an automobile accident which resulted in the death of a pedestrian. Shortly after the accident he contacted Novak and was informed, for the first time, that his policy had expired on June 19, 1961, due to non-payment of premium. The appellants denied having received any notice of cancellation or of premiums due, and claimed that they were under the impression that their previous policy was still in force and that the premiums were current. The declaration then alleged that because of these facts, Travelers was estopped from denying the existence of a policy insuring the appellants at the date of the accident.

It was then prayed that the court enter a declaratory judgment “as regards the question of the existence of a policy * * * and as regards any obligation * * * to insure * * * against loss due to automobile accident, said obligation being created by estoppel.” Travelers filed an answer to the declaration in which, inter alia> it denied that Novak was its agent in matters of casualty or automobile liability insurance, or authorized to act as alleged, and further asserted that there was no policy of insurance in existence at the time of the accident, and that no authorized agent had issued UCJ-1 forms to the appellants, as alleged in the declaration. After taking the deposition of the appellant, Walter Lee Sumner, Travelers filed a motion for a summary judgment based on the fact that the last policy of insurance issued to the appellants had expired on June 19, 1961, and on Sumner’s admissions in his deposition that he had not paid premiums subsequent to that date, and that he realized if he did not pay premiums, he would not be covered by insurance. The appellants filed an affidavit and statement in opposition to the motion for summary judgment, but, after a hearing, the lower court granted the motion “since all material facts are undisputed except for the question of agency, which is con ⁴⁸³ ceded for the