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ALLSTATE INSURANCE COMPANY v. STINGER (ET AL. (06/30/60)

June 30, 1960

ALLSTATE INSURANCE COMPANY
v.
STINGER (ET AL., APPELLANT).



Appeals, Nos. 155 and 156, Jan. T., 1960, from judgment of Court of Common Pleas of Delaware County, Dec. T., 1957, No. 115, in case of The Allstate Insurance Company v. George F. Stinger et al. Judgment reversed; reargument refused July 14, 1960.

COUNSEL

Paul C. Van Dyke, with him Cochrane & Van Dyke, for appellants.

James M. Marsh, with him LaBrum and Doak, for appellee.

Before Jones, C.j., Bell, Jones, Cohen, Bok and Eagen, JJ.

Author: Bok

[ 400 Pa. Page 534]

OPINION BY MR. JUSTICE BOK.

This is a petition for a declaratory judgment filed by an insurance company seeking a declaration of its rights. It issued a policy of automobile insurance to the defendant Stinger. The court below at first upheld the policy but after hearing further testimony held it void. It also disallowed the intervention of the defendants

[ 400 Pa. Page 535]

Manko, who were in collision with Stinger and who have now appealed. The Mankos were allowed to litigate the whole case, and it was only at the end that the court below refused intervention in its last order and held the policy void. Hence they have standing to appeal. Stinger has not appealed.

The case involves Stinger's negative and false answer to the following declaration, which the policy states was a representation: "10. During the past two years, with respect to the named insured... (1)... nor (2) has any license or permit to drive an automobile been suspended, revoked, or refused."

Stinger's license was in fact revoked for two months between February 23 and April 30, 1956, because he was an incompetent driver. The incompetence resulted from his being an inmate of the Emoryville State Hospital as a mental patient between January 3 and April 3, 1956. Upon certification by the hospital that he was competent to drive, his license was restored on April 30, following his discharge.

A year later, on June 27 and 28, and July 15, 1957, he had three accidents, the last of which involved the Mankos, and it was during the negotiations of these matters that the plaintiff disclaimed because of the false answer to the above declaration. The policy was issued on May 22, 1957, the application containing the declaration having been signed the day before. The policy was cancelled by the plaintiff, by letter dated August 12, because of Stinger's bad driving record. Suit was started by the defendants Manko against Stinger on December 8, 1957, and the plaintiff's disclaimer was dated December 18.

Defendants Manko contend that they are interested parties and should have been allowed to intervene. Defendant Stinger contends that his answer to the declaration, which he admits was false, was not made in

[ 400 Pa. Page 536]

    bad faith nor was it material to the risk. The plaintiff takes the opposite view.

As for the Mankos' petition to intervene, the court below at first granted it and later struck it off. This was error. The Uniform Declaratory Judgments Act of June 18, 1923, P.L. 840, § 2; 12 PS § 832, reads as follows: "Any person interested under a deed, will, written contract, or other writings constituting a contract, or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise, and obtain a declaration of rights, status, or other legal relations thereunder."

The position of the court below and of the appellee is that a stranger to the contract of insurance has no rights when the contract is void ab initio. This begs the question, since the inquiry is precisely whether the intervening Mankos are strangers and whether the contract is or is not void ab initio.

In Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 61 S. Ct. 510 (1941), the Supreme Court of the United States said: "Thus we hold that there is an actual controversy between petitioner [the insurance carrier] and Orteca [the injured third party] and hence that petitioner's complaint states a cause of action against the latter."

In Hoosier Casualty Co. of Indianapolis v. Fox, 102 F. Supp. 214 (1952), the court said, in a declaratory judgment proceeding: "It is authoritatively settled that where an insurance company asks for a declaration of non-liability or noncoverage on a policy similar to the one in question that injured persons have the same status as claimants ...


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