Case Name: Margie Hill et al., Respondents, v. Rudolph V. Johnson et al., Defendants; Hartford Accident and Indemnity Co., Respondent; and William Quick et al., Appellants; Freda Morrow, Respondent, v. Rudolph V. Johnson et al., Defendants; Hartford Accident and Indemnity Co., Respondent; and William Quick et al., Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1970-12-21
Citations: 35 A.D.2d 407
Docket Number: 
Parties: Margie Hill et al., Respondents, v. Rudolph V. Johnson et al., Defendants. Hartford Accident and Indemnity Co., Respondent; and William Quick et al., Appellants. Freda Morrow, Respondent, v. Rudolph V. Johnson et al., Defendants; Hartford Accident and Indemnity Co., Respondent; and William Quick et al., Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 35
Pages: 407–412

Head Matter:
Margie Hill et al., Respondents, v. Rudolph V. Johnson et al., Defendants. Hartford Accident and Indemnity Co., Respondent; and William Quick et al., Appellants. Freda Morrow, Respondent, v. Rudolph V. Johnson et al., Defendants; Hartford Accident and Indemnity Co., Respondent; and William Quick et al., Appellants.
Second Department,
December 21, 1970.
Raymond J. MacDonnell (Philip Hoffer, Rose L. Hoffer and Peter T. Affatato of counsel), for appellants.
Schaffner & Schilling (Joseph L. Schilling of counsel), for Hartford Accident and Indemnity Company, respondent.

Opinion:
Munder, J.
In these consolidated actions the appeal is from a judgment which declared that (1) on September 2, 1967 there was no automobile liability insurance policy in effect issued to the defendant Johnson by the defendant Hartford Accident and Indemnity Co. ("Hartford") and thus no obligation on the latter to defend or pay in certain other actions by the plaintiffs arising out of an automobile accident involving Johnson which occurred on that date; (2) there was a valid automobile liability insurance policy in effect on that date, issued to the defendant Quick by the defendant Empire Mutual Insurance Co. ("Empire"); and (3) by reason of the uninsured motorist indorsement on the latter policy Empire was obligated to accept the plaintiffs' claims.
The essential facts are not disputed. On or about April 15, 1966 the defendant Rudolph V. Johnson applied to the defendant James F. Smith, Inc. ("Smith") for an automobile liability insurance policy. Smith was a broker-producer for seven insurance companies, including Hartford and the -Etna Casualty and Surety Company (".Etna"). The normal procedure in the Smith office was to telephone the insurer with whom the policy was sought to be placed to ascertain whether the prospective insured was an acceptable risk. If so, Smith would accept the insured's application and issue him a certificate of insurance (form FS-1). The certificate would then be presented to the State Motor Vehicle Bureau as " proof of financial security " so that the motor vehicle in question could be registered and license plates issued (see Vehicle and Traffic Law, § 312).
In Johnson's case, a Smith employee telephoned -Etna to place the order, Johnson was accepted, and .Etna issued him a policy. However, the Smith employee erroneously gave Johnson an FS-1 form which indicated that Hartford was the insurer. Apparently the error stemmed from the fact that Smith had been sup plied with FS-1 forms by several insurers. These forms were alike except for the name of the insurer. Thus, a Hartford form was filled out for Johnson and filed with the Motor Vehicle Bureau. But no policy was ever ordered from Hartford for Johnson; and Hartford never issued him any policy.
Johnson obtained his license plates on April 20, 1966. The -¿Etna policy, running from April 15, 1966 to April 15, 1967, was sent to Smith, which notified Johnson that the policy could be picked up when paid for. Johnson never paid and ¿Etna terminated the policy effective July 1, 1966. Johnson was notified of the termination and, in addition, ¿Etna filed an FS-4 form (Notice of Termination of Insurance). Nothing was done, however, to cancel the Hartford FS-1 certificate.
More than a year later, on September 2, 1967, the plaintiffs were injured while passengers in a motor vehicle owned and operated by the defendant William Quick. The Quick vehicle collided at a Brooklyn intersection with the vehicle owned by Johnson but driven by someone else. At the time, Quick's vehicle was insured by the defendant Empire Mutual Insurance Go. ("Empire") and the latter's policy contained the standard uninsured motorist indorsement.
The Special Term held that it was this indorsement to which the plaintiffs must look for recovery; and in my opinion the holding was correct.
The appellants, Empire and Quick, take the position that the FS-1 certificate of insurance is the equivalent of an automobile liability policy and that Hartford is therefore liable to defend and pay because of its failure to cancel the FS-1 filed by Johnson. I note parenthetically that the plaintiffs took this same position at the Special Term but have not appealed that court's rejection of it. To support their claim, the appellants rely upon Teeter v. Allstate Ins. Co. (9 A D 2d 176, affd. 9 NT 2d 655).
The holding in Teeter, namely, that the defendant insurer's common-law right of rescission ab initio for fraud did not survive the enactment of section 93-c of the Vehicle and Traffic Law (now § 313), is of little help to the appellants (see Teeter v. Allstate Ins. Co., supra, pp. 180, 185). They cite Teeter, however, for the following statement taken from the opinion (supra, p. 181): " Once a certificate of insurance under section 93-b has been issued by the insurance company and filed with the Commissioner, the contract of insurance ceases to be a private contract between the parties. A supervening public interest then attaches and restricts the rights of the parties in accordance with the statutory provisions " (emphasis added). I emphasize the phrase '1 contract of insurance ' ' because that is what the instant case is all about and that is what completely undermines the appellants' position. A certificate of insurance is not a contract of insurance. A certificate of insurance, as subdivision 5 of section 311 of the Vehicle and Traffic Law clearly states, is merely evidence that a contract has been issued. At bar, Hartford never issued a contract to Johnson and neither Teeter nor any other authority cited by the appellants even suggests that Hartford is barred from showing that fact. The appellants, in effect, seek to use the certificate of insurance as a basis for independent liability. This cannot be done. The certificate is conditioned upon the issuance and existence of a policy (see Reese v. Hartford Acc. & Ind. Co., 4 Misc 2d 947, 948, affd. 3 AD 2d 1000).
Under the facts at bar, on the day of the accident, Johnson's car was being operated illegally (see Teeter v. Allstate Ins. Co., supra, p. 185). More than a year prior thereto, the liability policy on this automobile was terminated by -¿Etna; and Johnson was so notified. He did not surrender his certificate of registration and license plates. His vehicle was, therefore, specifically within the purview of the Motor Vehicle Accident Indemnification Corporation Law (Insurance Law, art. 17-A) namely, ' ' motor vehicles registered in this state as to which at the time of the accident there was not in effect a policy of liability insurance " (Insurance Law, § 600, subd. [2], cl. 3). This clearly makes applicable the uninsured motorist indorsement in Quick's policy with Empire.
The appellants also urge estoppel as a basis for holding Hartford liable, citing Downing v. Allstate Ins. Co. (43 Misc 2d 215). I fail to see any grounds for estoppel here. Estoppel rests on the word or deed of one, on which another rightfully relies, changing his position to his injury (see Triple Cities Constr. Co. v. Maryland Cas. Co., 4 N Y 2d 443). Here, Hartford neither said nor did anything to cause the other parties involved to change their positions. It issued no policy and it learned of the mistake regarding the PS-1 form only months after the accident. At the time of the accident, Johnson's policy with AEtna had been terminated for over a year and Johnson knew it.
The judgment appealed from should be affirmed, with costs to the respondent Hartford Accident and Indemnity Co.