Opinion
No. 3450.
Decided February 1, 1944.
Where a liability insurance policy issued to a garage owner extended coverage to any person using the motor vehicle with the owner's permission, it was held that coverage was thereby extended to one who was driving the car at the request of a prospective purchaser to whom the car was loaned by the agent of the owner. In such case, although the driver had insurance coverage for his own car as well as extended coverage with respect to the operation of any other car by him, such extended coverage applied only if no other valid and collectible insurance was available to him; there being other collectible insurance, the extended coverage was not available to the driver nor to his passengers injured by his negligence. Nor can the provision extending coverage be construed as furnishing coverage for any amount that may be recovered in excess of that allowed by such other collectible insurance.
PETITION, for a declaratory judgment to determine whether or not the plaintiff is obligated under a motor vehicle liability policy issued to Joseph Cyr to defend certain actions at law brought against Joseph Cyr, Gerald E. Towle, and Andrew W. Daggett by Lucille Cyr, Maria Perrault, and Adelard J. Laurion for injuries sustained in an automobile accident which occurred at Rochester on May 18, 1941. The policy in question provides indemnity to Joseph Cyr for the operation of a 1936 Oldsmobile. At the time of the accident Cyr was riding (with Andrew W. Daggett as his driver) in a 1940 Oldsmobile which he had obtained from Gerald E. Towle, who was a dealer in motor cars.
The plaintiff also seeks by its petition a determination of the question whether a policy issued by it to Andrew W. Daggett, furnishing indemnity to him for the operation of his Plymouth coupe (the limits of liability being $5,000 and $10,000) covers Daggett's liability for negligence in the operation of the 1940 Oldsmobile. By the express terms of this policy coverage is extended to Daggett "with respect to the operation of any other automobile" by him, but this insurance applies "only if no other valid and collectible insurance is available" to him "as an insured under a policy applicable with respect to such non-owned automobile."
All the plaintiffs in the actions at law were passengers in the 1940 Oldsmobile. Together with Towle, Cyr, and Daggett, they are the defendants in the present proceedings.
On March 1, 1941, the Liberty Mutual Insurance Company issued to Gerald E. Towle a garage liability policy, so called, which was in effect at the time of the accident as to any motor vehicle owned by Towle, the limits of liability being $10,000 and $20,000. Under the terms of this policy coverage was extended to any person using any such motor vehicle with Towle's permission. The Liberty Mutual company and Gerald E. Towle, as defendants, filed answers and also sought therein declaratory judgments concerning their rights.
Trial by the Court (Johnston, J.), whose findings of fact and decree are as follows:
"On the afternoon of Sunday, May 18, 1941, Mr. Bilodeau, one of the salesmen of Gerald E. Towle, tried to sell to Joseph Cyr a certain 1940 Oldsmobile. Mr. Cyr was interested, and took the car for trial purposes, leaving his own, a 1936 Oldsmobile, with the agent.
"After Mr. Cyr's return, figures were discussed, and he gave the salesman ten dollars on the purchase price, for the purpose of having the car held for him until some time Monday. There was no intention that title should pass, — at least, until the following day, Monday. There was no change in the registration plates. The car was to be greased and slip covers put on before delivery. No bill of sale of the 1940 Oldsmobile was passed; nothing except the ten dollars was paid for the car; and no conditional sales agreement or other security for the balance of $440 of the price was given by Mr. Cyr. Mr. Cyr did not wish to trade on Sunday.
"After the talk concerning terms, it was agreed that Cyr should keep the 1940 car for further trial purposes, and that Bilodeau should keep the 1936 car, pending the outcome of the dealings. Cyr was told to use the 1940 car as he would his own. Then Mr. Cyr, his wife, his daughter Lucille, her fiance, Andrew W. Daggett, Marie Perrault, Robert Perrault, Eva Laurion and Andrew J. Laurion, went riding in the car. Mr. Daggett, a licensed operator, was driving, and Mr. Cyr was riding in the rear seat. The purpose of the trip was to try the car to see if Mr. Cyr should finally decide to buy it. Mr. Cyr had control of the car, and Mr. Daggett was driving at his request and as his agent. On this trip the accident happened. Title had not passed to Joseph Cyr at the time of the accident.
"The use of the 1940 Oldsmobile by both Mr. Cyr and Mr. Daggett was with the express or implied permission of Mr. Towle. The use by Mr. Daggett was not a new bailment, but was on the same bailment given Mr. Cyr by Mr. Towle's salesman, and within the terms, express or implied, of that bailment, and within the scope of the permitted use. The use by both Mr. Cyr and Mr. Daggett was a reasonable use if we consider the purpose of the bailment. Each could reasonably believe that he had the permission, express or implied, of Mr. Towle to use the car as he did. The use by Mr. Daggett was only incidentally if at all, for his benefit. The use by both Mr. Daggett and Mr. Cyr was primarily for the mutual benefit of Mr. Cyr and Mr. Towle; it was to aid in consummating the proposed deal between these two last mentioned.
"Accordingly, it is ordered and adjudged
"That the American Employers' Insurance Company is not bound to defend the actions brought against Joseph Cyr and Andrew Daggett, and is not bound to pay any final judgments rendered against said parties, by reason of the policy issued to Joseph Cyr;
"That the American Employers' Insurance Company is not bound to defend actions brought against Andrew Daggett, and is not bound to pay any final judgments rendered against him, by reason of the policy issued to Andrew Daggett, because of the statutory endorsement that the insurance applies only if no other valid and collectible insurance is available to the insured;
"That the Liberty Mutual Insurance Company is bound to defend the actions against Gerald E. Towle, Joseph Cyr and Andrew Daggett, and is bound to pay any final judgment against any or all of these parties within the policy limits."
Bills of exception, filed by the various defendants, have been allowed. The questions of law raised thereby are considered in the opinion.
Sheehan Phinney and Arthur A. Greene, Jr. (Mr. Greene orally), for the plaintiff.
Hughes Burns and Walter A. Calderwood (Mr. Calderwood orally), for Liberty Mutual Insurance Company and Gerald E. Towle.
Edward J. Lampron (by brief and orally), for Lucille Cyr, Maria Perrault, and Robert Perrault.
William H. Sleeper, for Adelard J. Laurion.
The findings of fact are unquestionably warranted by the evidence. All exceptions thereto are overruled.
The Court could properly find not only that Bilodeau had authority to permit Cyr to take the 1940 car for trial purposes but that Towle knew and approved of what he had done. Towle testified that Bilodeau took the car on Saturday night with his permission to try to sell it to Cyr; that Bilodeau came to his house at two o'clock Sunday afternoon "to talk terms" with him "about selling the car to Mr. Cyr"; that he (Bilodeau) was then driving Cyr's 1936 car; that he (Towle) informed Bilodeau of the terms on which he "thought he should do business with Mr. Cyr" and that Bilodeau left saying that he was going back to see Cyr, and that he returned about five or six o'clock and told him that Cyr had bought the car. In view of all the evidence in the case, the Court was not obliged to accept this last assertion at its face value.
Towle also testified that on the day following the accident he returned the ten-dollar deposit and the 1936 car to Cyr and later sold the wrecked car to a junk dealer. Although the Court ruled that this evidence was not binding upon the Liberty Mutual company, that company now contends that all evidence of Towle's conduct subsequent to the accident, though "very properly" restricted in its application under the rule of Aetna Life Ins. Co. v. Chandler, 89 N.H. 95, 99, 100, was prejudicial. The simple answer to this contention is that no prejudicial use of the evidence has been shown.
The other evidence to which the Liberty Mutual company excepted all had reference to the extent of Bilodeau's authority or to Towle's knowledge of the situation. It was clearly admissible. See American Employers' Ins. Co. v. Wentworth, 90 N.H. 112, 116.
At the time of the trial Bilodeau was working in Ohio and was not available as a witness. One of Towle's salesmen testified that Towle permitted his salesmen "to let customers try out the cars" for "hours at a time" and for a longer period "if the occasion necessitated it"; that they were not "given any specific instructions" as to allowing the prospective purchaser to let others, such as wife, son, or daughter, drive the car but used their "better judgment because of the fact" that they "were selling automobiles for a living" and knew their customers. On cross-examination Towle was asked, "Actually, Mr. Towle, you didn't have much objection as to who drove those cars so long as it was in your business in an effort to make a sale of the automobile?" He answered, "Well, only that they had to have a license."
This evidence renders unexceptionable the Court's conclusion that the use of the 1940 car by Daggett was within the terms, express or implied, of the bailment to Cyr, and within the scope of the use permitted by Towle. It follows that the extended coverage of Towle's policy is available to Daggett. Hence the insurance afforded Daggett by his own policy "with respect to the operation of any other automobile" does not apply.
The plaintiffs in the actions at law as well as the Liberty Mutual company excepted to the second paragraph of the decree, claiming that if the "limits" of Towle's policy "are insufficient to satisfy the damages recovered," Daggett's insurer, the American Employers' Insurance Company, is bound to defend and to pay the excess within the limits of Daggett's policy. We do not so construe the language of the provision relating to the "operation of any other automobile." Inasmuch as an amount of insurance equal to that provided by his own policy is available to Daggett under Towle's policy, he is not entitled, we believe, under a reasonable interpretation of the provision in question, to the additional coverage furnished thereby.
Exceptions overruled.
JOHNSTON, J., did not sit: the others concurred.