Summary
In Gulla, the plaintiff was injured when he was struck by a truck driven by Reynolds, the defendant, but owned by one Straus.
Summary of this case from Frankenmuth Mutual Insurance v. SelzOpinion
No. 31457
Decided March 16, 1949.
Insurance — Automobile liability — Coverage for permissive use by third person — Applies to actual use at time of accident — Similar consent use contemplated by Ohio financial responsibility law — Section 6298-7, General Code — Coverage not afforded where use a complete departure from permission granted.
1. Under the provisions of an automobile liability insurance policy in which the coverage is extended to include a third person if the actual use of the automobile is with the permission of the named insured, such permission relates to the use to which the automobile is being put by such third person at the time of the accident.
2. A similar use is contemplated by the provisions of Section 6298-7, General Code, of the Ohio financial responsibility law, requiring that the use of such motor vehicle must be with the consent of the insured.
3. Under such provisions coverage is not afforded when the use made of the motor vehicle constitutes a complete departure from that for which permission was granted.
APPEAL from the Court of Appeals for Hamilton county.
In the Court of Common Pleas the plaintiff recovered a judgment against the defendant, Walter Reynolds, for damages for personal injuries suffered on October 11, 1944, as a result of being struck by a motor truck driven by this defendant. The judgment was not paid.
Subsequently, under the provisions of Section 9510-4, General Code, the plaintiff, in order to satisfy that judgment, filed a supplemental petition asking a judgment also against the new defendant, The Buckeye Union Casualty Company, which had issued a contract of insurance to Bernard Straus who was the owner of the truck driven by Reynolds.
At the trial on the supplemental petition the Court of Common Pleas rendered a judgment for the defendant insurance company at the conclusion of the plaintiff's evidence.
On in appeal to the Court of Appeals on questions of law the judgment of the trial court was affirmed.
The case is in this court for review by reason of the allowance of the plaintiff's motion to certify the record.
Messrs. Ginocchio Ginocchio, for appellant.
Mr. Robert G. McIntosh, for appellee.
Although there is little conflict in the evidence, the plaintiff requested the trial court to state in writing the conclusions of fact found separately from the conclusions of law. These are as follows:
"Findings of Fact
"The court finds: 1. That on July 16, 1946, a default judgment for $30,000 was rendered in favor of the plaintiff against Walter Reynolds for injuries and damage sustained October 11, 1944, when plaintiff was struck by a truck operated by Walter Reynolds.
"2. That said truck was the property of Bernard Straus and that Buckeye Union Casualty Company had issued a policy of insurance to Bernard Straus which policy contained an omnibus clause as follows:
`The unqualified word "insured" wherever used in coverages A and B and in other parts of this policy, when applicable to such coverages, includes the named insured, and, except where specifically stated to the contrary, also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the named insured. * * *'
"3. That prior to October 11, 1944, Reynolds had been working for Lucas Trucking Company and as employee for Lucas had done some hauling for Bernard Straus, a furniture dealer at 1202 Main street, Cincinnati, Ohio, operating under the name of `Main street Carpet and Furniture Co.';
"4. That on October 11, 1944, Reynolds was employed by Straus to haul some furniture in Straus' truck;
"5. That the truck was kept on a parking lot on Walnut street about one block from Straus' store and Straus gave a note to Reynolds authorizing the release of the truck to Reynolds;
"6. That Reynolds obtained the truck and one Viola Mallot to assist him and made the delivery for Straus.
"7. That on their return Straus paid Reynolds and Mallot for their services and that Reynolds then purchased a baby bed from Straus;
"8. That at about 3:00 o'clock p. m. Reynolds asked permission to use the truck to take said bed to the home of Viola Mallot a distance of about a block and a half from Straus' store;
"9. That Straus granted permission to make this delivery and instructed Reynolds to take the truck to the parking lot on Walnut street immediately after delivering the baby bed;
"10. That gasoline rationing was in effect and Straus was led to grant the permission because of the short distance of the Mallot home from the Straus store and the parking lot;
"11. That at 8:00 o'clock p. m. that day the truck, operated by Reynolds, with Viola Mallot as a passenger struck and injured plaintiff at 14th Elm streets;
"12. That Reynolds at that time was engaged entirely on an errand of his own and that his use of the truck at the time of the accident was in violation of the specific instruction of Straus to return the truck to the parking lot upon delivery of the baby bed.
"13. That Reynolds use of the truck was not with the permission of Straus.
"Conclusions of Law
"The court finds as a matter of law:
"1. That whether permission to use a vehicle, under the omnibus clause in an insurance policy is granted, is a question of fact;
"2. That the acts of Reynolds were a violation of Section 12619, General Code of Ohio, in that he was operating without the owners' consent;
"3. That judgment be rendered for defendant Buckeye Union Casualty Company."
The plaintiff's first contention is that he is entitled to recover by reason of the language of paragraph III of the policy. It is captioned "Definition of `Insured' " and the material part is set forth in the trial court's conclusions of fact and law quoted above. Reduced to its lowest terms, it provides that "the unqualified word `insured' wherever used * * * also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the named insured. * * *" (Italics supplied.)
The plaintiff points to the conceded fact that Reynolds obtained express permission from the insured owner, Straus, to use the motor truck. This fact, the plaintiff insists, is sufficient to include Reynolds within the terms of the policy. The defendant casualty company contends that the single fact of original permission that the "actual use" of the motor vehicle must be with the permission of the named insured. Emphasis is placed on the additional undisputed fact that at the time of the collision the use to which Reynolds was then putting the truck was wholly without the permission of Straus, the insured owner. According to the findings of fact, "Reynolds at that time was engaged entirely on an errand of his own and * * * his use of the truck at the time of the accident was in violation of the specific instruction of Straus to return the truck to the parking lot upon delivery of the baby bed." It was 3:00 o'clock in the afternoon when Reynolds obtained Straus' permission to use the truck to deliver a baby bed to the home of Viola Mallot, a block and a half distant from Straus' store. It was not until 8:00 o'clock that evening — five hours later — that the collision occurred in a different part of the city.
In 5 American Jurisprudence, beginning on page 804, appears the following comment with reference to automobile liability insurance policies containing provisions similar to those here involved:
"Independently of the general insuring clause in an automobile liability policy, oftentimes there appears, either within the policy or by way of rider or indorsement attached thereto, a clause purporting, or the effect of which is, to extend the protection of the policy to any person or persons coming within a defined group. This is the so-called `omnibus' clause. * * *
"Most omnibus coverage clauses indemnify others than the insured only where such other persons are riding in or operating the insured automobile with the `permission' or `consent' of the assured. * * *
"The view taken by some courts is broadly stated, that for the use or operation of the car to be with the `permission,' or `consent,' of the named assured, etc., within the meaning and effect of an omnibus clause, permission or consent must have been given, impliedly at least, not only to the taking and use of the car in the first instance, but also to the particular use being made of the car at the time in question. Other courts take the view that for one's use or operation of the car to be with the `permission' of the named assured, etc., within the meaning and effect of an omnibus clause, he need have received only permission or authority to take and use the car in the first instance."
The latter is designated the extreme view. Extensive annotations are to be found in 72 A. L. R., 1375, and 106 A.L.R., 1251.
A similar comment appears in 45 Corpus Juris Secundum, 898, Section 829:
"Express permission for a given purpose does not imply permission for all purposes; but a general permission may sufficiently cover a particular trip, without specific permission therefor. Permission, in order to extend the protection of the policy, has been held by some authorities to mean a consent to use the car at a time or place, or for a purpose, authorized by insured, so that a different use is not within such protection. Under other authority, however, permission to use the car in the first instance is permission within the omnibus clause, regardless of the use to which the car is actually put thereafter, so that insurer is liable even if the accident occurs while the car is being used in a manner not embraced within the limits of the permission given, or even in a manner which violates an express prohibition by insured. * * * The difference between the two views has been said to resolve itself largely into the question whether the word `permission' is to be construed as meaning permission to use a car or as permission to use the car in a specified manner and for a specified purpose."
But most of the cases cited thereunder, like most of those upon which the plaintiff relies, involve merely the word "use" and not the newer phrase "actual use" employed in the instant case.
In 45 Corpus Juris Secundum, 902, Section 829, appears the following further comment:
"Where the policy covers `actual use' by another with the owner's permission, the term `actual use' has been said to mean the use to which the automobile is being put at the time of the accident with the permission of the named insured, and to mean the use of the car at the time under consideration * * *."
This represents the newer and the majority rule.
The decision on which the plaintiff places special reliance is in the case of Dickinson, Admr., v. Maryland Casualty Co., 101 Conn. 369, 125 A. 866, 41 A. L. R., 500. However, the policy involved in that case did not contain the phrase "actual use." Furthermore, the decision was not unanimous, and in a later decision in the case of Mycek v. Hartford Accident Indemnity Co., 128 Conn. 140, 20 A.2d 735, that court limited the effect of the Dickinson case by the following comment on a quotation from the earlier opinion:
"This quotation shows that the case was regarded as one where permission for a specific use had been given but there had been a slight deviation, not of sufficient importance to annul the permission. Many of the cases citing the Dickinson case have distinguished it on that ground * * *."
Then, referring to the later case, the court said:
"Under these circumstances the plaintiff, by the great weight of authority, is denied recovery. It is held that liability under an omnibus coverage clause of this character is not established when the use made of the car constitutes a complete departure from that for which permission was granted."
That the departure in the instant case, as in the later Connecticut case, was complete is beyond cavil when it is remembered that Reynolds borrowed the truck for his own errand of a few minutes to make a delivery of a bed a distance of a block and a half but still had the truck five hours later in a different part of the city on a wholly different mission.
The lower courts were correct in declining to follow the extreme, minority rule which obviously lends itself to gross abuse by an unscrupulous individual who, in violation of his express instructions, might retain possession of the automobile indefinitely and operate it over unlimited territory with the insurance still in effect. If such extreme unlimited coverage is to be afforded, it would seem that in fairness to all concerned it should be so stated in the policy.
The second ground on which the plaintiff bases his claim for recovery is the so-called financial responsibility law to which reference is made in "condition" number 7 of the policy reading in part as follows:
"Such insurance as is afforded by this policy for bodily injury liability or property damage liability shall comply with the provisions of the motor vehicle financial responsibility law of any state or province which shall be applicable with respect to any such liability arising out of the ownership, maintenance or use of the automobile during the policy period, to the extent of the coverage and limits of liability required by such law, but in no event in excess of the limits of liability stated in this policy."
The Ohio statutes on this subject are Section 6298-1 et seq., General Code, of which Section 6298-7 contains the following pertinent language:
" `Motor vehicle liability policy,' as used in this act, shall mean a policy of liability insurance issued by an insurance company or carrier authorized to issue policies of insurance of the kind and nature set forth in this act under the laws of this state, or the state in which the insured resides, to the person therein named as insured, which policy shall either (1) designate, by explicit description or other adequate reference, all motor vehicles with respect to which coverage is intended to be granted by said policy, and shall insure the insured named therein and any other person using or responsible for the use of any such motor vehicle with the consent, express or implied, of such insured, against loss from the liability imposed by law upon such insured or upon such other person for injury to or death of any person * * *." (Italics supplied).
The defendant contends that this and the cognate sections of the statutes are not applicable under the facts in the instant case and can become operative only when a conviction or a failure to satisfy a judgment has been certified to the Registrar of Motor Vehicles of the state of Ohio. There is no such circumstance here.
But, irrespective of whether these provisions are applicable, the question is moot, since the statute provides, as does the policy, that the use of the motor vehicle must be with the consent or permission of the insured. Here it is not contended that Reynolds had the permission of the insured to make use of the truck at the time or place or for the purpose for which he was using it when the collision occurred. The plaintiff relies on the original consent to use the truck at a different time and place and for a different purpose. As previously observed, this is not sufficient under the majority rule.
The decisions of the lower courts were not erroneous, and hence the judgment of the Court of Appeals must be affirmed.
Judgment affirmed.
HART, ZIMMERMAN, STEWART and TURNER, JJ., concur.
TAFT, J., concurs in paragraph one of the syllabus and in the judgment.
MATTHIAS, J., dissents.
I concur in the first paragraph of the syllabus; and also agree with the third paragraph of the syllabus to the extent that, by the words "such provisions," reference is made to the provisions described in paragraph one of the syllabus. The reasons for my disagreement with the second paragraph of the syllabus are well stated in the dissenting opinion of Matthias, J. However, I do concur in the judgment for the reasons hereinafter stated.
It is recognized in both the majority and dissenting opinions that the provisions of Section 6298-7, General Code, could not come into operation in the instant case except for condition 7 of the policy. That condition requires that the "insurance * * * shall comply with the provisions of the motor vehicle financial responsibility law of any state * * * which shall be applicable with respect to any such liability arising out of the * * * use of the automobile * * * to the extent of the coverage * * * required by such law * * *." (Emphasis mine.)
At the time of this accident, neither Straus, who owned the truck and held the policy, nor Reynolds, who was driving the truck, was "required by law" to have any liability insurance "coverage." Under the Ohio law, no such "coverage" is "required" until after the party has been convicted of or has pleaded guilty to certain offenses or has failed to satisfy a judgment. See Sections 6298-1, 6298-4, 6298-4 a, 6298-5, 6298-6, 6298-12, and especially 6298-8 and 6298-10, General Code, in which sections the words "each person required to tender a * * * liability policy" are used.
Where the registrar has made an order revoking an individual's license to operate a motor vehicle for failure to satisfy or stay execution of a judgment, Section 6298-4, General Code (120 Ohio Laws, 659), now requires that the registrar shall vacate such order "upon proof that at the time the cause of action arose out of which the judgment ensued, there was in full force and effect a motor vehicle liability policy as defined in Section 6298-7 of the General Code, which policy covers the liability of such person to satisfy such judgment, and which judgment remains unsatisfied because of the failure or refusal of the insurer to comply with the terms of the * * * policy."
These provisions do not mean, as contended by plaintiff, that such coverage is "required by law" within the meaning of condition 7 of the policy at the time of the accident resulting in the judgment. They do however suggest that it might be wise for the owner or operator of a motor vehicle to have such coverage at the time of the accident.
I am in accord with the conclusion of the majority that Reynolds was not, at the time of the accident, included within the definition of the word, "insured," as used in the omnibus clause of the policy issued by the defendant to Bernard Straus. Reynolds was driving the truck in disregard of the instructions of the owner, a gross violation of the original permission granted him. Such use was excluded from coverage by the requirement in the policy that "the actual use of the automobile" must be "with the permission of the named insured." (Emphasis supplied.)
I do not agree, however, with the holding of the majority that the provisions of Section 6298-7, General Code (a part of the Ohio financial responsibility law) require that the use of the motor vehicle contemplated therein be the same kind of use as that covered by and specified in the omnibus clause of the policy of insurance involved in this case. The words, "actual use," do not appear in Section 6298-7, General Code, and should not be inserted therein by construction. The language employed in this section differs materially from that found in the omnibus clause.
This case involves the construction of the language used in an insurance policy, whereby the insurer intended to grant, to the owner of the automobile insured, coverage in addition to that set forth in the "omnibus" clause. The language set forth in condition number seven of the policy contained the following sentence, in addition to that which is set forth in the majority opinion:
"The insured agrees to reimburse the company for any payment made by the company which it would not have been obligated to make under the terms of this policy except for the agreement contained in this paragraph."
This added liability necessarily was based on the terms of the Ohio financial responsibility law, Section 6298-1 et seq.
The Ohio financial responsibility law is designed to promote the safety of and secure greater protection to the general public. That law has as its objective the elimination from the highways of those who have demonstrated their financial irresponsibility by failure to respond in damages for injuries negligently inflicted upon others and have become a highway hazard.
A second objective is the granting of additional protection to owners who carry liability insurance policies containing provisions required by the financial responsibility law, thus enabling response in damages for any injury which anyone covered by such policy may negligently inflict upon another. Other provisions of the statute limit the right of drivers who have been convicted of serious offenses, particularly the violation of traffic laws.
The financial responsibility law is specific in defining the "motor vehicle liability policy" necessary to comply with the act, and as a very important part of this act, Section 6298-7, General Code, requires an omnibus clause in such policies. This requirement shows that the General Assembly intended not only to protect the public against careless drivers but against heedless and careless entrustment of vehicles to them by the owners. The purpose of the ordinary liability contract of an insurer and the insured owner is to indemnify the owner against personal liability. The purpose of the financial responsibility law is to protect the public from loss by injury caused by financially irresponsible drivers. The fact that this statutory protection of others incidentally protects the driver from financial liability is not so important.
The language used by the General Assembly in the Financial Responsibility Act should be interpreted with the purpose of the law fully in mind. Section 6298-7, General Code, requires that the policy "designate, by explicit description or other adequate reference, all motor vehicles with respect to which coverage is intended to be granted by said policy, and shall insure the insured named therein and any other person using or responsible for the use of any such motor vehicle with the consent, express or implied, of such insured, against loss * * *." (Emphasis supplied.)
That language is very similar to the Massachusetts statute, which defines a motor-vehicle liability policy as "a policy of liability insurance which provides indemnity for or protection to the insured and any person responsible for the operation of the insured's motor vehicle with his express or implied consent against loss by reason of the liability to pay damages to others for bodily injuries * * *." 3 Annotated Laws of Massachusetts, 182, Chapter 90, Section 34A.
Massachusetts has pioneered in the enactment of financial responsibility statutes, and the great similarity in the language of its statute and the Ohio financial responsibility law indicates that the General Assembly of Ohio approved that section of the Massachusetts law by enacting Section 6298-7, General Code. Decisions interpreting the Massachusetts law are pertinent in the consideration of the meaning of the language thus used by the General Assembly of Ohio.
The term, "responsible," as used in the Massachusetts statutes as construed by the court of last resort of that state applies to one who is responsible to the owner of the motor vehicle for its operation even though the person entrusted with the vehicle breaks the contract of bailment. O'Roak v. Lloyds Casualty Co., 285 Mass. 532, 189 N.E. 571. See, also, Boudreau v. Maryland Casualty Co., 287 Mass. 423, 192 N.E. 38; Blair v. Travelers Ins. Co., 288 Mass. 285, 192 N.E. 467; and Guzenfield v. Liberty Mutual Ins. Co., 286 Mass. 133, 190 N.E. 23.
The term, "responsible," is discussed in 7 Appleman Insurance Law and Practice, 141, as follows:
"It is necessary for the claimant, in a suit upon such a policy, to show that the vehicle was being operated with the insured's implied or express consent by one responsible for its use. The term `responsible', as used in the act, means liable, answerable, or under a bounden duty for its proper use in accordance with the terms upon which possession was delivered. One to whom the owner voluntarily entrusts the automobile would be a person `responsible' to such owner. This contemplates that the insurer's liability will run with the ear unaffected by the owner's action, unless its presence on the public ways was without his sanction."
The facts in the instant case present an entrustment of a truck by the insured to a customer, who had purchased furniture from the insured owner and a gross diversion by this customer driver from the permitted use of the truck. This driver was, however, at all times responsible to the owner of the truck for his (the driver's) use of the vehicle and came within the provisions of the Ohio financial responsibility law.
The original permission of Reynolds to drive the truck is conceded. Therefore, judgment should have been rendered by the Court of Common Pleas for the plaintiff and against the insurer for not more than the sum provided by the Ohio financial responsibility law, which, in this case, was the sum of five thousand dollars.