Summary
noting that the "universal rule that insurance policies are to be construed strictly in favor of the insured . . . is not applicable to extend the coverage of the policy to absurd lengths"
Summary of this case from Wendy's International, Inc. v. Illinois Union InsuranceOpinion
No. 32984
Decided April 15, 1953.
Insurance — Automobile liability — Extent of policy coverage — Insured and person using automobile with insured's permission — Permittee of permittee of permittee not covered, when.
An automobile liability insurance policy covering not only the named insured but also any person while actually using the automobile with the permission of the named insured does not cover the permittee of a permittee of a permittee of the named insured, where the last permittee drives the car without the presence of the named insured or the first or second permittee or not in the interest of or for a purpose mutual to such driver and the named insured or his permittee, and where neither the named insured nor the first permittee permits, either directly or by implication, the last permittee to drive such car. ( Brown, a Minor, v. Kennedy et al., Minors, 141 Ohio St. 457, distinguished.)
APPEAL from the Court of Appeals for Cuyahoga county.
On September 23, 1938, Gerald West, hereinafter designated plaintiff, instituted an action against one Paul McNamara in the Court of Common Pleas of Cuyahoga County upon the claim that he, West, had sustained personal injuries and property damage by reason of McNamara's negligent operation of an automobile. West secured a final judgment for money against McNamara.
It appearing that at the time of West's injuries the automobile driven by McNamara and owned by the H.F. Hammon Development Company was covered by a liability insurance policy issued to such company by the Employers' Liability Assurance Corporation, Ltd., West, on April 30, 1950, filed a supplemental petition under the provisions of Section 9510-4, General Code, in which he makes such insurer a defendant and seeks to subject the insurance money provided by the policy to the payment of the judgment obtained against McNamara.
By answer the insurer admits the issuance and existence of the liability insurance policy on the automobile described in the supplemental petition, but denies the right of West to avail himself of its protection.
The cause was heard by a judge of the Common Pleas Court without a jury, and a judgment for the insurer resulted. The judgment entry reads:
"Supplemental petition dismissed. Judgment for the defendant, Employers' Liability Assurance Corporation."
Such judgment entry is about as short as it could possibly be and states no grounds for the court's action.
Although the trial judge found that McNamara was driving the automobile, which injured West, by authority and with the permission of its custodian, Mrs. Robinson, the written memorandum prepared by the judge is, in part, as follows:
"Mrs. Robinson, as far as the record discloses, is neither an officer, director, nor even a stockholder of the named assured, and if under the terms of this policy she could delegate authority and permission to McNamara to operate the automobile, then extending this claim of the plaintiff to its logical conclusion, McNamara having had authority and permission delegated to him by Mrs. Robinson could delegate the authority to another. So the court is forced to the conclusion that the operation of the car by McNamara at the time of the injury did not come within the terms, provisions or conditions of the insurance contract * * *."
On appeal to the Court of Appeals, the judgment of the Court of Common Pleas was reversed and final judgment entered for West against the insurer, principally upon the authority of Brown, a Minor, v. Kennedy et al., Minors, 141 Ohio St. 457, 48 N.E.2d 857.
The cause is before this court upon the allowance of a motion to certify the record.
Messrs. Woodle Wachtel, for appellee.
Mr. J.R. Kistner, for appellant.
The main question for determination is whether under the particular facts of this case, all the testimony having been produced by plaintiff, McNamara was an additional insured under the terms of the liability insurance policy.
The salient facts are as follows:
The H.F. Hammon Development Company, of Florida, a fiduciary organization, was the owner of several automobiles including the one involved in the present case. This latter automobile was the subject of an insurance policy issued by the Employers' Liability Assurance Corporation, Ltd., and the company was the named insured.
One Wallace A. Robinson, according to his testimony, was a trustee, part owner and comanager of the company and for a period of time had consistently used one or another of its automobiles for personal business and pleasure, apparently as a permittee of the named insured. It was his general practice as such permittee to allow his wife to make use of such of the company's cars as he used, which of course made her the permittee of a permittee.
During the spring of 1938, Mr. and Mrs. Robinson drove to Cleveland in the company car involved in the present case. They had formerly lived in that city and Mrs. Robinson had relatives there. Robinson proceeded to New York on personal business and left the automobile in the custody of Mrs. Robinson in Cleveland for her use.
On the evening of June 11, 1938, Mrs. Robinson and McNamara, her nephew, who was about 21 or 22 years of age, attended a picnic at a location known as the European Gardens. They arrived at the Gardens about five o'clock in the afternoon, drank with other companions for several hours, and both became visibly affected.
Olga Linden, whose family owned and operated the European Gardens and with whom McNamara was staying on the day of the injury to plaintiff, testified that she thought both McNamara and his aunt acted as though intoxicated. She testified further that McNamara at times drank quite a bit and had been in other automobile accidents.
Mrs. Robinson, whose testimony was introduced by deposition, proved to be a witness with a poor memory. She said she remembered little or nothing about the matters concerning which she was questioned but this may have been due, in part at least, to the fact that a period of about 12 years had elapsed between the date of West's injuries and the taking of the deposition.
The following answers to questions asked her are typical:
"Q. Had you driven to Cleveland from Florida? You don't recall? A. No.
"Q. You do recall the incident in which Paul was involved in an accident, you say? A. Yes.
"Q. Whose car were you driving at that time? A. Whatever car we had up there, I suppose.
"Q. That's right, whatever car you had in Cleveland at that time? A. Yes.
"Q. Do you recall whether or not it was a Buick automobile?
"* * *
"A. I don't know.
"Q. You don't know. Where were you when you first received word of this accident? A. I don't remember. I wouldn't know.
"Q. Had you been with Paul that evening?
"* * *
"Q. On the evening of the accident, June 11, 1938.
"* * *
"A. Yes.
"Q. And do you remember where? A. No, I don't.
"Q. And do you recall whether or not it was at a picnic?
"* * *
"A. No, I don't remember.
"Q. Well, do you recall the circumstances under which Paul was driving the automobile that evening? A. No.
"* * *
"Q. Do you recall where you were staying or living in Cleveland at the time this incident took place? A. No, I don't.
"Q. Well, I will ask you whether or not it is a fact, Mrs. Robinson, that you turned the keys to the car over to Paul that evening? A. I don't remember.
"* * *
"Q. You wouldn't say it wasn't true, would you? A. I don't remember a thing about the case.
"Q. And do you recall having a conversation with Paul as to where he was to go with the car and what he was to do? A. No, no, sir."
Jacob Loeffler, one of plaintiff's witnesses, testified that he was with McNamara and Mrs. Robinson at the European Gardens and that Mrs. Robinson said to McNamara, "Would you take the car and go and get me some cigarettes? I am out of cigarettes." Loeffler testified further that a few minutes after that conversation, which occurred around eight-thirty or nine o'clock in the evening, McNamara left with a young man called "Mop Top" and walked up the hill toward the car.
The accident in which plaintiff was injured happened some five or six miles away, and there is no testimony with reference to any of McNamara's actions or to where he had gone or been between the time he left the European Gardens and the time of the accident. Neither McNamara nor any of the persons involved in the accident were called as witnesses.
We now consider the relevant parts of the liability insurance policy involved.
Paragraph III, under the heading, "Insuring Agreement," provides:
"Definition of `assured.' The unqualified word `assured' wherever used in coverages A and B and in other parts of this policy, when applicable to these coverages, includes not only the named assured but also any person while using the automobile and any person or organization legally responsible for the use thereof, provided that the declared and actual use of the automobile is `pleasure and business' or `commercial,' each as defined herein, and provided further that the actual use is with the permission of the named assured. * * *" (Compare Section 6298-7, General Code, 116 Ohio Laws, 218, 221.)
In item VI of the policy, it is indicated by an "X" that the automobile is to be used for "pleasure and business" as defined in condition 2, which provides:
"Purposes of use defined. (a) The term `pleasure and business' is defined as personal, pleasure, family and business use."
As can well be imagined, there is a conflict in the cases with respect to the meaning and scope of language in an automobile liability insurance policy which extends coverage to one who is actually using the automobile "with the permission of the named insured."
Naturally the facts in each case are of great importance and in many instances a decision depends on the particular facts developed in the particular case.
The question with which we are here concerned is discussed in an annotation appearing in 160 A.L.R., 1195, and captioned "Omnibus clause of automobile liability policy as covering accidents caused by third person who is using car with consent of permittee of named insured." At page 1206, the annotator comments:
"It is submitted that as a generalization from all the cases within the scope of this annotation, the following rules may be stated as expressing the basis of the holdings in the great majority of the decisions:
"1. The original permittee who has been given permission to use the automobile can delegate this authority to the second permittee so as to bring the use of the automobile by this person within the protection of the policy if permission has been expressly given by the named insured to make such delegation.
"2. The original permittee who has been given permission to use the automobile but has been expressly forbidden to delegate this authority cannot do so, and the use of the car by the second permittee in violation of the named insured's express order is not within the protection of the policy.
"3. The original permittee who has been given permission to use the car can not, according to the great weight of authority, delegate this authority to the second permittee so as to bring the use of the car by that person within the protection of the policy where the initial permission is silent as to the question of delegation of authority.
"4. The initial permission given by the named assured to the original permittee includes, according to the better view, the use of the automobile by the second permittee where in doing so the second permittee serves some purpose, benefit, or advantage of the first permittee. This is the case if the original permittee is riding in the car * * * or if the car is driven in his interest or for a purpose mutual to him and the second permittee * * *."
In the present case, Mr. Robinson was the first permittee, Mrs. Robinson was the second permittee, and McNamara, who was driving the car at the time of the accident, without either Mr. or Mrs. Robinson in the car, was at best a permittee of a permittee of a permittee. Certainly, McNamara was not driving the car for any purpose mutual to the named insured or the first permittee. There is no claim that the alleged mission on which McNamara had gone was in any manner in the interest of the owner of the car or of Mr. Robinson who was in New York at the time of the accident.
There is a great difference between the facts in the present case and those in Brown v. Kennedy, supra, upon which the Court of Appeals relied.
In the Brown case, the "named insured" in the liability insurance policy was W.E. Kennedy. His daughter, Dorothy Kennedy, was attending Wilmington College, at Wilmington, Ohio, and she had the permission of her father, who was the representative of the liability insurance company, to use his automobile in making journeys between her home at Hamersville in Brown county and Wilmington. During one of those trips, Bennett White, also a student at Wilmington College, who frequently rode with Dorothy Kennedy, was driving the automobile and caused injury to one Brown. Brown instituted an action for damages against Dorothy Kennedy and Bennett White and obtained a judgment against both of them. Thereafter Brown filed a supplemental petition under Section 9510-4, General Code, against the casualty company, the insurer of W.E. Kennedy, to subject the insurance money provided by the policy to the payment of the judgment.
The Court of Common Pleas entered judgment against Brown, the Court of Appeals reversed the judgment, and the Supreme Court affirmed the judgment of the Court of Appeals.
Judge Turner, writing the opinion in the case in this court, remarked:
"The insurer did not choose to limit its liability to one who operates or drives the automobile but selected a wider term and agreed to insure anyone who used the car with permission.
"The fact that Bennett White was driving the car without the knowledge or consent of the named insured does not change the fact that Dorothy was using the automobile at the time of the accident for the purpose of transportation between her home and Wilmington College. * * * Had the evidence disclosed that Bennett White was driving alone on some mission of his own, a different situation would be presented. The only question here is whether Dorothy Kennedy was using the automobile with permission of her father, the named insured. That question was settled by the trial court's finding of fact.
"We agree with the Court of Appeals that the words `using,' `used,' and `actual use' do not have the limited meaning of `operating,' `operated,' or `actual operation.' The defense that Bennett White was driving does not negative that fact that Dorothy Kennedy was using the automobile."
Judge Turner in his opinion twice stressed the fact that Brown, in his action against the insurer, was not trying to collect the judgment against White, the driver of the automobile, but was trying to collect the judgment against Dorothy Kennedy, who had permission from her father, the owner and named insured, to use the automobile and who was in it and using it at the time of the accident.
As Judge Turner said:
"As was pointed out by the Court of Appeals, the instant action against the insurer is not to collect the judgment against the driver of the vehicle, White.
"* * *
"Under the findings of fact by the trial court and the terms of the policy Dorothy Kennedy was an insured under the policy and it is the duty of the insurance company under its contract to respond. The insurance company is not being held liable for the use of the car by Bennett White * * *."
In the present case, West brought an action against McNamara alone and recovered a judgment against him. Moreover, Mrs. Robinson was not riding in the automobile when West was injured and it is a matter of mere conjecture as to what McNamara was doing with the car at the time of the accident 5 or 6 miles from the European Gardens.
It could well be that the trial judge, as the trier of the facts and whose province it was to pass upon the credibility of the witnesses, determined that McNamara, at the time of the accident, was not on an errand for Mrs. Robinson.
This court has held that where an automobile liability insurance policy contains the language, "provided the actual use of the automobile is with the permission of the named insured," it means that the use to which the vehicle is being put at the time of the accident must be with permission of the named insured. ( Gulla v. Reynolds, 151 Ohio St. 147, 85 N.E.2d 116.)
It would seem logically to follow that the actual use of the automobile must be with the permission of the named insured. That was the situation in the Brown v. Kennedy case, supra.
In the present case, there is not the remotest showing that the H.F. Hammon Development Company, the named insured, ever gave permission to McNamara to use the automobile in question or ever knew that he had driven or would drive it. It is not likely that it was within the contemplation of the named insured that the permittee of its permittee would authorize the driving of the car by a person who was intoxicated, drank heavily at times, and had been in other accidents. Particularly would this be so in reference to the driving of the car without either the original permittee or his permittee being present therein and having no direction or control over its operation. As a matter of fact, after the accident in which West was injured, McNamara was brought into court and found guilty of the charge of "reckless driving."
In our opinion, the rule which should be applied here and which was followed by the trial court is that the permittee of a permittee of the named insured, in the absence of express or implied authority of such named insured, can not effectively permit a fourth person to operate the vehicle so as to bring such person within the protection of the policy.
The universal rule that insurance policies are to be construed strictly in favor of the insured operates in favor of such insured persons as are covered by the policy, and, in a case such as the present one, is not applicable to extend the coverage of the policy to absurd lengths so as to provide a right of action under Section 9510-4, General Code.
The judgment of the Court of Appeals is reversed and that of the Court of Common Pleas affirmed.
Judgment reversed.
WEYGANDT, C.J., MIDDLETON, TAFT, MATTHIAS and HART, JJ., concur.
The writer regrets that he cannot agree with his associates in reversing the unanimous judgment of the Court of Appeals herein. Neither the interpretation of the facts as contained in the majority opinion nor the legal conclusions there reached are in accord with the writer's views.
In reaching a decision in the present case, the influence and implications of Brown, a Minor, v. Kennedy et al., Minors, 141 Ohio St. 457, 48 N.E.2d 857, cannot be escaped. The law of that case, as set out in the syllabus, is as follows:
"Where an insurance policy covers one who uses the specified automobile with the permission of the named insured, the insurance company is not relieved of liability by reason of the fact that while permittee was using the automobile it was being driven by another at the time of an accident."
Here, the ultimate question for determination is whether under the facts developed, McNamara is an additional assured within the terms of the liability insurance policy in issue. The writer thinks he is.
The majority opinion denotes Mrs. Robinson as the second permittee and McNamar as the third permittee. In the policy before us, the "H.F. Hammon Development Company" is the "named assured." From the bill of exceptions it would seem quite certain that Wallace A. Robinson and his brother, Horace Robinson, were the owners and managers of the company. During the oral argument of this case, both counsel for plaintiff and counsel for the defendant insurer referred to the company as a "Massachusetts trust," and from the facts disclosed it may reasonably be deduced that the H.F. Hammon Development Company was in reality a copartnership composed of the brothers Robinson, with the partnership property vested in them as trustees. See Averill v. Lincoln, 52 Cal.App.2d 398, 126 P.2d 398. Compare Goubeaux, Recr., v. Krickenberger, Exrx., 126 Ohio St. 302, 185 N.E. 201. It would logically follow that Wallace A. Robinson should be regarded as a primary assured under the policy and that his permission as to the use of an H.F. Hammon Development Company automobile in his possession and under his control should be treated as that of the company. Consequently, when Wallace A. Robinson left the automobile with Mrs. Robinson, his wife, in Cleveland, for her general and unrestricted use during his absence in New York, she became the initial or original permittee.
Quoted in the majority opinion are certain rules found in 160 A.L.R., 1206. Paragraph four of those rules is as follows:
"The initial permission given by the named assured to the original permittee includes, according to the better view, the use of the automobile by the second permittee where in doing so the second permittee serves some purpose, benefit, or advantage of the first permittee. This is the case if the original permittee is riding in the car * * * [ Brown, a Minor, v. Kennedy et al., Minors, supra ( 141 Ohio St. 457, 48 N.E.2d 857)] or if the car is driven in his interest or for a purpose mutual to him and the second permittee * * *."
The latter part of the quoted paragraph applies specifically to the instant case and, in view of the interpretation of the term, "use," by this court in Brown, a Minor, v. Kennedy et al., Minors, supra, should be adopted here. Liability of the insurer is based on the premise that the initial and unrestricted permission given by the named assured to the original permittee (Mrs. Robinson) to use the automobile included by implication the authority to delegate the use and operation of the automobile to an agent (McNamara) in the interest of and for the benefit of the original permittee. In such circumstances, the use of the vehicle by the second permittee was that of the original permittee.
Robinson left the automobile with his wife for her general use while he proceeded to a distant city for a stay of some duration. Mrs. Robinson was more than an ordinary bailee, for she was invested with authority over the use and operation of the automobile during her husband's absence. Actually, she stood in the place of the named assured and, within the coverage of the policy, could permit its use by another in the performance of an errand for her.
From a reading of the bill of exceptions the writer cannot escape the conclusion that McNamara was on a mission for Mrs. Robinson at the time he injured West and was then complying with her expressed wishes. If this were not so, the insurer might have supplied evidence to the contrary. That McNamara was several miles distant from the European Gardens when the accident occurred is of no particular significance. One witness testified, and this was the only testimony on the point, as follows:
"Q. What is the nearest place where you could get cigarettes? A. There is a confectionery right on the corner, but I believe that was closed at that time.
"Q. A confectionery? A. That's right.
"Q. On the corner where? A. Of Wallings road.
"Q. And that is how far from the European Gardens? A. About 10 miles.
"Q. That is the nearest place you could go to buy cigarettes?
"* * *
"Q. Where is the next place? A. The next place would probably be in town here, I don't recall any other place on the way.
"Q. By `in town' what do you mean? A. Coming in to Cleveland.
"Q. Towards Cleveland? A. Towards Cleveland."
There is a marked distinction between the bailment of a motor vehicle for general use and a bailment for a particular purpose. One necessarily implies the right of the general bailee to have the general use of the vehicle as though it were his own; the other restricts the use by the bailee to a special use within and at a designated time and place. See Gulla v. Reynolds, 151 Ohio St. 147, 85 N.E.2d 116. In Brown, a Minor, v. Kennedy et al., Minors, supra, where the liability of the insurer was established, the holding was that it was not necessary for the original permittee to operate the automobile herself; it was enough that, in permitting another to drive it, she was using the car with permission. The fact that Mrs. Robinson was not riding in the car at the time of West's injuries is not controlling as the car was being used and operated at her direction and in her service. And again the point is stressed that Mrs. Robinson had been granted the general use of the automobile without restriction.
Attention is directed to the following cases, additional to those cited in 160 A.L.R., 1195 et seq., which it is submitted support either directly or in principle the conclusions herein expressed. United Services Automobile Assn. v. Preferred Acc. Ins. Co. of New York (C.C.A. 10) 190 F.2d 404; Norris v. Pacific Indemnity Co., 39 Cal.2d 420, 425, 247 P.2d 1, 4; Persellin v. State Automobile Ins. Assn., 75 N.D. 716, 32 N.W.2d 644; Robinson v. Fidelity Casualty Co. of New York, 190 Va. 368, 57 S.E.2d 93. See, also, 5 American Jurisprudence, Cum. Supp., 165, Section 535.1. Compare annotation, 5 A.L.R. (2d), 600 et seq.
It seems to the writer that the majority opinion places too much stress on the intoxication of Mrs. Robinson and McNamara. So far as the bill of exceptions discloses, they were drinking nothing stronger than beer with an alcoholic content of 3.2 per cent. Moreover, when McNamara was brought into court as a result of the incident in which West was injured, he was found guilty of "reckless driving" and not of "drunken driving."
If the writer were composing a syllabus for the instant case, it would read like this:
1. The coverages of automobile liability insurance policies are to be liberally interpreted to effect a purpose of the issuance of such policies, namely, to provide indemnity as to those who may suffer bodily injury, death or property damage by the negligent operation of motor vehicles.
2. Where one who comes within the term, "named assured," as employed in an automobile liability insurance policy, surrenders the automobile designated in such policy to his wife for her general and unrestricted use, and thereafter the wife directs her nephew to drive such automobile on a mission for her, and the nephew while driving the automobile on such mission negligently injures another, the nephew is within the protection of the policy which extends coverage to one who is actually using the specified automobile "with the permission of the named assured." In the circumstances described, the actual use of the automobile is that of the assured's wife through the agency of her nephew, and authority from the "named assured" for such kind of use may be implied.
In the writer's opinion, the judgment of the Court of Appeals should be affirmed.