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Prisuda v. General Casualty Co.

Supreme Court of Wisconsin
Feb 7, 1956
74 N.W.2d 777 (Wis. 1956)


In Prisuda v. General Casualty Co. (1956), 272 Wis. 41, 74 N.W.2d 777, we pointed out "use" and "operation" in the omnibus clause were not the same.

Summary of this case from Lukaszewicz v. Concrete Research, Inc.


January 10, 1956 —

February 7, 1956.

APPEAL from a judgment of the circuit court for Milwaukee county: MICHAEL T. SULLIVAN, Circuit Judge. Reversed.

For the appellant there was a brief by Dougherty, Arnold Philipp of Milwaukee, and oral argument by Suel O. Arnold.

For the respondents there was a brief by Tilton, Chudnow, Kastrul, Pulito, Keegan Luff of Milwaukee, and oral argument by Aaron L. Tilton.

This is an action for damages tried to the court without a jury arising from personal injuries sustained on July 29, 1951, by the three minor plaintiffs, Audrey Prisuda, aged sixteen, Joyce Niederfler, aged sixteen, and Gustav Karas, aged seventeen, all of Milwaukee, while they were riding as passengers and guests in a 1936 La Fayette automobile, the title of which was in the name of Mrs. Lucille Minnihan Allen of Milwaukee, and which vehicle at the time was operated by George Rogers, aged nineteen, of Milwaukee. The car in which the plaintiffs were riding came into collision with an English M. G. automobile operated by Robert C. Collins of Waukesha on State Trunk Highway 16 at a point about one mile south of Pewaukee in Waukesha county. A liability insurance policy covering the car of Mrs. Allen had been issued July 25, 1951, by the defendant, General Casualty Company of America, on an assigned-risk surcharge basis.

The La Fayette car was purchased for $125 by the husband of Mrs. Allen about two or three months before the collision. A minor son, William Allen, aged seventeen, contributed the purchase price and the upkeep expense. The title was placed in the name of Mrs. Allen. When the car was purchased, William Allen did not have a driver's license, and he was permitted to drive the car only when his father was riding with him. William Allen secured a driver's license about July 4, 1951. After the liability insurance policy was secured, William Allen was allowed to drive the car alone occasionally during the daytime, but was obliged to obtain the keys for it from his father. There is testimony of record that William Allen also drove the car to work occasionally at night. Once he had permitted Gustav Karas to operate the car for the purpose of moving it away from an alley so as not to block traffic.

The collision in question occurred at about two o'clock in the morning. On the previous evening William Allen had obtained permission from his mother to use the automobile for the purpose of going to a swimming party at Friese lake in Washington county. The mother told William that no one but he was to drive the car on the trip. He left home at about 7 p. m., met the others at a restaurant, drove with all of the party excepting George Rogers to Rogers' home where Rogers left his car and entered the Allen car. William then drove the car to the Allen home where he picked up a swimming suit for Gustav Karas. Events occurring thereafter with reference to the use and operation of the Allen car are concisely stated in the trial court's decision as follows:

"When he [William Allen] went into the house his mother, Lucille Minnihan Allen, admonished him to drive carefully. She instructed him not to let any other person drive the car. She knew about the beach party at Friese lake.

"About 8:45 p. m. the group left Billy's [William Allen] house for Friese lake, where they arrived about 10:50 p. m. only to find that it was closed for the night. The group then decided to proceed to Pewaukee lake. Between Friese lake and Pewaukee lake, Billy momentarily lost control of the car on a gravel road and narrowly escaped rolling into a deep roadside ditch. Billy, although shaken by this episode, continued driving to Pewaukee lake, where the party swam and had refreshments.

"About 2 a. m. of July 29th the group left Pewaukee lake on Highway 16. Billy gave George Rogers the key to the automobile. He asked George Rogers to drive for the reason that he was too tired. [Patricia Lewandowski testified at the trial that she had heard the conversation between Billy Allen and George Rogers at Pewaukee. She stated that: `Billy Allen said he was tired and nervous and asked George Rogers to drive, and asked if he had a driver's license.'] Rogers had a license to drive. In the front seat were George Rogers driving, Audrey in the middle, and Gustav to the right. Billy and Joyce were in the rear seat.

"George Rogers driving easterly on Highway 16 attempted to pass the car in front of him on the left. Rogers pulled to the north side of the highway where he crashed almost head on into the M. G. automobile of Robert C. Collins, who was proceeding westerly on Highway 16. The La Fayette car came to rest on the north side of the highway partially in the ditch. The M. G. also came to rest on the north side of the highway. The front of the M. G. was demolished (a passenger therein was killed); the right front and right side of the La Fayette were demolished.

"Highway 16 is 24 feet wide at the point of collision; the collision occurred at the crest of a knoll in a no-passing zone for eastbound traffic."

The court determined that George Rogers was negligent as to lookout, control, and the manner in which he attempted to pass the automobile in front of him, and that such negligence was the cause of the collision. The court also determined the damages resulting from the injuries sustained by the respective plaintiffs. The court exonerated Robert C. Collins of any negligence and determined further that none of the plaintiffs assumed the risk of the injuries which caused their damages. The defendant does not challenge the court's findings with respect to the items of damages or negligence.

It appears without dispute that John A. Hanna, an experienced claims adjuster and local claims manager for the defendant insurance carrier, had received notice of the accident on the day after or several days after it occurred, and that he took written statements from the assured and from some of the injured plaintiffs and from George Rogers, the driver. Hanna forwarded a report of the accident to the defendant Insurance Company's home office in St. Louis. On October 29, 1951, the home office filed an SR-21 (Safety Responsibility) form with the motor vehicle department of Wisconsin under provisions of sec. 85.09 (19) (a), Stats., indicating that its policy affording $50,00/$10,000 bodily and $1,000 property damage applied to the owner, Lucille Minnihan Allen and to the operator, George Rogers, and was in effect on the date of the accident. When the SR-21 form was filed, the responsibility of such filing was not within the supervision of the local claims manager, Hanna. It appears that shortly after the accident and during the course of Hanna's investigation, and at his instance, Mrs. Allen, the named assured, and George Rogers, the operator, executed in favor of the Insurance Company a reservation-of-rights agreement. Until the time of the trial of the action Hanna had been unaware of the position of the Insurance Company as expressed in its filed SR-21 form. On November 10, 1954, Hanna, on behalf of the Insurance Company sent a letter to the motor vehicle department advising that through error the Insurance Company had filed an SR-21 form covering the driver of Mrs. Allen's car, to wit, George Rogers, and that the company's investigation had revealed that the policy in fact did not cover Rogers. Hanna requested that the SR-21 form be corrected so as to show that the policy covered the named assured, Mrs. Allen, but did not cover the operator, George Rogers. On November 15, 1954, Melvin Larson, commissioner of the motor vehicle department, by letter advised the Insurance Company through Mr. Hanna that the rescission order to cancel the SR-21 form could not be accepted, for the reason that such form must be rescinded within thirty days of the date of the filing.

The complaint of the plaintiffs does not refer to the filing of the SR-21 form by the defendants. Evidence with respect to such filing was offered by the plaintiffs at the trial. However, the court ruled that the same was inadmissible on the ground that while such certificate is in the nature of a statement of financial responsibility, nevertheless it does not alter the terms of the insurance contract. The court determined that under the facts there was an implied consent on the part of the named assured, Mrs. Allen, to the use and operation of the car by George Rogers, and that hence the defendant Insurance Company was responsible within the financial limits of its policy for the damages sustained as a consequence of the plaintiffs' injuries. Judgment for damages was entered in favor of the respective plaintiffs against the General Casualty Company of America. While Great American Insurance Company, insurer of the Collins car, was also named as a party defendant in this action, the court's disposition with reference to the claims against it is not relevant to the issues presented on this appeal.

The appellant, General Casualty Company of America, contends that at the time of the collision, George Rogers, the driver of the Allen car, was not an additional assured under the omnibus coverage clause of the policy. That clause reads as follows:

" Definition of `Insured.' With respect to the insurance for bodily injury liability and for property damage liability the unqualified word `insured' includes the named insured and 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 by the named insured or with his permission. The insurance with respect to any person or organization other than the named insured does not apply:

"(a) to any person or organization, or to any agent or employee thereof, operating an automobile repair shop, public garage, sales agency, service station, or public parking place, with respect to any accident arising out of the operation thereof;

"(b) to any employee with respect to injury to or sickness, disease, or death of another employee of the same employer injured in the course of such employment in an accident arising out of the maintenance or use of the automobile in the business of such employer."

Sec. 204.30 (3), Stats., in force at the time in question, read:

"No such policy shall be issued or delivered in this state to the owner of a motor vehicle, unless it contains a provision reading substantially as follows: The indemnity provided by this policy is extended to apply, in the same manner and under the same provisions as it is applicable to the named assured, to any person or persons while riding in or operating any automobile described in this policy when such automobile is being used for purposes and in the manner described in said policy. Such indemnity shall also extend to any person, firm, or corporation legally responsible for the operation of such automobile. The insurance hereby afforded shall not apply unless the riding, use, or operation above referred to be with the permission of the assured named in this policy, or if such assured is an individual, with the permission of an adult member of such assured's household other than a chauffeur or domestic servant; provided, however, that no insurance afforded by this paragraph shall apply to a public automobile garage or an automobile repair shop, sales agency, service station, and/or the agents or employees thereof. In the event an automobile covered by this policy is sold or transferred the purchaser or transferee shall not be an additional insured without consent of the company, indorsed hereon."

The coverage under the policy is broader than that required by the statute. While an insurer by its contract may not restrict the coverage to less than that required by statute, Olander v. Klapprote (1953), 263 Wis. 463, 57 N.W.2d 734, nevertheless it may increase or broaden the protection over the statutory requirement. Schimke v. Mutual Automobile Ins. Co. (1954), 266 Wis. 517, 64 N.W.2d 195. The statute provides that the insurance afforded by the contract shall not apply to a person other than a named assured unless the riding, use, or operation of the automobile is with the permission of the named assured. The policy in question affords protection to any person while using the vehicle or legally responsible for its use, provided the actual use is by the named assured or with his permission. A distinction is recognized in this state between the words "use" and "operate." In Schimke v. Mutual Automobile Ins. Co., supra, the court cited with approval Maurer v. Fesing (1940), 233 Wis. 565, 290 N.W. 191, where in substance, at page 571, it was held that the consent which is required under the provisions of a policy is not to the operation of the car by the person to whom the coverage benefits are claimed to inure, but is merely to its being used with the consent of the named insured at the time in question.

We subscribe to the observation in Brown v. Kennedy (Ohio App. 1942), 49 N.E.2d 417, 418:

"The general rule is, that language used in a policy of insurance being selected by the insurer should be construed most favorably to the insured, giving the language used its fair and reasonable meaning. 5 Am. Jur. 806, section 534; Couch on Insurance, section 1175, vol. 5, p. 4175; 22 Ohio Juris. 339, 340, sections 184, 185; Duncan v. John Hancock Mut. Life Ins. Co. 137 Ohio St. 441, 445, 31 N.E.2d 88.

"This rule as applied to a case where the insurer claims a limited interpretation of the terms `use' or `using' would seem to mean that where the terms `use' or `using' are employed in the policy, and there are included within their fair definition and interpretation words or meanings which would attach liability or defeat it, the terms employed should be given the recognized fair and reasonable meaning which causes liability under the policy to attach.

"In the instant case the terms in question are `use' and `using.' Now a car would be used by a person, whether it was operated personally or through the services of another. If the insurer meant that liability should only attach when it was being operated or driven by the owner or some one with his consent, and it is claimed the word `used' includes the term `operated' — then the insurer should have employed the word carrying in its meaning the narrower limitation of liability."

In the case at bar it is uncontroverted and it was found that the permission granted by the named assured, Lucille Minnihan Allen to the use of the car by the son, William, was coupled with the direction that the son was not to let anyone else drive the car on the trip. It was the right of the mother to have consented to the use of the car by the son, or to have refused such permission. Her consent was to a restricted use rather than to an all-comprehensive one. Since it was within her right to refuse permission, it cannot be held that she did not have the power to grant permission on a limited basis. The permission of the use of the car to the son was upon condition that in its use by him, only he would operate it. The mother was entitled to restrict the use in such manner. Had she not by her direction restricted the use, then, under the authorities cited above, the son's delegation of the driving to George Rogers would have brought Rogers within the purview of the protection provided by the insurance policy. However, since Rogers' driving of the car was outside the use of it as permitted to William Allen by his mother, in other words, since the use to which the car was put by the permittee was not in conformity with that permitted by the named assured, we are compelled to determine that the coverage of the policy did not extend to Rogers when he drove the car at the time in question.

Respondents contend that an emergency situation was created when William found himself tired and nervous and requested Rogers to drive before the party left Pewaukee, and that hence the consent of Mrs. Allen to permit George Rogers to drive, was implied from the circumstances. The court determined that William Allen had requested George Rogers to drive because he was too tired. That finding was based upon credible evidence. Respondents urge that the situation, while not one of principal and agent, nevertheless is analogous in principle to such relationship, and that the rules applicable to agency by emergency or necessity ought to control here. They submit that the unforeseen emergency reasonably enlarged the existing authority conferred by Mrs. Allen upon her son. However, it must be borne in mind, that under the law of agency, it is the principal's purpose and plans that are to be subserved, and he is the one to decide, where possible, how the emergency is to be met. If it is possible to communicate with the principal when emergency arises, it is the duty of the agent to do so in order that the principal's advice or direction can be obtained. 1 Mechem, Agency (2d ed.), p. 507, sec. 718. In the present circumstances, were it to be considered that an emergency had been created, Mrs. Allen would have been entitled to have been notified of it in order that her direction could be obtained. It does not appear that any effort was made to communicate with her or that it was impossible to do so. The proof falls short of establishing implied consent because of emergency.

The driving of the car by Rogers was without the express or implied consent of the named assured, and hence was not within the protection of the policy.

At the trial, counsel for plaintiffs offered in evidence a certified copy of the SR-21 form as filed by the defendant Insurance Company with the motor vehicle department. The court ruled that the exhibit was inadmissible for the reason that it is in the nature of a statement of financial responsibility and does not alter the terms of the insurance contract. Subsequent to the trial court's rendition of the judgment herein, this court in Laughnan v. Griffiths (1955), 271 Wis. 247, 73 N.W.2d 587, determined that an automobile liability insurance company can make itself liable on a policy issued by it, where, after investigating the facts, it, acting through a duly authorized agent or employee, voluntarily files with the commissioner of the motor vehicle department an SR-21 form admitting coverage as to the accident described in such SR-21, intending to be bound thereby, even though without the filing of the SR-21 it might not be liable. In the Laughnan Case it was determined that an SR-21 may be admissible against interest on the part of the company which has filed the same. (The writer of this opinion joined in the dissent from the majority decision in the Laughnan Case and still is of the same view as expressed in the dissenting opinion there.)

If, in the instant situation, the court in accordance with the rule in the Laughnan Case had determined upon the basis of credible evidence that the company had investigated the facts and had acted through a duly authorized agent or employee in voluntarily filing the SR-21 form and that the company intended to be bound by such filing, then the SR-21 form offered in evidence as an exhibit, would have been admissible as against interest. The failure of the court to have made determination with respect to such considerations, constituted reversible error. The plaintiffs-respondents are entitled to a new trial upon appropriate pleadings with respect to the issue as to whether the Insurance Company acknowledged and assumed liability for Rogers' driving of the Allen car when it filed the SR-21 report.

By the Court. — Judgment reversed, and cause remanded for a new trial consistent with the opinion herein.

One of the rules of this case is fixed by Laughnan v. Griffiths (1955), 271 Wis. 247, 73 N.W.2d 587, and for that reason alone I concur in the court's opinion. I consider, however, that I should call attention to the fact that in the former case we suggested and have now made it quite clear that it is possible for a jury, as well as the court, to supply the missing contract. It remains only for the trial court, when the issue is submitted to a jury, to devise the means of ascertaining by the jury's verdict what the terms of that contract are.

While I concur in the opinion of the court in this case, I am fearful that as such opinion now stands there is a possibility of the trial court being misled as to the issues to be tried out in the new trial with respect to the legal effect to be accorded filing of the SR-21. That to which I have particular reference are the words "intending to be bound thereby" which the opinion quotes from our decision in Laughnan v. Griffiths (1955), 271 Wis. 247, 259, 73 N.W.2d 587. It will be recalled that in the Laughnan Case we were concerned with an allegation on the part of the Insurance Company that it had filed the SR-21 by mistake, and the above-quoted words had direct reference to such issue of mistake.

The Safety Responsibility Law and not the secret intention of the Insurance Company, which has voluntarily filed an SR-21, must govern the legal effect of such filing. The words " intending to be bound thereby" of the Laughnan Case should be interpreted as meaning no more than that the company files the SR-21 for the purpose of complying with the provisions of sec. 85.09 (5) (d), Stats. A mistaken idea of what the legal consequences are which may result from such filing will not relieve it from liability. Such is not the type of mistake with which we were dealing in the Laughnan Case.

I cannot agree with the statement made by Mr. Justice GEHL in his concurring opinion that any jury issue is presented in a case of this kind as to what the contract of insurance is. That is always a matter of law for the court to determine. The jury issues with respect to the filing of the SR-21 in the instant case will be limited to whether the same was filed voluntarily with intent to comply with sec. 85.09 (5) (d), Stats., and whether the person filing the same in behalf of the Insurance Company had actual or ostensible authority to file the SR-21.

Summaries of

Prisuda v. General Casualty Co.

Supreme Court of Wisconsin
Feb 7, 1956
74 N.W.2d 777 (Wis. 1956)

In Prisuda v. General Casualty Co. (1956), 272 Wis. 41, 74 N.W.2d 777, we pointed out "use" and "operation" in the omnibus clause were not the same.

Summary of this case from Lukaszewicz v. Concrete Research, Inc.

In Prisuda v. General Casualty Co. (1956), 272 Wis. 41, 74 N.W.2d 777, no pleadings referred to the SR-21 filed by the defendant and the SR-21 was held inadmissible.

Summary of this case from Schneck v. Mutual Service Cas. Ins. Co.

In Prisuda v. General Casualty Co. (1956), 272 Wis. 41, 74 N.W.2d 777, the facts were that permission was given to the son to use the mother's automobile to go on a swimming party.

Summary of this case from Bauer v. Hardware Mut. Casualty Co.

In Prisuda v. General Casualty Co. (1956), 272 Wis. 41, 74 N.W.2d 777, the named insured had given her seventeen-year-old son permission to use the automobile for a specified purpose with the express direction that he was not to let anyone else drive the car.

Summary of this case from Boehringer v. Continental Casualty Co.

In Prisuda v. General Casualty Co., 272 Wis. 41, 74 N.W.2d 777 (1956), a mother gave her son permission to use a car but specifically instructed that no one else be allowed to drive it.

Summary of this case from Hinz v. Leet

In Prisuda, the original driver, Allen, was a young man whose parents had allowed him to drive some friends to a swimming party but had specifically admonished him not to let anyone else drive the car.

Summary of this case from Meshbesher v. State Farm Mut. Auto. Ins. Co.

In Prisuda v. General Casualty Co., 272 Wis. 41, 74 N.W.2d 777 (1956), (Gehl and Currie, JJ., concurring), the court found that a real emergency situation did not exist, and the court held that, where possible, the permittee should communicate with the named insured in order that the latter decide how to meet the emergency.

Summary of this case from American Family Mut. Ins. Co. v. Osusky
Case details for

Prisuda v. General Casualty Co.

Case Details

Full title:PRISUDA, by Guardian ad litem , and others, Respondents, vs. GENERAL…

Court:Supreme Court of Wisconsin

Date published: Feb 7, 1956


74 N.W.2d 777 (Wis. 1956)
74 N.W.2d 777

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