American Auto Ins. Co. v. Jones

• Decision Date: 23 January 1932
• Citation: 45 S.W.2d 52,163 Tenn. 605
• Parties: AMERICAN AUTOMOBILE INS. CO. v. JONES.
• Court: Tennessee Supreme Court

45 S.W.2d 52

163 Tenn. 605

AMERICAN AUTOMOBILE INS. CO. v. JONES.

Supreme Court of Tennessee.

January 23, 1932

Appeal from Chancery Court, Shelby County; M. C. Ketchum Chancellor.

Suit by Fern Jones against the American Automobile Insurance Company. From a decree for complainant, defendant appeals.

Reversed and suit dismissed.

Knipmeyer & Dixon and J. S. Edmondson, all of Memphis, for complainant.

Miles Waring & Walker and W. H. Borsje, all of Memphis, for defendant.

CHAMBLISS J.

This suit was brought to recover on an indemnity policy issued to Iten Biscuit Company. Fern Jones was injured while riding as a guest, by invitation of one Wilkes, an employee of the biscuit company, in a car owned by the company, the named assured in the policy. The policy carried a rider providing for coverage of employees using the company's cars with its consent, reading as follows:

"That in addition to the assured named in this policy, such insurance as is granted hereunder shall be available, in the same manner and under the same conditions and to the same extent as it is available to the Assured named herein, to any person or persons, except chauffeurs and domestic servants, while riding in or legally operating the automobile covered by this policy, and to any person, firm or corporation legally responsible for the operation thereof; but only while it is being used for the purposes specified in Statement III. of the Schedule of Statements and with the consent of the Assured named herein, or, if such Assured is an individual, of an adult member of his household who is not a chauffeur or domestic servant."

At the time of the accident, while Wilkes was in the car, it was being driven by one Thrice, a stranger to the company, without the knowledge of the company. Also, at the time Wilkes had the car beyond and outside of the territory assigned to him as a salesman of the biscuit company.

Fern Jones recovered a judgment against both Wilkes and Thrice. The theory of this action is that Wilkes was an "additional assured," and that, he being insolvent, Fern Jones is entitled to recover from the insurance company the indemnity to which Wilkes, as such an "additional assured," would have been entitled had he paid the judgment.

The cause was heard by the chancellor on a stipulation of facts, and he gave judgment for Jones. The insurance company appeals, and insists that protection under the "additional assured" rider does not extend to this case, where the car had not only been diverted from the purpose for which it was placed in possession of the employee, Wilkes, by the owner, the named assured, but was being used in a manner, that is, being driven by a party, not only unauthorized by the owner, but contrary to its positive instructions, as shown by the stipulation of the parties in the record.

Appellant relies on the recent holding of this court in Stovall v. New York Indemnity Co., 157 Tenn. 301, 8 S.W.2d 473, 474, 72 A. L. R. 1368, construing a similar policy, and extending its coverage to a case in which the car owned by the named assured, after having come by permission of the owner into the possession of the employee, the "additional assured," was, at the time of the accident, being driven by him outside of his territory, and for a purpose beyond the scope of his employment and authority.

We are of opinion that the instant case is to be distinguished from the Stovall Case. The language of the policy clauses covering the additional assured is much the same, there being this variance in the most pertinent paragraph. In the Stovall Case the wording is, "providing such use or operation is with the permission of the named assured" while in the...