Bendall v. Home Indem. Co.

• Decision Date: 25 June 1970
• Docket Number: 8 Div. 269
• Citation: 286 Ala. 146,238 So.2d 177
• Parties: Farris Wilkerson BENDALL v. The HOME INDEMNITY COMPANY, a Corp.
• Court: Alabama Supreme Court

Page 177

238 So.2d 177

286 Ala. 146

Farris Wilkerson BENDALL v. The HOME INDEMNITY COMPANY, a Corp.

8 Div. 269.

Supreme Court of Alabama.

June 25, 1970.

Hopper & Hornsby, Huntsville, for appellant.

Ford, Caldwell, Ford & Payne, and W. Stanley Rodgers, Huntsville, for appellee.

COLEMAN, Justice.

One of the respondents, to a bill for declaratory relief, appeals from the final decree, wherein the court declared that an automobile liability insurance policy is void and that the insurer is not liable to defend the named insured, or the other defendants, in an action brought against them by appellant, or to pay any judgment which appellant may recover in the action. The reason for the trial court's holding is a finding that the named insured had no insurable interest in the liability coverage of the policy.

The complainant is a corporation, which is authorized to write automobile liability insurance policies. Complainant will sometimes be referred to as insurer.

There are four respondents. Two of them are H. O. Davis, Jr., and his wife, Susie Randolph Davis, both of whom are over the age of twenty-one years. A third respondent is Wanda Faye Randolph McCutcheon, who is a married woman and is twenty years old. She was not married at the time the policy was issued. Wanda is the sister of the respondent, Mrs. Davis. The fourth respondent is Farris Wilkerson Bendall who is over the age of twenty-one years. Bendall is the appellant. The other respondents have been cited to join in the appeal but have filed no brief.

In paragraph 4 of the bill, complainant alleges that it '. . . entered into a contract of automobile liability, medical payments, comprehensive, and collision insurance with the Respondent Susie Randolph Davis, who is the wife of H. O. Davis, Jr. and is designated in the declarations of said policy as Mrs. H. O. Davis, Jr., to extend for a period of one year, beginning August 17, 1963, and expiring August 17, 1964. Said policy of insurance declares that Mrs. H. O. Davis, Jr. is the named insured. . . ..' Complainant further avers that the policy declares that the description of the 'owned automobile' is a "1959 Ford 2 Dr. . . ." identified by a stated motor number.

In paragraph 5, complainant avers that by the policy provisions, insurer agreed to pay on behalf of insured, subject to terms of the policy, all sums insured shall become legally obligated to pay as damages because of bodily injury sustained by any person and property damage arising out of '. . . the ownership, maintenance or use of the owned automobile . . .,' and to defend any suit alleging such bodily injury or property damage and seeking damages which are payable under the policy. The policy further provides that the insureds under the policy, with respect to the owned automobile, are the named insured and any resident of the same household and any other person using such automobile with permission of the named insured.

In paragraph 6, complainant avers that the policy defines 'owned automobile' as the automobile '. . . described in this policy for which a specific premium charge indicates that coverage is afforded . . ..'

In paragraph 8, complainant avers that, at time of issuance of the policy and at all times thereafter, the named insured, Mrs. Davis, was not the owner of the automobile described in the policy and that the respondent Wanda Faye McCutcheon was the owner, having purchased the automobile from Dan C. Long in August, 1963.

In paragraph 9, complainant avers that the named insured represented and warranted to complainant that the named insured was the owner of the described automobile when she was not the owner, and that the misrepresentation or warranty was made with actual intent to deceive or increased the risk of loss.

In paragraph 10, complainant avers that on July 1, 1964, while respondent Wanda Faye Randolph McCutcheon was operating the described automobile, she was involved in an automobile accident with the respondent Bendall. $In paragraph 11, complainant avers that appellant, Bendall, is plaintiff in an action he has brought against the other respondents, Wanda Faye and Mr. and Mrs. Davis, and that said action arose out of the July 1, 1964 accident.

In paragraphs 12 and 13, complainant avers that there is subsisting an actual controversy between the parties on which substantial property rights are dependent, and that complainant is entitled to a decree declaring rights and duties of the parties under the policy.

Complainant prays for a declaration that the policy is void and that complainant is not liable to defend appellant's action against the other respondents or to pay any judgment rendered against them in that action.

Respondents Wanda Faye and Mr. and Mrs. Davis answered the original bill and admitted its allegations except those of paragraphs 8, 9, 12, and 13, which they denied. In their answer to paragraphs 8 and 9, they also averred that no false representations were made but further that complainant was fully aware of the true ownership of the described automobile.

In his separate answer, appellant admitted the allegations of paragraphs 1, 2, 3, 10, 11, 12, and 13 of the original bill. As to paragraphs 4, 5, 6, 7, 8, and 9, appellant answered that he did not have sufficient knowledge to admit or deny the allegations therein.

Complainant filed an amendment to the bill which made the following changes in it:

Paragraph 9 was amended so as to allege that '. . . Susie Randolph Davis, H. O. Davis, Jr., or Wanda Faye McCutcheon . . .' misrepresented that the named insured was the owner of the automobile;

The amendment added paragraph 9--A wherein complainant alleged that the named insured, Mrs. H. O. Davis, Jr., had no insurable interest in the described automobile at time of issuance of policy or thereafter;

Paragraph 10--A was added, wherein complainant avers that at the time of the accident, Wanda Faye was operating the automobile without permission of the named insured.

The three respondents, Wanda Faye and Mr. and Mrs. Davis, '. . . for answer to the complaint as amended say that they deny the averments thereof.'

For answer to the amended complaint, appellant says:

'1. That Respondent does not have sufficient knowledge to admit or deny the allegations and averments of matters contained in the amended complaint.'

After a hearing ore tenus, the court rendered the decree appealed from, in which findings and opinion are set out as follows: $'Upon consideration of same the Court finds as follows: That on the 17th day of August, 1963, the Complainant entered into a contract of automobile liability insurance with the Respondent Mrs. H. O. Davis, Jr., also known as Susie Randloph Davis, said policy being for a period beginning August 17, 1963, and expiring August 17, 1964, and said policy was renewed for a period extending from August 17, 1964, to August 17, 1965. Said policy covered the 1959 Ford 2-door automobile described in the original bill of complaint. This Ford automobile covered by the policy of liability insurance was purchased by the Respondent Wanda Faye McCutcheon, was paid for by her and the premiums on the insurance policy were also paid by her. Title to the car was at all times in the Respondent Wanda Faye McCutcheon and she was the registered owner and at no time after she purchased the car was the title thereto in the Respondent, Mrs. H. O. Davis, Jr., or her husband, H. O. Davis, Jr., nor did they claim any interest therein. At the time the Ford automobile was purchased by Wanda Faye McCutcheon a chattel mortgage on said automobile securing a promissory note in the sum of Six Hundred Ninety-Eight and 75/100 ($698.75) Dollars payable to the American National Bank of Bridgeport, Alabama was signed by Mrs. H. O. Davis, Jr., and her husband H. O. Davis, Jr. The president of the American National Bank of Bridgeport, Alabama, who loaned the money on the note and Chattel mortgage also represented the Complainant insurance company and issued the liability insurance policy to Mrs. H. O. Davis, Jr., on the automobile described in the chattel mortgage. He also issued the renewal policy. The policy of insurance came into the possession of the Respondent Wanda Faye McCutcheon shortly after it was issued. On the 1st day of July, 1964, the Respondent Wanda Faye McCutcheon was involved in an automobile accident with the Respondent Farris Wilkerson Bendall while she was operating the Ford automobile described in the policy of insurance issued to Mrs. H. O. Davis, Jr. At the time of said accident the Respondent Wanda Faye McCutcheon was not on any business for the Respondent Mrs. H. O. Davis, Jr., (Susie Randolph Davis) but was on her way from the place where she worked to the place where she lived. The Respondent Wanda Faye McCutcheon knew that the policy of insurance on the automobile was issued in the name of her sister, Mrs. H. O. Davis, Jr., but Mrs. Davis denies having any knowledge that the policy was issued in her name until after the automobile accident and the suit by the Respondent Farris Wilkerson Bendall.

'The Court is of the opinion that the Respondent Mrs. H. O. Davis, Jr., had no insurable interest in the automobile described in the policy of insurance issued in her name nor were the circumstances of the ownership of the car by the Respondent Wanda Faye McCutcheon such that the Respondent Mrs. H. O. Davis, Jr. would be legally responsible for any damages resulting from its use by Wanda Faye McCutcheon at the time of the accident on the 1st day of July, 1964, and the policy of liability insurance issued to Mrs. H. O. Davis, Jr., upon said motor vehicle is invalid and unenforceable. (Ocean Accident & Guarantee Co. v. Bear, 125 So. 676, 220 Ala. 491; Rogers v. Lumberman's Mutual Casualty Co., 124 So.2d 70, 271 Ala. 348; 44 C.J.S. Insurance, Par. 198, page 896; Annotation: 1 ALR3d 1193; 7 Am.Jur.2d Par. 13, page 307).'

Appellant has made ten assignments of error and...