Canal Ins. Co. v. Paul

• Court: Tennessee Court of Appeals
• Writing for the Court: McAMIS
• Citation: Canal Ins. Co. v. Paul, 51 Tenn.App. 446, 369 S.W.2d 393 (Tenn. App. 1962)
• Decision Date: 04 December 1962
• Parties: CANAL INSURANCE COMPANY, Defendant, Appellant, v. Wayne B. PAUL, Complainant, Appellee.

Page 393

369 S.W.2d 393

51 Tenn.App. 446

CANAL INSURANCE COMPANY, Defendant, Appellant, v. Wayne B. PAUL, Complainant, Appellee.

Court of Appeals of Tennessee, Eastern Section.

Dec. 4, 1962 Certiorari Denied by Supreme Court June 4, 1963.

Arthur D. Byrne and Poore, Cox, Baker & McAuley, Knoxville, for defendant, appellant.

Sidney Davis, Clinton, for complainant, appellee.

McAMIS, Presiding Judge.

Wayne B. Paul filed the bill in this case seeking a declaratory judgment that his public liability policy in the defendant Canal Insurance Company entitled him to protection under a policy provision reading:

'Temporary Substitute Automobile--an automobile not owned by the named insured or his spouse if a resident of the same household, while temporarily used as a substitute for the described automobile when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction.'

Under the facts to be stated, the Chancellor held the Company obligated to defend an action for damages resulting from the operation of a Studebaker automobile owned by Clyde Chapman while being used by the insured as a taxicab. The defendant company has appealed. The correctness of the Chancellor's decision turns on whether the Studebaker at the time of the accident was a substitute automobile within the meaning of the policy provision above quoted.

In June, 1958, defendant issued to complainant a policy of public liability insurance insuring complainant as a 'taxicab operator'. The policy described the automobile covered as a 1955 model Ford and stated that it was to be used as a taxicab. The policy was renewed on June 8, 1959. On June 28, 1959, the Ford described in the policy was involved in a collision necessitating extensive repairs. In order to be able to continue his business insured induced A. B. Casey to purchase the Studebaker here in question and allow him to use it as a taxicab while the Ford was being repaired.

After about 30 days the Ford was brought from the repair shop and again put in service as a taxicab but, after two or three trips, insured found that one of the doors rattled causing passengers to become apprehensive that it might open. The repairman promised to repair the door as soon as he could get to it but, as it turned out, no repairs were made for the period of about six weeks prior to the time the Studebaker was involved in the accident which gave rise to this suit. In the meantime during the daytime the Ford sat on the lot from which insured operated his business where the repairman was expected to get it for the purpose of repairing the door. It was not thereafter used as a taxicab but during this period the insured used it to go to and from work and on occasions it was also used by his wife. During this period only the Studebaker was used by insured as a taxicab and while it was being so used defendant's agent visited the lot to collect premiums on the policy. He tacitly admits that he saw a taxicab sign on the Studebaker.

Policy provisions allowing the temporary substitution of an automobile not owned by the insured for the one described in the policy are governed by the same rules of construction as other insurance contracts and are to be liberally construed and applied in favor of the insured. They are not to be narrowly construed as...