Employers Mut. Liability Ins. Co. of Wis. v. Puryear Wood Products Co.

Decision Date24 November 1969
Docket NumberNo. 5-5053,5-5053
Citation247 Ark. 673,447 S.W.2d 139
PartiesEMPLOYERS MUTUAL LIABILITY INS. CO. OF WISCONSIN, Appellant, v. PURYEAR WOOD PRODUCTS CO., Appellee.
CourtArkansas Supreme Court

Rose, Meek, House, Barron, Nash & Williamson, Little Rock, for appellant.

Gill & Clayton, Dumas, for appellee.

HARRIS, Chief Justice.

This appeal relates to the construction of certain words appearing under the exclusions section in an insurance policy, the policy providing that it does not apply to property damage to:

'(2) property used by the insured, or

'(3) property in the care, custody or control of the insured or as to which the insured is for any purpose exercising physical control; * * *'

According to the stipulation entered into by the parties to this litigation, Puryear Wood Products Company, Inc., appellee herein, hereafter called Puryear, operated a sawmill at Mitchellville, Desha County, Arkansas, and had contracted with one Clifford Landon of Dumas to haul sawdust away from its plant. The sawdust was blown through a system of pipes from the plant to a point approximately 300 feet from the buildings, but still on appellee's property, and Landon or an employee, would park one of his trucks and trailers at that particular location. Employees of Puryear would then insert the pipe into the rear of the trailer, and the sawdust was blown into this trailer until it was full. It usually took about two days for the trailer to be filled, and when it was full, one of Puryear's employees would call Landon, and he would drive the truck and trailer away. Landon had instructed Puryear that when the truck needed moving, to call him, because he did not want anyone else to move it; while a trailer was being filled, it was left unattended.

The previous paragraph sets out the manner of operation in general, and about the 15th of June, 1967, Landon had parked a truck and trailer at the aforementioned site for the purpose of having it loaded with sawdust; one of appellee's employees inserted the blow pipe into the rear of the trailer, and it was thereafter left unattended. After some period of time, and while the sawdust was being blown into the trailer, a fire of undetermined origin started in or about the sawdust, or in or about the trailer, and damaged the trailer. At the time this happened, Landon's tractor was attached to the trailer, and the keys were in the ignition. Thereafter, Landon instituted suit in the Circuit Court of Desha County against Puryear seeking to recover damage caused by the fire to his trailer. Appellee held a policy of liability insurance in the sum of $100,000.00 with Employers Mutual Liability Insurance Company of Wisconsin, appellant herein. Under the contract, the company agreed to pay on behalf of the policyholder all sums which Puryear should become legally obligated to pay as damages because of property damage. Puryear contacted the insurance company after being sued, but the latter declined to defend the suit on behalf of Puryear, contending that the exclusions (previously set out in the first paragraph) made the coverage of the policy inapplicable to property used by Puryear or property in its care, custody or control, or as to which it for any purpose was exercising physical control. Suit was instituted by Puryear, seeking a declaratory judgment to the effect that the insurance company was obligated under the policy to provide coverage and to defend against the Landon suit. After the filing of an answer, the cause was submitted to the court on a stipulation embracing the facts heretofore set out. The court found, as follows:

'Based upon the stipulated facts and applicable authority, it is the finding of this Court that the defendant has not sustained its burden of proving that the plaintiff had possessory control of the trailer at the time of the occurrence, and that plaintiff was not 'using' the trailer and did not have the 'care, custody or control' of the trailer within the meaning of these terms as used in said policy, at the time of the occurrence; and that defendant has the duty under its insurance policy to defend the suit by Clifford Landon against the plaintiff.'

From the judgment entered in accordance with this finding, appellant brings this appeal. For reversal, it is simply asserted that the trial court erred in holding that appellant company was obligated to afford Puryear a defense to the Landon complaint, and to pay any judgment rendered against Puryear.

At the outset, it might be mentioned that appellant's duty to defend the Landon suit would normally be determined by the allegations in the Landon complaint. We have held that the allegations in a complaint determine the obligation of the insurer to defend it insured. Fisher v. Travelers Indemnity Company, 240 Ark. 273, 398 S.W.2d 892, and cases cited therein. However, appellant does not contend that this court, in determining this question, is confined to those allegations. That complaint alleges that the trailer was in the care, custody and control of Puryear, but it also alleges that the damage to the trailer was a result of the negligence of Puryear. Since it would be possible that a jury could find that the loss was due to Puryear's negligence without also finding that the trailer was in its care, custody and control, it is apparent that appellant's obligation to defend cannot be determined simply from the allegation in the Landon complaint.

It is argued by appellant that Landon had surrendered to Puryear the care of the trailer and its custody and control, and Puryear was thus a bailee, i. e., the custodial possession of Puryear was in legal effect a bailment. The case of Bertig v. Norman, 101 Ark. 75, 141 S.W. 201, defines a bailment, and appellee's argument is that a bailment carries with it the surrender of possession and custody. However, the stipulation sets out that Puryear did not have the right to move the truck and trailer, and in fact, if it should become necessary that same be moved, appellee was required to notify Landon, who would then send a driver to move the vehicle; because of this fact, we cannot agree that there was a surrender of possession or custody, and Bertig v. Norman, supra, points out this distinction.

In 62 A.L.R.2d, Page 1244, in an annotation, 'Liability...

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