Equity Mut. Ins. Co. v. Riley, s. 34044

• Decision Date: 23 November 1971
• Docket Number: Nos. 34044,34050,s. 34044
• Citation: 475 S.W.2d 416
• Parties: EQUITY MUTUAL INSURANCE COMPANY, a corporation, Plaintiff-Respondent, v. William Ray RILEY, Defendant-Appellant, and Ronald A. Cummins, Intervenor-Appellant.
• Court: Missouri Court of Appeals

Page 416

475 S.W.2d 416

EQUITY MUTUAL INSURANCE COMPANY, a corporation, Plaintiff-Respondent, v. William Ray RILEY, Defendant-Appellant and Ronald A. Cummins, Intervenor-Appellant.

Nos. 34044, 34050.

St. Louis Court of Appeals, Missouri.

Nov. 23, 1971.

Motion for Rehearing and to Transfer to Supreme Court Denied

Jan. 3, 1972.

Application to Transfer Denied Feb. 22, 1972.

Armstrong, Teasdale, Kramer & Vaughan by John J. Cole and Frank N. Gundlach, St. Louis, for plaintiff-respondent.

Benson Cytron, House Springs, for intervenor-appellant.

CLEMENS, Commissioner.

The issue in this declaratory judgment action is whether the plaintiff-liability insurer (Equity Mutual) can disclaim its coverage on the ground that a non-owned automobile driven by the defendant-insured was furnished for the regular use of the defendant-insured.

Plaintiff had issued its public liability policy to defendant Riley covering a 1966 Pontiac. When that car was repossessed by a mortgagee Riley got possession of, but did not validly purchase, a 1954 Ford. Three days later Riley drove the Ford into collision with Ronald A. Cummins who later sued Riley for damages.

Equity Mutual filed this action for a declaratory judgment that it was not liable under its policy on the ground its coverage did not extend to the non-owned 1954 Ford driven by Riley since it was 'furnished for his regular use.' The injured Cummins intervened and counterclaimed for a declaratory judgment that Equity Mutual was liable under its policy. The trial court found for Equity Mutual and Riley and Cummins appeal. The two appeals have been consolidated.

The insuring clause of Equity Mutual's policy covered bodily injury and property damage 'caused by accident and arising out of the ownership or use of the owned automobile or the use by the named insured of a non-owned automobile . . .' (Our emphasis).

Standing alone, that language covered Riley's Ford as a non-owned automobile. Equity Mutual seeks to avoid this by relying on the policy definition of a non-owned automobile as one 'not owned by or furnished for the regular use of the named insured . . .'

We look to the evidence concerning Riley's acquisition and use of the Ford. As said, the 1966 Pontiac described in the policy was repossessed by the mortgagee. To have transportation to work, Riley 'bought' the 1954 Ford from his friend Michael Mudd for $125. Mudd had 'bought' it from the registered owner, Thomas Abbott. Although Abbott had signed the title certificate his signature had not been notarized nor had the name of an assignee been inserted. All parties now agree defendant Riley did not 'own' the Ford.

When Riley got the Ford it had no workable transmission. He promptly repaired it and had the collision with Cummins on the first day he drove it. When Riley got the Ford he considered it was not good enough for any use except getting to and from work; he did nothing about getting a title or license plate; he intended to use it 'well, not regular, just temporary.' Riley had not yet made definite plans to get another car but intended to do so in the near future.

As do most automobile insurance policies this one afforded both primary and secondary coverage. Primary coverage was for the 1966 Pontiac described in the policy. Secondary coverage was for other automobiles the insured might be driving, either owned or non-owned. For example, the policy covered any other automobile bought by the insured to replace the automobile described in the policy. And, as pertinent here the policy also covered a non-owned automobile unless, as the definition declared, it was 'furnished for the regular use' of the insured.

Equity Mutual...