Gray v. International Service Ins. Co.

• Decision Date: 28 October 1963
• Docket Number: No. 7275,7275
• Citation: 73 N.M. 158,386 P.2d 249,1963 NMSC 195
• Parties: Orville G. GRAY, Plaintiff-Appellant, v. INTERNATIONAL SERVICE INSURANCE COMPANY, Defendant-Appellee.
• Court: New Mexico Supreme Court

Page 249

386 P.2d 249

73 N.M. 158

Orville G. GRAY, Plaintiff-Appellant, v. INTERNATIONAL SERVICE INSURANCE COMPANY Defendant-Appellee.

No. 7275.

Supreme Court of New Mexico.

Oct. 28, 1963.

Lorenzo A. Chavez, Melvin L. Robins, Albuquerque, for appellant.

Shaffer & Butt, Albuquerque, for appellee.

CHAVEZ, Justice.

This is an appeal from a summary judgment granted to defendant-appellee, International Service Insurance Company, in a suit fordeclaratory judgment to determine the liability under a family automobile policy issued by appellee to plaintiff-appellant, Orville G. Gray.

Appellee agreed to pay, on behalf of appellant, all sums which appellant would become obligated to pay as damages because of bodily injury sustained by any person and property damages arising out of the ownership, maintenance or use of a 1958 Chevrolet automobile and any non-owned automobile. Appellee also agreed to defend any suit brought against appellant alleging bodily injury or property damage. Under 'PART I--LIABILITY,' the policy provides:

'PERSONS INSURED

'The following are insureds under Part I:

'(a) With respect to the owned automobile,

'(1) the named insured and any resident of the same household,

'(2) any other person using such automobile, provided the actual use thereof is with the permission of the named insured;

'(b) With respect to a non-owned automobile,

'(1) the named insured,

'(2) any relative, but only with respect to a private passenger automobile or trailer,

provided the actual use thereof is with the permission of the owner;

'(c) Any other person or organization legally responsible for the use of

'(1) an owned automobile, or

'(2) a non-owned automobile, if such automobile is not owned or hired by such person or organization,

provided the actual use thereof is by a person who is an insured under (a) or (b) above with respect to such owned automobile or non-owned automobile.'

Under 'PART III--PHYSICAL DAMAGE, DEFINITIONS,' the policy further provides:

"Insured' means * * * (b) with respect to a non-owned automobile, the named insured and any relative provided the actual use thereof is with the permission of the owner;

"non-owned automobile' means a private passenger automobile or trailer not owned by or furnished for the regular use of either the named insured or any relative, other than a temporary substitute automobile, while said automobile or trailer is in the possession or custody of the insured or is being operated by him;' Appellant was driving a non-owned automobile, which subsequently turned out to be stolen, and became involved in an automobile accident with a car operated by one Donald Fuller, as a result of which Fuller was injured. Fuller filed suit for damages against appellant. Appellee refused to defend the suit, contending that appellant was afforded no coverage for the reason that the policy covers appellant in a non-owned vehicle only where permission for its use is granted by the owner. Appellant then filed suit for a declaratory judgment in Bernalillo County. Motion for summary judgment was made and granted in favor of appellee on the ground that the complaint failed to state a claim against appellee. The motion for summary judgment was based upon the pleadings, records files and the affidavit of one of appellee's attorneys, to the effect that appellant was afforded no coverage because the policy covers appellant in a non-owned automobile, only where permission for its use is granted by the owner; and that the vehicle was non-owned, was in fact a stolen car, and obviously no permission had been granted for its use by the owner to appellant.

Appellant appears to concede that, under the comprehensive and personal effects coverage of the policy, appellee is not liable for damages caused by the insured while driving a non-owned automobile, if the insured has not obtained the consent of the owner.

Appellant cites Sperling v. Great American Indemnify Company, 7 N.Y.2d 442, 199 N.Y.S.2d 465, 166 N.E.2d 482, in support of his contention that coverage was afforded to appellant under the terms of the policy while he was driving a stolen car. Sperling involved the 16-year-old daughter of the insured who, while driving a stolen automobile, negligently collided with another vehicle. The pertinent terms of the family automobile policy stated:

'(b) With respect to a non-owned automobile, (1) the named insured, (2) any relative, but only with respect to a private passenger automobile or trailer not regularly furnished for the use of such relative.'

The court held that since permission to use a non-owned automobile was not made a condition of coverage with respect to a relative of the named insured, 'The court is not at liberty to inject a clause into the policy or to make a new contract for the protection of the insurance company.' In Sperling, the insurer argued that the policy was never 'intended' to cover a relative who negligently caused injury with a 'stolen' car. The court stated that...