Haeuser v. Aetna Cas. & Sur. Co.

• Decision Date: 10 April 1939
• Docket Number: 17095
• Citation: 187 So. 684
• Parties: HAEUSER v. AETNA CASUALTY & SURETY CO. et al.[*]
• Court: Court of Appeal of Louisiana — District of US

187 So. 684

HAEUSER v. AETNA CASUALTY & SURETY CO. et al.^[*]

No. 17095

Court of Appeal of Louisiana, Orleans.

April 10, 1939

Decree Corrected April 24, 1939

Appeal from Civil District Court, Parish of Orleans; Nat W. Bond Judge.

On rehearing.

Original decree recalled and set aside, and judgment of trial court amended and affirmed.

For former opinion, see 185 So. 493.

JANVIER, J., dissenting.

Language employed in an automobile collision policy is to be construed so as to effectuate the insurance, and if language is ambiguous it will be construed in favor of insured.

James W. Hopkins, of New Orleans, for appellant.

E Assenheimer, of New Orleans, for appellee Chas. W. Hanna.

St. Clair Adams & Son, of New Orleans, for appellees Chas. T. Kerner and Aetna Casualty & Surety Co.

WESTERFIELD Judge.

We granted a rehearing in this case for the purpose of reconsidering the question of the liability of the Aetna Casualty & Surety Company, defendant insurer under the omnibus clause in its policy. A brief restatement of the facts is necessary. Leon G. Haeuser brought suit against Charles T. Kerner, the owner of a Cadillac automobile, the Aetna Casualty & Surety Company, his liability insurance carrier, Walter Hebert, his chauffeur, and Chas. W. Hanna, for damages due to physical injuries sustained by his minor son as the result of a collision between the Cadillac car of Kerner, in which plaintiff's son was a passenger, and a Ford Sedan owned and driven by Hanna, under circumstances alleged to involve all four defendants with responsibility. The trial court, by its judgment, released Kerner, the Aetna Casualty & Surety Company and Hanna and held Hebert alone responsible. In our original opinion we affirmed the judgment of the district court and upon application for rehearing reopened the case and limited its consideration to the question of the liability of the insurance carrier, the Aetna Casualty & Surety Company. The clause in the policy upon which the liability of the insurer is predicated is what is known as the " omnibus clause" and reads as follows: " IV. Definition of ‘ Insured.’ -The unqualified word ‘ insured’ wherever used, includes not only the named insured, but also any person while using the automobile and any person or organization legally responsible for the use thereof, provided that the declared and actual use of the automobile is ‘ pleasure and business', or ‘ commercial’, each as defined herein, and provided, further, that the actual use is with the permission of the named insured. ***" .

Under the facts of this case we found that Hebert, Kerner's chauffeur, at the time of the accident had departed from the scope of the permission granted by his employer in that he was instructed to return the car to the garage and the accident happened while he was conveying some friends to their home, having delayed compliance with his employer's orders. We adhere to that opinion, the facts not being reexamined by us on rehearing.

The question, therefore, is whether under the omnibus clause the insurer is liable for damages to a third person caused by the automobile of the named insured while operated by a person with the insured's permission, on an errand not contemplated by or included within the purpose for which permission was given to use the automobile. The argument on behalf of the insured is, as expressed by ingenuous counsel in their brief on rehearing, " there are two provisos making use of the phrase ‘ actual use’ . (1) That the declared and actual use of the automobile is ‘ pleasure and business' or ‘ commercial’, each as defined herein, and (2) ‘ that the actual use is with the permission of the named insured’ . In the first of these two provisos, a clear distinction is made between declared use (i.e. future use contemplated by the named insured in agreement with the insurance company at the time of making the contract). In the second proviso, the term ‘ actual use’ is employed in the same sense as before; namely, ‘ use in action or existence at the time, present, nonce or current use’ . (See definitions hereafter). In other words, the omnibus clause covers a third person while using the automobile, subject to two restrictions. First, that the ‘ declared and actual use of the automobile is " pleasure and business" or " commercial", each as defined herein’, and, second, ‘ that the actual use is with the permission of the named insured’ . Surely it could not be contended that the clause ‘ actual use’ has a different meaning in the two provisos. The distinction in both provisos is between use contemplated as a future contingency and use currently being made at any particular time. Thus, the use for which Mr. Kerner gave permission was a specific contemplated use, as distinguished from the quite different actual use which his chauffeur was making of the automobile when the accident occurred. It is impossible to give permission for actual use except in contemplation of its future actualization, for actual use is use in process of occurrence. The actual use of the automobile being made by the chauffeur at the time of the accident was not contemplated in the permission given by Mr. Kerner; therefore, the use then current (i.e. the actual use) was not within the terms of the agreement made in the policy contract, and the company cannot be liable for the results of such use."

Substantially the same argument was made in Parks v. Hall et al., 189 La. 849, 850, 181 So. 191, 194, where the facts so far as they effect the legal question under consideration are the same, though the word " actual" does not appear in the omnibus clause considered there. That suit was filed in the District Court for the Parish of Ouachita and resulted in a judgment holding the insurer liable. It was appealed to the Court of Appeal for the Second Circuit (179 So. 868) and that Court, with one of the judges dissenting, reversed the judgment of the district court and dismissed the insurer. A rehearing was granted without changing the result. The case was brought to the Supreme Court on a Writ of Review and that Court reversed the Court of Appeal and reinstated the judgment of the District Court, saying:

" Under the facts of this case, Hall was operating the car with the permission of the assured and the policy, by its express terms, i.e., the omnibus clause, was made to cover, as an assured, any one who was driving the car with the permission of the owner of the insured car. The provisions of the policy do not limit the liability thereunder to causes arising when the permitted driver was using the car either for the owner's business or under any restricted circumstances. The language is not restricted, but used in its broadest possible sense and under the rules of construction generally applicable in cases of this kind, we must give the language used the same broad construction. The words used in the clause would be practically meaningless and the object there made nugatory if it were necessary to determine in every case whether, at the time and under the circumstances of the accident, the driver was proceeding within the limitations of the permission of the assured to use the car. In order to give the clause ‘ provided: (a) it is being used with the permission of the named Assured,’ the construction placed by the Court of Appeal and contended for by the defendants, we would have to give it a restricted and limited meaning, contrary to the rules of construction of such contracts. We would have to resolve the doubt or uncertainty or ambiguity in favor of the writer of the insurance contract.

" We therefore conclude that the permission of the assured to Hall to use the car in the first instance, irrespective of the use to which he put the car while in his possession, was ‘ permission of the assured’ within the meaning and contemplation of the ‘ omnibus clause’ and the insurer is therefore liable to plaintiffs thereunder."

The omnibus clause in that case reads as follows:-" The term ‘ named assured’ shall mean only the assured specified in Statement One, but the term ‘ assured’ shall include the named assured and any other person while riding in or legally operating such automobile and any other person or organization legally responsible for its operation, provided: (8) it is being used with the permission of the named Assured, or, if he is an individual, with the permission of an adult member of his household other than a chauffeur or domestic servant ***" .

In Stovall v. New York Indemnity Company, 157 Tenn. 301, 8 S.W.2d 473, 477, 72 A.L.R. 1368, the Supreme Court of Tennessee held that a proviso in an omnibus clause " providing such use or operation is with the permission of the named assured" did not exclude from the protection of the policy a person using the automobile with the permission of the owner or assured " regardless of whether the automobile is driven to a place or for a purpose not within the contemplation of the insured when he parted with possession" .

We are referred to a work on Automobile Liability Insurance written by John A. Appleman " Head of the Legal Department State Farm Mutual Automobile Insurance Company, Bloomington, Illinois" . Mr. Appleman is not in sympathy with the ruling in Parks v. Hall, supra, and other cases which he described as the minority view, but in Tulane Law Review Volume XIII, Page 147, we read:

" Although there is a split of authority in the common law on the question whether the scope of the permission must be observed to the letter in order for the person permitted to be protected under the omnibus clause, the majority of the cases are in accord with the instant case (Parks v. Hall), holding that the assured's permission to use the car in the first instance will make the

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