Hardware Mut. Cas. Co. v. Crafton

• Decision Date: 16 October 1961
• Docket Number: No. 5-2459,5-2459
• Citation: 350 S.W.2d 506,233 Ark. 1020
• Parties: HARDWARE MUTUAL CASUALTY COMPANY, Appellant, v. J. E. CRAFTON et al., Appellees.
• Court: Arkansas Supreme Court

Page 506

350 S.W.2d 506

233 Ark. 1020

HARDWARE MUTUAL CASUALTY COMPANY, Appellant, v. J. E. CRAFTON et al., Appellees.

No. 5-2459.

Supreme Court of Arkansas.

Oct. 16, 1961.

Rehearing Denied Nov. 20, 1961.

Barber, Henry, Thurman & McCaskill, Little Rock, for appellant.

Spitzberg, Bonner, Mitchell & Hays, Little Rock, for appellee Riverside Ins. Co.

Guy H. Jones, Little Rock, and Francis T. Donovan, Conway, for appellee J. E. Crafton.

BOHLINGER, Justice.

On July 14, 1957 a man by the name of Anderson driving a car which was insured under a family automobile policy issued by the Riverside Insurance Company of America [which company will hereafter be referred to as Riverside] drove to some fishing facilities operated by appellee, J. E. Crafton. Crafton's operation in the maintenance of a fishing dock and renting boats was covered by what is termed as an 'Owners, Landlords and Tenants Liability Policy' issued by Hardware Mutual Casualty Company, appellant herein which will be referred to as Hardware Mutual.

Upon arriving at the boat dock, Anderson had parked his automobile in the driveway and had unloaded his fishing paraphernalia. From this point in the driveway, appellee got in the car and drove it to a parking area on the fishing premises and at that point Crafton alighted from the automobile and walked approximately thirty or forty feet. After Crafton had left the automobile, for reasons unknown, the automobile rolled into the lake. The car was salvaged at a cost to Anderson of $651.83.

Anderson appears to have recovered this damage from his insurance carrier, Riverside, and thereafter Riverside and Anderson filed suit in the Pulaski Circuit Court against J. E. Crafton, the appellee herein. Appellee's insurance carrier, Hardware Mutual, was notified of the pendency of this action but appears to have taken no action in the case nor was it a party. The action in the Pulaski Circuit Court resulted in a judgment in favor of Anderson and Riverside against Crafton for the sum of $975.33 representing the original debt, costs and attorney's fees. Following the rendering of the Pulaski Circuit Court judgment against him, Crafton filed in the Faulkner Circuit Court this action against Hardware Mutual alleging that Hardware Mutual was obligated to pay the judgment against him obtained by Riverside and Anderson because of the Owners, Landlords and Tenants Policy issued to him by Hardware Mutual. Hardware Mutual then filed its answer denying liability and its third party action against Riverside asserting that Crafton was an omnibus insured under the policy issued by Riverside and that it was the duty of Riverside to defend and pay any judgment awarded against Crafton in the action.

The above stipulated facts and the record in the case were submitted to the judge of the Faulkner Circuit Court who filed his conclusions of law with the clerk. The conclusions of law represent much research and thought on the part of the judge and have been most helpful to us. We have further had the help of an able brief by the attorneys for the appellant and we leave the field of their logic and conclusions with reluctance.

The main issue in this case turns upon the construction to be given to a phrase contained in the 'exclusions' embodied in the policy issued by Hardware Mutual to the appellee. While the policy provided for the payment by Hardware Mutual of sums which the insured should become legally obligated to pay as damages because of '* * * injury to or destruction of property caused by accident and arising out of accidents hereinafter defined,' exclusion paragraph 'K' in the policy specifically provides that the policy does not apply to 'property in the care, custody or control of the insured or property as to which the insured, for any purpose is exercising physical control.' It is the contention of the appellant that the exclusion paragraph cited above precludes the appellee from recovering as the vehicle that was damaged was in the 'care, custody or control' of the insured appellee, or was property as to which Crafton was exercising physical control.

The care, custody and control clause in liability policies, so far as our research has extended, appears to be almost universally used but its construction is, to a large extent, dependent upon circumstances of each case and we conclude that the phrase should be applied with common sense and practicality. In a general way the word 'care' has reference to temporary charge; 'custody' implies a keeping or guarding and a necessity for an accounting, and 'control' refers to power or authority to manage, superintend, direct or oversee. The use of these terms has, from time to time, created some degree of confusion by reason of some factual dissimilarity. This has generally led to the inclusion of the words 'property to which the insured for any purpose is exercising physical control.' [Emphasis ours.] Whether or not this addition clarifies or is merely tautological, we do not say, but certainly the addition of 'for any purpose is' makes it clear that the application of the words in the exemption apply to the property at the time of the accident.

We have examined with great care the authorities cited by the parties hereto, as well as many others, and the law as outlined in them has been carefully considered by us in reaching the conclusion which is ours. Cohen & Powell, Inc. v. Great American Ins. Co., 1940, 127 Conn. 257, 16 A.2d 354, 131 A.L.R. 1102; P & M Stone Co. v. Hartford Acc. & Ind. Co., 1959, 251 Iowa 243, 100 N.W.2d 28; Monroe County Motor Co. v. Tennessee Odin Ins. Co., 1950, 33 Tenn.App....