Hardware Mutual Casualty Company v. Jones

• Decision Date: 21 April 1964
• Docket Number: No. 9032.,9032.
• Citation: 330 F.2d 1014
• Parties: HARDWARE MUTUAL CASUALTY COMPANY, Appellant, v. Bewayne JONES and Louis Jones, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

330 F.2d 1014 (1964)

HARDWARE MUTUAL CASUALTY COMPANY, Appellant, v. Bewayne JONES and Louis Jones, Appellees.

No. 9032.

United States Court of Appeals Fourth Circuit.

Argued October 1, 1963.

Decided April 21, 1964.

Preston P. Taylor, Norfolk, Va., and E. Ballard Baker, Richmond, Va. (Robert M. Furniss, Jr., Norfolk, Va., on brief), for appellant.

J. Randolph Davis, Norfolk, Va. (Wilson L. Rivers, and Davis, Boyd & Beaman, Norfolk, Va., on brief), for appellees.

Before HAYNSWORTH and BOREMAN, Circuit Judges, and R. DORSEY WATKINS, District Judge.

HAYNSWORTH, Circuit Judge.

Because the jury received less guidance from the Court than was needed to enable it to resolve the factual issues submitted to it, we conclude that a new trial is appropriate.

The question generally relates to the coverage of an automobile dealer's liability insurance policy on an automobile used by one of the dealer's employees, and the principal factual issue was whether or not the use was with the permission of the dealer. Some reference to the particular facts is required.

Automoville, Inc. and a partnership doing business as Phillips Bros. Automoville were the named insureds in an automobile garage liability policy issued by Hardware Mutual Casualty Company. The policy afforded coverage for legal liabilities arising out of the automobile and garage business operated by the insureds and out of the use of automobiles used principally in the automobile and garage business of the named insureds.

In August 1960 Phillips Bros. Automoville acquired in a trade a 1947 Pontiac, the title to which it transferred to Automoville, Inc. Elbert L. Heckstall was an employee in the garage of Automoville, Inc., and he wanted to buy the Pontiac. Tench H. Phillips, Jr., an official of the company, agreed to sell the Pontiac to Heckstall for a price somewhere between $50 and $100. The parties were uncertain as to the exact amount of the purchase price agreed upon. Heckstall, however, paid $20 on account of the purchase price at the time of the agreement in August 1960, and agreed to pay the remainder in weekly or monthly instalments. It was understood that the purchase price would be paid in full before the automobile was transferred to him and, meanwhile, it was not to be delivered to him.

Some three weeks later, however, Heckstall sought permission to take the Pontiac to his home for the purpose of working upon it after hours and during his days off. Phillips gave him permission to do that and lent him some dealer's tags for use on the automobile as he drove it from the garage to his home. Heckstall then returned the tags to Automoville, Inc.

Some nine months later, the agreed purchase price, whatever it was, had still not been paid in full and the automobile remained in Heckstall's possession. Both Heckstall and Phillips testified positively, however, that Heckstall was instructed by Phillips not to use or drive the automobile, except that, on one or two occasions during the 9-month period, Heckstall sought and obtained Phillips' permission to drive the automobile on a specified mission, and, on those occasions, Phillips allowed Heckstall to use a set of his dealer's license plates, which Heckstall returned on each occasion.

There was testimony from others, however, that they had seen Heckstall driving the Pontiac automobile on ten or fifteen occasions, each time with dealer's tags on the automobile. Heckstall denied that he had used the automobile except on those one or two occasions when he had the express permission of Phillips.

On June 17, 1961, Heckstall was not working. He had injured his leg sometime before and he wanted to go to a hospital for treatment of his leg. Later that afternoon he went to the used car lot of Automoville. Robert Womack and possibly other salesmen were there. Phillips was out of town. Womack was engaged with a prospective customer when Heckstall made known to him his desire for some dealer's tags, and Womack, without speaking, pointed to where they were. Heckstall took the tags to his home, put them on the Pontiac, and, with several passengers, started for the hospital. En route he was involved in an accident which resulted in injuries to Bewayne Jones.

Sometime later, Automoville sold the Pontiac to someone else and refunded to Heckstall the $20 he had paid toward its purchase price.

Thereafter, Hardware Mutual Casualty Company brought this action against Bewayne Jones and his father seeking a declaratory judgment as to its duties and liabilities arising out of its insurance of Phillips Bros. Automoville and Automoville, Inc.

The District Court submitted to the jury a single interrogatory:

"Was the 1947 Pontiac automobile in question, at the time of the accident and injury to Bewayne Jones, being used by Elbert L. Heckstall with the consent, express or implied, of Automoville, Inc.?"

The jury answered "Yes," and the District Court entered judgment for the defendants.

The Court's instructions to the jury in relevant part were as follows:

"Now in determining this one question in this particular case, you are to consider all of the evidence that you heard from the witness stand. You should take into consideration when and how this Pontiac automobile was acquired; under what circumstances it was acquired; whether there was any limitations upon its use and if so, what were those limitations and what was the purpose of giving the possession of the automobile to the young man in question and from all of the situations, from all of the overall transactions taking into consideration the time involved and how the automobile came back

...