Hinchey v. National Sur. Co.

• Decision Date: 25 February 1955
• Citation: 111 A.2d 827,99 N.H. 373
• Parties: Robert E. HINCHEY, Adm'r et al. v. NATIONAL SURETY COMPANY et al.
• Court: New Hampshire Supreme Court

Page 827

111 A.2d 827

99 N.H. 373

Robert E. HINCHEY, Adm'r et al. v. NATIONAL SURETY COMPANY et al.

Supreme Court of New Hampshire.

Argued Jan. 5, 1955.

Decided Feb. 25, 1955.

Burns, Calderwood & Bryant, Dover, Donald R. Bryant, Dover, orally, for plaintiffs.

Devine & Millimet, Manchester, Joseph A. Millimet, Manchester, orally, for defendant Company.

GOODNOW, Justice.

The policy of insurance involved in this case was issued to O. E. Sellers, the owner of the vehicle and the person in whose name it was registered, at his residence in Johnstown, Pennsylvania. The application for the policy, signed by the agent in Johnstown through whom it was procured, recited that the driver of the car other than the named insured was to be his son, Donald, and stated that the vehicle was 'to be used at Johnstown'. The policy applied to accidents occurring outside the state of Pennsylvania as well as in that state. Even if it were findable, as contended by the plaintiffs, that the agent 'probably knew' that the car was to be used primarily by Donald in the state of New York, the fact remains that the policy was issued in Pennsylvania and 'even performance there at least in some measure was contemplated by it.' Maryland Casualty Co. v. Martin, 88 N.H. 346, 348, 189 A. 162, 164. The liabilities of the company arising out of the contract are to be governed by the law of Pennsylvania, where the policy was issued. Boisvert v. Boisvert, 94 N.H. 357, 358, 53 A.2d 515; 12 Appleman, Insurance Law and Practice, § 7079.

One of the company's obligations under the terms of the policy was to furnish coverage with respect to bodily injury liability to the named insured and also to 'any person while using the automobile and any person * * * legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission'. The company's obligation was thus limited to those cases in which 'the actual use of the automobile is by the named insured or with his permission'. While the acts on the part of Donald Sellers, which it is claimed brought O'Rourke within the coverage of the policy, occurred in the state of New York, the law of that state is not applicable in determining the rights and obligations of the company under this provision. Its substantive rights under a policy issued in Pennsylvania cannot be affected by the laws of New York in the absence of an agreement that they should be. Boisvert v. Boisvert, supra, 94 N.H. 359, 53 A.2d 517.

The principal issue in this action is whether 'the actual use of the automobile' at the time of the accident was 'with [the insured's] permission' within the interpretation put upon that language by the laws of Pennsylvania. The automobile had been turned over by the insured to his son 'for Donald to * * * use for all purposes as though it were his own'. Under this broad authority, Donald had the right to allow others to drive it and anyone driving with Donald's permission was also driving with the permission of his father, the named insured. Odden v. Union Indemnity Co., 156 Wash. 10, 286 P. 59, 72 A.L.R. 1363. The issue is therefore to be determined on the basis of whether the actual use was with Donald's permission.

The Trial Court found that when Petell asked for the use of the car on September 6, 1951 in order to go to the fair at Syracuse, he was informed by Donald that 'he would not lend him the car if O'Rourke was going with him'; that when Venturini later brought a note to Donald from Petell in which the loan of the car was requested, Donald again refused when told by Venturini that O'Rourke was going; and that it was only when he was thereafter informed by Venturini that O'Rourke was not going but that another man named Tempo would go in O'Rourke's place that Donald gave the keys to Venturini to give to Petell 'thereby giving permission to Petell to take the car accompanied by Venturini and Tempo'. After receiving this permission, Petell, Venturini and O'Rourke left the base in Donald's car, Donald being unaware that O'Rourke instead of Tempo was one of the passengers. These findings of fact are unquestionably warranted by the evidence.

It is the law of Pennsylvania that while slight and inconsequential deviations from the permitted use will not annul the coverage provided by an omnibus clause similar to or like the one involved here, there is and absence of 'permission' within the meaning of the policy if the car is being used 'at a time or place or for a purpose not authorized by the insured.' Laroche v. Farm Bureau Mutual Automobile Insurance Co., 335 Pa. 478, 482, 7 A.2d 361, 362; Freshkorn v. Marietta, 345 Pa. 416, 29 A.2d 15. Coverage is not afforded simply on the basis that permission was granted to take and use the car in the first instance. Its use at the time of the casualty must be one which was contemplated when permission was granted. When consent is required not merely for the 'use' but for the 'actual use', as in this case, coverage is dependent upon the existence of permission for the 'particular use' at the time of the accident. The permission must 'cover the specific purpose for which the car is being driven.' Laroche v. Farm Bureau Mutual Automobile Insurance Co., supra.

When the accident occurred, the car was being driven at a time and place which Sellers had authorized. In granting permission to Petell to take the car, however, Sellers had not only limited the passengers to Venturini and Tempo but had specifically excluded O'Rourke. The use for which permission was granted to Petell was not simply taking the car to the fair, but the transportation of himself, Venturini, and Tempo to the fair provided O'Rourke was not also transported. It was not contemplated by Sellers that O'Rourke would be a passenger, much less that he would be the driver. The particular use to which the car was being put, insofar as it was being driven by O'Rourke and used for his transportation, was neither actually nor impliedly within the limits of the permission granted by Sellers to Petell. Unlike the situation in Arcara v. Moresse, 258 N.Y. 211, 179 N.E. 389, where the thing forbidden related to the operation of the vehicle, the limitation upon the permission given in this case was that the car should not be used at all if O'Rourke was a passenger. Similarly in Glens Falls Indemnity Co. v. Zurn, 7 Cir., 87 F.2d 988, also relied on by the plaintiffs, the insured consented to the use of the car for the transportation of his son and his friends and the question of permission was concerned with the operation of it by one of the son's friends.

The plaintiffs contend, however, that even if the use of the car fell without the limits of the permission given to Petell, the operation of the car by O'Rourke at the time of the accident had been impliedly permitted by Sellers. It cannot be doubted that permission 'may result by implication from * * * a course of conduct in which the parties have mutually acquiesced.' Conrad v. Duffin, 158 Pa.Super. 305, 309, 44 A.2d 770, 772; Brower v. Employers' Liability Assurance Co., 318 Pa. 440, 177 A. 826. The plaintiffs argue that such a permission existed in this case because O'Rourke had implied permission to go in the car as a passenger whenever it was loaned to others; and because 'Donald approved the custom of swapping drivers' whenever the car was loaned and thereby impliedly consented to the operation of the car...