Krebsbach v. Miller

• Decision Date: 20 December 1963
• Citation: 22 Wis.2d 171,125 N.W.2d 408,4 A.L.R.3d 1
• Parties: , 4 A.L.R.3d 1 Viola KREBSBACH et al., Plaintiffs-Respondents, v. Alfred Joseph MILLER, Defendant-Respondent, Integrity Mutual Ins. Co., a Wis. corporation, Appellant.
• Court: Wisconsin Supreme Court

Page 408

125 N.W.2d 408

22 Wis.2d 171, 4 A.L.R.3d 1

Viola KREBSBACH et al., Plaintiffs-Respondents, v. Alfred Joseph MILLER, Defendant-Respondent, Integrity Mutual Ins. Co., a Wis. corporation, Appellant.

Supreme Court of Wisconsin.

Dec. 20, 1963.

Gibbs, Roper & Fifield, Milwaukee, for appellant.

Morton Wax and Phillip M. Wax, Milwaukee, Ray T. McCann and Leonard L. Loeb, Milwaukee, of counsel, for plaintiffs-respondents.

CURRIE, Justice.

The sole issue on this appeal is whether at the time of the accident the car was being operated with the permission of the named insured within the meaning of the omnibus coverage clause of the policy.

Integrity Mutual concedes that the record on the motion for summary judgment discloses that a disputed issue of fact exists with respect to whether the named insured, George A. Malliet, placed any restriction upon his son's use of the Ford automobile which he was permitted to take to Milwaukee. It contends, however, that, even if the named insured had turned the automobile over to his son without voicing any express prohibition against letting someone else use it, the use of the car by Alfred Miller was without the permission of the named insured, and thus there was no coverage with respect to plaintiffs' injuries. Therefore, for the purposes of this opinion we will assume that the named insured turned the car over to his son without imposing any express restriction as to its use.

A careful research of the authorities in the country generally bearing on the instant issue has caused us to approve the following statement appearing in 7 Am.Jur. (2d), Automobile Insurance, p. 431, § 116:

'It has frequently been stated that, as a general rule, the permission given by the named insured to another to use the named insured's car does not authorize the permittee to allow a third party to use the car, and that if the permittee does allow a second permittee to use the car, such use is not 'with the permission of the named insured' as those words are used in the omnibus clause. However, the effect of this strict rule has been greatly diluted by reason of the fact that many of the courts recognizing the rule have substantially modified it by stating that in every case where the first permittee permits another to use the insured automobile, a factual determination must be made whether the initial grant of permission was broad enough to include an implied grant to the permittee of authority to give another use of the automobile and thus render the latter an additional insured under the omnibus clause.' (Italics supplied.) ¹

The statement by this court, 'In the absence of express permission, the scope of the permission must be determined by the circumstances,' in the recent case of Harper v. Hartford Accident & Indemnity Co. (1961), 14 Wis.2d 500, 509, 111 N.W.2d 480, 486, is in accord with the italicized portion of the above quotation from 7 Am.Jur. (2d), supra. Before examining the situations in which the named insured will be deemed to have given implied permission to a third person to operate the insured vehicle, we must ever keep in mind that this court is committed to a broad, rather than narrow, construction of the word 'permission' as it appears in the policy omnibus coverage clause required by sec. 204.30(3), Stats. Pavelski v. Roginski (1957), 1 Wis.2d 345, 84 N.W.2d 84.

One of the situations in which the named insured is held to have given implied permission to a third person to drive is when the first permittee, to whom the car was entrusted by the named insured without any express prohibition against letting another drive, retains possession of the car but turns over its operation to another while such first permittee remains an occupant of the car. ² Standard Accident Insurance Co. v. New Amsterdam Casualty Co. (7th Cir. 1957), 249 F.2d 847; Butterfield v. Western Casualty & Surety Co. (1960), 83 Idaho 79, 357 P2d 944; Fireman's Fund Indem. Co. v. Freeport Insurance Co. (1961), 30 Ill.App.2d 69, 173 N.E.2d 543; Costanzo v. Pennsylvania Threshermen, etc., Ins. Co. (1959), 30 N.J. 262, 152 A.2d 589. Maurer v. Fesing (1940), 233 Wis. 565, 290 N.W. 191, held that in such situation the named insured has consented to such use because the initial permission to use the car was not restricted to actual operation by the first permittee. See, also, Schimke v. Mutual Automobile Insurance Co. (1954), 266 Wis. 517, 64 N.W.2d 195, although the result in that case expressly was not grounded on the omnibus coverage statute (sec. 204.30). Even where the first permittee is not a passenger, an inference of permission may arise where the third person is engaged on some errand or activity for the benefit, advantage, or purposes of the first permittee. Harrison v. Carroll (4th Cir. 1943), 139 F.2d 427, and Aetna Life Ins. Co. v. Chandler (1937), 89 N.H. 95, 193 A. 233.

Another fact situation which may support a finding of implied permission is where the named insured has knowledge that the first permittee is loaning the use of the insured vehicle to others and nevertheless remains silent. Shoup v. Clemans (Ohio App.1939), 31 N.E.2d 103, and Odden v. Union Indemnity Co. (1930), 156 Wash. 10, 286 P. 59, 72 A.L.R. 1363.

Also, where for all practical purposes the first permittee is the real owner of the car but title has been taken in the name of the named insured for reasons of convenience, the general control and custody of the first permittee is such that, when he grants permission to a third person to operate the insured vehicle, such operation is held to be with the implied permission of the named insured. Indiana Lumbermens Mutual Insurance Co. v. Janes (5th Cir. 1956), 230 F.2d 500; and Hinchey v. National Surety Co. (1955), 99 N.H. 373, 111 A.2d 827. Cf. Schimke v. Mutual Automobile Ins. Co., supra.

In the instant case the named insured turned possession of the insured car over to his son to take it 130 miles distant and there use it for a period extending over several months. The majority of this court conclude that under such circumstances, absent an express prohibition against permitting others to drive the car, such circumstances will require a finding that the named insured gave defendant Alfred Miller implied permission to operate the car at the time and place of the instant accident. The only reasonable inference to be drawn from such circumstances is that the son was to exercise the same control over the use made of the car that an owner would. The New Jersey court recently declared in Baesler v. Globe Indemnity Co. (1960), 33 N.J. 148, 152, 162 A.2d 854, 857:

'Thus, it is almost universally held in the modern cases that where the named insured grants his permittee broad and unfettered dominion over his insured automobile, he also impliedly authorizes his permittee to allow a third person to use it, and thus to render him an additional insured. [Citing cases.] The first permittee, by being granted complete dominion over the insured automobile, is put in the shoes of the named insured, and therefore his permittee is held to be the named insured's permittee.'

We also deem apposite the statement made by the Fifth Circuit Court of Appeals in Indiana Lumbermens Mutual Insurance Co. v. Janes, supra (230 F.2d at p. 503):

'Of course, in this automobile age, a common thing for an automobile owner is to loan the car to friends, business associates, acquaintances, and others for personal use of the permittee wholly unrelated to the business or interest of the vehicle owner.'

Two cases which strongly support the conclusion reached, that the permission granted by the senior Malliet to the son Darrel included the right of Darrel to loan the temporary use of the car to defendant Miller, are Utica Mutual Insurance Company v. Rollason (4th Cir., 1957), 246 F.2d 105, and Standard Accident Ins. Co. v. Allstate Ins. Co. (1962), 72 N.J.Super. 402, 178 A.2d 358.

In the Utica Case the named insured was a motor service company which had turned over use of the insured car to Davis, its service manager. One evening Davis allowed his two sons to use the car to visit some friends and have an evening on the town. During the course of the evening the sons met some friends who attended a college 30 miles away. At the end of the evening the sons drove their friends back to the college, during which an accident occurred. At the time one of the sons was driving. The jury returned a verdict finding that Davis was given the car for his general use and that he had implied permission from the named insured to allow his sons to use the car. Upon this verdict judgment was rendered in the district court against the insurer, and the court of appeals affirmed. Judge SOBELOFF in his opinion for the court stated (246 F.2d 110):

'If an insured automobile is left by the owner with someone for general use and he in turn permits its use by another, the use is deemed to be with the permission of the owner.'

The facts in the Standard Accident Case closely parallel those of the instant case. There a father, who had purchased a new car, turned the keys of an older car over to his nineteen year old son to use, the son having just returned from service in the marines. The son used the car approximately five months in going to and from work and for social purposes. He also bought the gas and oil and made necessary minor repairs. The son loaned the car one weekend to a friend, Baker, for his own personal use. The accident occurred while Baker was operating the car. The court held that the omnibus coverage clause of the policy applied and stated (178 A.2d p. 361):

'Our review of the proofs leads us to conclude that the younger Aslaksen was given so broad an initial grant of authority over the Pontiac upon his return from Parris Island, which grant continued undisturbed for five months, that he had an implied grant of authority to let Baker use the automobile on the weekend of the accident. The son used the car as...