Lumber Mens Mut. Cas. Co v. Indem. Ins. Co. Of North Am.

• Decision Date: 21 April 1947
• Citation: 186 Va. 204,42 S.E.2d 298
• Parties: LUMBER MENS MUT. CASUALTY CO. v. INDEMNITY INS. CO. OF NORTH AMERICA.
• Court: Virginia Supreme Court

186 Va. 204

42 S.E.2d 298

LUMBER MENS MUT. CASUALTY CO.

v.INDEMNITY INS. CO. OF NORTH AMERICA.

Supreme Court of Appeals of Virginia.

April 21, 1947.

Error to Circuit Court, Albemarle County; Lemuel F. Smith, Judge.

Action by Lumbermens Mutual Casualty Company against Indemnity Insurance Company of North America to recover on an automobile liability insurance policy. A demurrer to the notice of motion was sustained and a judgment entered dismissing the action and plaintiff brings error.

Judgment affirmed.

Before HOLT, C. J, and HUDGINS, GREGORY, EGGLESTON, SPRATLEY and BUCHANAN, JJ.

Perkins, Battle & Minor, of Charlottesville, for plaintiff in error.

Bowles, Anderson & Boyd, of Richmond, for defendant in error.

HUDGINS, Justice.

This is an action by the Lumbermens Mutual Casualty Company to recover from the Indemnity Insurance Company of North America the sum of $10,000, interest and costs, paid by it to W. R. Bingler for personal injuries sustained by him under the following circumstances:

On March 3, 1939, T. C. Ritchie, a partner of Ritchie Electric Company and, as such, owner of a Plymouth coach, ran out of gasoline near an automobile service station operated by Mrs. Florence R. Gable in Charlottesville Virginia. He gave his automobile keys to Willard E. Jameson, an employee of Mrs. Gable, for the purpose of having his car taken to the service station and the tank filled with gasoline. While driving the car into the service station, Jamesori negligently struck and seriously injured W. R. Bingler, who was on the premises. Bingler instituted an action against Mrs. Gable, Jameson and Ritchie. A judgment for $10,000 was rendered 'in the trial court against Mrs. Gable and Jameson, and the action against Ritchie was dismissed. On review, we affirmed this judgment in Gable v. Bingler, 177 Va. 641, 15 S.E.2d 33.

Mrs. Gable's liability as operator of a gasoline or oil supply station was covered by an insurance policy issued by the Lumbermens Mutual Casualty Company. This insurance company paid the judgment to Bingler, and required Mrs. Gable to assign her interest in the judgment against Jameson to it. Later, in Erie county, New York (where Jameson had moved), the company obtained a judgment against Jameson for $12,522, which included the principal, interest and costs of the original judgment obtained by Bingler.

Upon return of the execution on the New York judgment, marked unsatisfied, the Lumbermens Mutual Casualty Company instituted this action against the Indemnity Insurance Company of North America. The notice of motion alleged that, on the date W. R. Bingler received his injuries, the Plymouth car owned by T. C. Ritchie was covered by a policy of casualty insurance issued by defendant, which was then outstanding and in effect; that, at the time of the accident, the car was operated by Jameson with the permission of the owner; and that, because of this fact Jameson, under the provisions of the 1934 amendment to Code, sec 4326a, was included within the coverage of the policy. The trial court sustained a demurrer to the notice of motion and entered a judgment dismissing the action. From that judgment the Lumbermens Mutual Casualty Company obtained this writ of error.

The parties will be referred to as plaintiff or defendant according to the positions they occupied in the trial court.

The defendant relies upon the pertinent restrictive provisions of its policy, which are as follows:

"The unqualified word 'insured' * * * 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. The provisions of this paragraph do not apply:

* * * * * *

"(c) to any person or organization, or to any agent or employee thereof, operating an automobile repair shop, public garage, sales agency, service station, or public parking place, with respect to any accident arising out of the operation thereof;

Plaintiff's contention is that the restriction on the use of the car by any party within the group defined in "(c)" above is contrary to law and without legal effect because such restriction is contrary to the express mandate of the pertinent provisions of the 1934 amendment to Code, sec. 4326a reading: "No such policy shall be issued or delivered in this State, to the owner of a motor vehicle, by any corporation or other insurer authorized to do business in this State, unless there shall be contained within such policy a provision insuring such owner against liability for damages for death or injuries to person or property resulting from negligence in the operation of such motor vehicle, in the business of such owner or otherwise, by any person legally using or operating the same with the permission, express or implied, of such owner." (Italics supplied.)

Neither this nor any other statute in Virginia makes the owner of an automobile liable for the negligence of another simply because such negligent party was operating the car with his permission. This being true, the provision requiring insurance companies to indemnify the owner for the negligence of a party operating the car with his consent seems meaningless. The ambiguity of the language used compels the court, in order to ascertain the legislative intent, to invoke the ancient canons of interpretation--that is, to consider the old law, the mischief sought to be avoided and the remedy to be applied.

Prior to the adoption of the statute, the question of the liability of a car owner for its negligent operation by other members of the family with his permission was the subject of much litigation. Cohen v. Meador, 119 Va. 429, 89 S.E. 876; Blair v. Broadwater, 121 Va. 301, 93 S.E. 632, L. R.A.1918A, 1011; Crowell v. Duncan, 145 Va. 489, 134 S.E. 576, 50 A.L.R. 1425; Litz v. Harman, 151 Va. 333, 144 S.E. 477; Baptist v. Slate, 162 Va. 1, 173 S.E. 512. For other cases see Michie's Digest of Va. and W. Va. reports, Automobiles, p. 367 et seq.; annotations in 36 A.L.R. 1137, 68 A. L.R. 1008 and 100 A.L.R. 920.

Before 1934, many insurance companies, selling standard liability policies in Virginia extended their coverage by what was generally known as the omnibus clause to any person while legally operating a motor vehicle with the permission of the named insured. See Cartos v. Hartford Accident & Indemnity Co., 160 Va. 505, 169 S.E. 594; Royal Indemnity Co. v. Hook, 155 Va. 956, 157 S.E. 414; Maryland Cas. Co. v. Hoge, 153 Va. 204, 149 S.E. 448.

Under the provisions of these policies, the liability of the owner was not the decisive question. If the car was driven by another, the liability of the owner was dependent upon the circumstances, such as whether the relation of master and servant or principal and agent existed between the owner and the negligent party.

While the statute has been in effect for more than twelve years, the specific question here involved has never been determined by this court. This provision of the statute was taken verbatim from a simi-lar statute of the State of New York (see sec. 109 of Insurance Law, Consol.Laws N.Y, ch. 28). When the legislature of one State adopts a statute of another State, such legislature is presumed to have adopted the construction placed upon it by the courts of that State.

The provisions of section 109 of the Insurance Law and section 59 of the Vehicle and Traffic Laws of New York, Consol. Laws, c. 71, when considered together, seem clear and comprehensive. The latter section provides that every owner of a motor vehicle operated upon the highways of New York shall be liable for death or injuries to person or property resulting from negligence in the operation of such motor vehicle in the business of such owner or otherwise by any person legally using or operating the same with the owner's permission, express or implied.

While the New York statute does not compel an owner of a motor vehicle to purchase liability insurance, it renders him personally liable for the negligence of another who, with his permission, operates his motor vehicle on the highway. However, section 109 compels insurance companies, when they sell liability insurance to the owner of a motor vehicle, to include in the coverage insurance for such owner against liability for damages or injuries to others resulting from the negligent operation of the motor vehicle by another with his permission. The provisions of section 109 and section 59 should be borne in mind in order to grasp the full significance of the New York decisions construing either or both.

The action in Brustein v. New Amsterdam Cas. Co, 255 N.Y. 137, 174 N.E. 304, 305, was to recover from an insurance company damages for the loss of services of plaintiff's wife, who was injured by the negligence of a party operating a motor vehicle with the consent of the owner. In a separate action against the insurance company the wife recovered damages for the bodily injuries sustained by her. It was held that the words "bodily injuries or death, " as used in the policy, did not include the husband's loss of services of his wife. It was declared that the provision of the New York statute, now incorporated in Code, sec. 4326a, was an " 'additional interest' clause aimed to protect the public against the operation of a car by others than the owner, provided they have the owner's consent, express or implied. The primary purpose of this requirement is to meet the defense in an action on the policy that the owner was not at the time of the accident operating the car personally or by his agent, although it was being operated by a member of his family or another with his consent express or implied. * * * the owner of an automobile may elect whether to carry any insurance, and if he elects to insure he may determine the...