Maryland Cas. Co. v. Turner

• Decision Date: 12 November 1962
• Docket Number: No. 5-2811,5-2811
• Citation: 235 Ark. 718,361 S.W.2d 646
• Parties: MARYLAND CASUALTY CO., Appellant, v. Yancy B. TURNER, Appellee.
• Court: Arkansas Supreme Court

Page 646

361 S.W.2d 646

235 Ark. 718

MARYLAND CASUALTY CO., Appellant, v. Yancy B. TURNER, Appellee.

No. 5-2811.

Supreme Court of Arkansas.

Nov. 12, 1962.

S. Hubert Mayes and S. Hubert Mayes, Jr., Little Rock, for appellant.

Griffin Smith, Little Rock, for appellee.

BOHLINGER, Justice.

The appellee, Yancy B. Turner, was the holder of a contract from United States Corps of Engineers for certain revetment work on the Arkansas River at a place known as Brown's Bend.

In order to comply with his contract, the appellee entered into a contract with the Mississippi Valley Engineering and Construction Company to furnish the rock requirements for the job, delivered in place on the job site. It appears that the Mississippi Valley Engineering and Construction Company produced the stone at a quarry near Sweet Home and, having no trucks, the Company entered into a contract, or hired trucks, to accomplish that part of its contract with the appellee whereby it was to deliver the rock to the appellee's barges or on the banks at the site of the work.

One of the trucks, the one involved in this case, was owned by a man named Koch and driven by a man named Freeman. It does not appear that the appellee was a party to the contract between the Mississippi Valley Engineering and Construction Company and its haulers and therefore we treat the hauling merely as a part of the work to be performed and the activity of Mississippi Valley.

The activities of the appellee were covered by a general liability policy issued by the Maryland Casualty Company, the appellant here. On August 8, 1960, the truck owned by Koch and driven by Freeman was being lowered over the slope of the river bank to enable the dropping of its load of rock at a point designated by the appellee. While the truck was thus being lowered over the bank and while an employee of the appellee was assisting in scraping the rock out of the truck, the bulldozer owned by the appellee, to which the truck in question was connected by means of a cable slipped back over the river bank and the truck fell into the river and was damaged thereby.

Koch brought suit against the appellee in the Pulaski Circuit Court to recover damages to his truck. The appellee called upon his insurance carrier, appellant here, to defend him under the terms of the general comprehensive liability policy which he alleged was in force at the time of the accident. Appellant refused to defend on the grounds of a policy exemption which exempted from coverage damage to 'tools or equipment while being used by the insured in performing his operations.' The appellee then filed the present suit for a declaratory judgment in the Pulaski Circuit Court and that court found in favor of the appellee and held that the Maryland Casualty Company was obligated to defend Turner in this case but denied Turner's request for penalty and attorney's fee. From that judgment the appellant prosecutes this appeal. Appellee cross-appeals from the trial court's denial of attorney's fees.

This brings squarely before us the question as to whether or not the truck which was damaged was being used by the appellee in his operation at the time of the accident. The exemption relied on is that the policy does not apply to damage to 'tools or equipment being used by the insured in performing his operations.' The word 'used' is, to some extent, employed by insurance companies as a substitute for the phrase 'care, custody, and control,' in exemption clauses in liability policies. In the case of Hardware Mutual Casualty Company v. Crafton, Ark., 350 S.W.2d 506, we said:

'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.'

Therefore, approaching the construction of the phrase with common sense and practicality, we make use of the following quotation from Great American Indemnity Co. of N. Y. v. Saltzman, 8 Cir., 213 F.2d 743, which was a federal case applying Arkansas law and which case is cited in the Crafton case, supra:

"Of course if the term 'use' is construed to embrace all its possible meanings and remifications, practically every activity of mankind would amount to a 'use' of something. However, the term must be considered with regard to the setting in which it is employed."

So in order to arrive at the setting in which the term is used, we revert to the contract between the appellee and the Mississippi Valley Engineering and Construction Company which contains these two applicable provisions:

'(1) Miss. Valley Engineering & Construction Co. agrees to furnish all labor, equipment, materials, supplies and other necessary items to produce and furnish approximately 42,500 tons of quarry-run stone with fines. Said quarry-run stone to be delivered to Yancy B. Turner's barges by trucks or dumped on the bank from...