McKee v. Exchange Ins. Ass'n

Decision Date19 May 1960
Docket Number6 Div. 387
Citation120 So.2d 690,270 Ala. 518
PartiesGenyth C. McKEE et al. v. EXCHANGE INSURANCE ASSOCIATION et al.
CourtAlabama Supreme Court

Hogan, Callaway & Vance, Birmingham, for appellants.

Bowers, Dixon, Dunn & McDowell, Birmingham, for appellee Clark.

Herbert W. Peterson, T. M. Conway, Jr., Rives, Peterson, Pettus & Conway, Birmingham, for appellee Employers Fire Ins. Co.

SIMPSON, Justice.

This appeal seeks to review a declaratory judgment decree rendered by the Circuit Court of Jefferson County, in Equity, wherein it was ruled that there was no liability on an insurance policy claimed to have been issued to Walter P. Clark, who had been a salesman for Edmunds Motor Company.

Clark had been a salesman for Edmunds Motor Company in Birmingham and had purchased an automobile from said Motor Company under its demonstrator plan. He took out liability insurance with appellee, Employers Fire Insurance Company, under a master policy it had issued to the Motor Company and a certificate of participation was issued to Clark. In January or February, 1956, while the policy was in force, Clark had a wreck and his automobile was destroyed. He did not own a car thereafter, but used various other people's automobiles, including his mother's. On May 15, 1956, Clark had borrowed his mother's car and was using it for both business and pleasure and on that day collided with Mrs. McKee, appellant, and seriously injured her. The McKees filed actions against him on the law side of the Tenth Judicial Circuit Court. On trial of these cases, judgments were rendered for the McKees in the amount of $14,000.

After the suits were filed on the law side, Exchange Insurance Company and Employers filed a bill in equity for declaratory judgment to construe the liability, vel non, of the insurance companies to the McKees. As stated, only the liability of Employers is here under consideration. It is contended by appellants that liability insurance coverage resulted from two separate provisions of the policy issued to Clark by Employers Insurance Company.

The policy was of standard type. The first coverage provided that the company agreed:

'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury * * * sustained by any person, caused by accident and arising out of the * * * use of the automobile.' [Emphasis added.]

The so-called Temporary Substitute clause appears under Insuring Agreement IV(a) which provided that under this coverage the word 'automobile' meant not only the described automobile but also included:

'* * * an automobile not owned by the named insured or his spouse if a resident of the same household, while temporarily used as a substitute for the described automobile when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction; * * *'

The 'Use of Other Automobiles' clause of Employers' policy (Insuring Agreement V) provides as follows:

'If the named insured is an individual * * * and if during the policy period such named insured * * * owns a private passenger automobile covered by this policy, such insurance as is afforded by this policy under coverages A, B, C-1 and E, with respect to said automobile applies with respect to any other automobile, subject to the following provisions: * * *'

Among the sub-paragraphs appearing under such Insuring Agreement is the following:

'This insuring agreement does not apply:

'(1) to any automobile owned by or furnished for regular use to either the named insured or a member of the same household * * *.'

The question of whether Clark was 'a member of the same household' as his mother, whose car he was using at the time of the accident, was submitted to the jury. The jury found that he was.

The court declared in its decree that the status of Clark was not covered by either of the provisions set forth above.

It is almost trite to re-enunciate the long established principle, that insurance contracts must be construed most strongly against the insurer. 12 Ala.Digest, Insurance, k146(3).

The policy of insurance issued to Clark in this case affords coverage to the 'described automobile.' It in addition, however, provides additional coverage in the so-called 'temporary substitute' clause set forth above. This provision occupies a position of prominence equal to that of the paragraph affording coverage to the described automobile. It is entirely separate from the 'use of other automobiles' provision to which the household exclusion applies.

The general meaning of the 'temporary substitute' clause was stated in Iowa Mutual Insurance Company v. Addy, 132 Colo. 202, 206, 286 P.2d 622, 624, as follows:

'This provision of the policy makes it clear that a temporary substitute automobile is one used by the assured temporarily when the automobile which is insured under the policy is withdrawn from its customary use because of its breakdown, repair, servicing, loss or destruction.'

In the instant case the insured's (described) automobile had been wrecked and destroyed. Our problem is to determine whether the status of Clark at the time of the accident falls within the foregoing 'temporary substitute' provision of the policy. The first requirement is that the automobile must be 'not owned by the named insured or his spouse if a resident of the same household'. The car here was owned by the insured's mother. This test is then met.

Was the car being 'temporarily used' by the insured. The record indicates that after the destruction of the described automobile and before the accident, the insured used various cars owned by his employer and had used his mothe...

To continue reading

Request your trial
13 cases
  • Centraal Stikstof Verkoopkanter, NV v. Walsh Steve. Co.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • August 15, 1967
    ...law it is well settled that insurance policies are to be construed in a manner most favorable to the insured, McKee v. Exchange Ins. Ass'n, 270 Ala. 518, 120 So.2d 690 (1960) and that when a policy is susceptible of two or more constructions, the one most favorable to the Insured should be ......
  • State Farm Mut. Auto. Ins. Co. v. De La Cruz
    • United States
    • Alabama Supreme Court
    • October 3, 1968
    ...273 Ala. 648, 143 So.2d 846; Commercial Standard Ins. Co. v. New Amsterdam Cas. Co., 272 Ala. 357, 131 So.2d 182; McKee v. Exchange Ins. Ass'n, 270 Ala. 518, 120 So.2d 690. However, this court has also stated, many times, that unambiguous insurance policies must be expounded as made, and th......
  • Nelson v. St. Paul Mercury Ins. Co.
    • United States
    • South Dakota Supreme Court
    • October 26, 1967
    ...from normal use.' See also Continental Cas. Co. v. Ocean Accident & Guar. Corp., Del., 209 A.2d 743 and McKee v. Exchange Insurance Association, 270 Ala. 518, 120 So.2d 690, in which the Munson case is factually distinguished and not followed. To avoid any possible conflict and future misun......
  • Colonial Life & Acc. Ins. Co. v. Collins
    • United States
    • Alabama Supreme Court
    • January 26, 1967
    ...against the insurer. See: Trinity Universal Insurance Co., Dallas, Tex. v. Wills, 273 Ala. 648, 143 So.2d 846; McKee v. Exchange Insurance Association, 270 Ala. 518, 120 So.2d 690; Colonial Life & Accident Ins. Co. v. Shotts, 267 Ala. 525, 103 So.2d 181; New York Life Ins. Co. v. Torrance, ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT