Royal Indem. Co. v. Metropolitan Cas. Ins. Co. of New York

• Decision Date: 06 May 1964
• Docket Number: No. 10069,10069
• Citation: 80 S.D. 541,128 N.W.2d 111
• Parties: ROYAL INDEMNITY COMPANY, a Corporation, Plaintiff and Appellant, v. METROPOLITAN CASUALTY INSURANCE COMPANY OF NEW YORK, a Corporation, Continental Casualty Company, a Corporation, Avis Rent a Car System, a Corporation, and Viola M. Miller, Defendants and Respondents.
• Court: South Dakota Supreme Court

Page 111

128 N.W.2d 111

80 S.D. 541

ROYAL INDEMNITY COMPANY, a Corporation, Plaintiff and Appellant, v. METROPOLITAN CASUALTY INSURANCE COMPANY OF NEW YORK, a

Corporation, Continental Casualty Company, a

Corporation, Avis Rent a Car System, a

Corporation, and Viola M.

Miller, Defendants

and

Respondents.

No. 10069.

Supreme Court of South Dakota.

May 6, 1964.

Davenport, Evans, Hurwitz & Smith, Sioux Falls, for plaintiff and appellant.

Woods, Fuller, Shultz & Smith, Sioux Falls, Hanley, Costello & Porter, Rapid City, Agor, Bantz, Siegel & Barnett, Aberdeen, for defendants and respondents.

RENTTO, Judge.

This litigation seeks a declaration as to which of three insurance companies shall bear the burden of a loss suffered by the defendant Viola M. Miller.

Kathleen Sloy of Seattle, Washington, was employed by Rival Manufacturing Company of Kansas City, Missouri, to demonstrate a steam iron which it was arranging to place in Singer Sewing Machine Company shops and stores on an exclusive basis. For a time after her employment she called on Singer stores and shops in New England doing her traveling by public conveyance. Shortly before the incident of loss here involved she was assigned to Minneapolis, Minnesota, from where she was expected to cover areas in the states of Minnesota, Wisconsin, North and South Dakota. She was directed to rent a car in Minneapolis with which to travel the territory.

For this purpose she rented a car from the Avis Rent a Car System. When Mrs. Sloy started her travels in the area, the defendant Miss Miller, an employee of the Singer shop in Minneapolis, went along to work with her. On February 22, 1960, near Groton, South Dakota, the rented car driven by Mrs. Sloy and in which Miss Miller was a passenger, but not a guest, was involved in an accident resulting in injury to Miss Miller. Claiming that Mrs. Sloy was negligent in the operation of the rented car she sued her and Rival in the U. S. District Court for the district of South Dakota and recovered a judgment against both of them in the sum of $19,000 from which no appeal was taken and which is unsatisfied.

Royal Indemnity Company, plaintiff herein, provided liability coverage for Rival while the defendant Metropolitan Casualty Insurance Company of New York had issued a policy of liability insurance to Sam Sloy, husband of Mrs. Sloy, and the defendant Continental Casualty Company provided liability coverage for Avis.

The trial court concluded that by reason of an exclusion provision in its policy Continental was not liable and dismissed the action as to it. This ruling is not here in question. It also determined that Royal's policy insured the liability of Rival and its employee Mrs. Sloy and further concluded that the policy issued by Metropolitan to Sam Sloy also insured Mrs. Sloy. The limits of liability in the policy issued to Rival by Royal was the sum of $1,000,000 to any person injured in any one accident and in the Metropolitan policy carried by Mr. Sloy it was the sum of $25,000. The trial court held that the liability of Royal for the Miller judgment should be in the proportion of 1,000,000/1,025,000 thereof and that of Metropolitan in the proportion of 25,000/1,025,000 thereof. Judgment was entered accordingly from which only Royal appeals.

Concerning the renting of the car in question the court found that:

'* * * shortly before February 22, 1960, she went to Minneapolis, Minnesota, where, at the direction and on the credit of her employer, she rented a car from the Defendant Avis Rent a Car System in Minneapolis; that this was the first and only car rented by Mrs. Sloy; that on the written rental agreement her name is listed as the renter of the car; her employer had arranged for her to be furnished with an American Express credit card in her name, with the name of her employer immediately under her name upon said card, and her employer was to pay the rental bill or charge on the rented car and was to reimburse Mrs. Sloy for such items as gas, oil, and storage incurred by her in the operation of said car; that the rental for said car was charged to her employer, Rival Manufacturing Company, and a statement therefor was rendered to her said employer which said statement was paid by the said employer.'

From this basis it concluded that Mrs. Sloy 'was the agent of Rival Manufacturing Company in the rental of the car from Avis Rent a Car System, and therefore Rival Manufacturing Company was the renter or lessee.' Both of these determinations we think are justified and proper.

Royal's basic contention in the trial court and here is that its policy affords no protection to Mrs. Sloy with respect to the claim of Miss Miller. This position is stated in the brief as follows: 'It is manifest that Mrs. Sloy was operating a hired automobile and it makes no difference whether she was the lessee of such automobile or whether Rival Manufacturing Co. was the lessee, because, if Mrs. Sloy was the lessee, then she is excluded from coverage because she is not the named insured and, on the other hand, if Rival Manufacturing Co. was the Lessee, then she, of course, was an agent or employee of Rival Manufacturing Co., and...