State Farm Mut. Auto. Ins. Co. v. Pan Am. Ins. Co., No. B--1184

CourtSupreme Court of Texas
Writing for the CourtSTEAKLEY; McGEE; WALKER; POPE
Citation437 S.W.2d 542
PartiesSTATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Petitioner, v. PAN AMERICAN INSURANCE COMPANY, Respondent.
Decision Date12 February 1969
Docket NumberNo. B--1184

Page 542

437 S.W.2d 542
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Petitioner,
v.
PAN AMERICAN INSURANCE COMPANY, Respondent.
No. B--1184.
Supreme Court of Texas.
Feb. 12, 1969.

Albert Smith, Lubbock, for petitioner.

Key, Carr, Carr & Clark, Donald M. Hunt, Lubbock, for respondent.

STEAKLEY, Justice.

State Farm Mutual Automobile Insurance Company, Petitioner here and defendant below, was at the time in question the general automobile liability insurance carrier of Lester C. Liggett. The policy covered

Page 543

an automobile that had been converted into a pickup vehicle using butane gas. Pan American Insurance Company, Respondent here and plaintiff below, was the general liability insurance carrier for Western Service and Supply, a company that was engaged in the butane gas business. A fire occurred while the Liggett vehicle was being refueled by an employee of Western on the premises and from the facilities of Western. Liggett and his wife sued Western for personal injuries sustained by them in the fire, and for property damage to the vehicle. They alleged various acts of negligence against Western. Pan American called on State Farm to defend the suit. State Farm refused to do so. Pan American settled with the Liggetts for the sum of $6,000. Thereafter Western instituted this suit, in which Pan American intervened and became the real party at interest against State Farm to recover the settlement sum, together with attorney's fees and adjustor's expenses in the sum of $3,487.39. Pan American asserted that Western was an additional insured under the omnibus clause of the State Farm policy issued to Liggett, and that State Farm was under a contractual duty to defend Western in the Liggett suit, and to pay the damages that Pan American paid Liggett in settlement of the suit, together with the expenses of the litigation. Both parties moved for summary judgment, and the motion of Pan American asserting the liability of State Farm as a matter of law was granted by the trial court. Thereafter, in a jury trial to ascertain the amount of damages, the jury found that the settlement with the Liggetts was reasonable, and that the expenses of litigation of $3,487.39 were reasonable and necessary. Judgment in favor of Pan American against State Farm in the sum of $9,487.39 was rendered accordingly. The Court of Civil Appeals affirmed. 431 S.W.2d 765. We have concluded that Western was not an additional insured under the omnibus clause of the State Farm policy of insurance covering the Liggett vehicle.

State Farm, in Part I of its insurance contract with Liggett, agreed:

'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of:

A. bodily injury, sickness or disease, including death resulting therefrom, hereinafter called 'bodily injury', sustained by any person;

B. injury to or destruction of property, including loss of use thereof, hereinafter called 'property damage';

Arising out of the ownership, maintenance or use of the owned automobile or any non-owned auomobile, and the company shall defend any suit alleging such bodily injury or property damage and seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent; but the company may make such investigation and settlement of any claim or suit as it deems expedient.' (Italics added)

The contract further provided that 'The following are insureds under Part I:

(a) with respect to the owned automobile,

(1) the named insured and any resident of the same household,

(2) any other person Using such automobile with the permission of the named insured, providing his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission. * * *' (Italics added)

Under the heading of 'Definitions Under Part I' of the policy, it was provided that "use' of an automobile includes the loading and unloading thereof.'

It should first be understood that the insurance policy issued to Liggett by State Farm was designed to protect Liggett against all sums he might become obligated

Page 544

to pay as damages arising out of the ownership, maintenance and use of the motor vehicle. The contract did not insure Liggett for accidental personal injuries or property damage suffered by him or his wife. Here it is Liggett, the named and primary insured, who has been damaged and it is he, together with his wife, who sued to impose liability on Western, a third party and stranger to Liggett's contract with State Farm, whose only connection with the covered vehicle was for refueling purposes. Acts of negligence were charged against Western only, and liability of Liggett to pay damages was not involved. Nevrtheless, Pan American, whose primary insured is Western, is seeking to impose...

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54 practice notes
  • DeJarnette v. Federal Kemper Ins. Co., No. 15
    • United States
    • Court of Appeals of Maryland
    • September 1, 1983
    ...to be a broad catchall encompassing both operating and riding. State Farm Mutual Automobile Insurance Co. v. Pan American Insurance Co., 437 S.W.2d 542 Appellant further contends that the natural or general meaning of the word "use" is limited by the terms in the statute. Maryland Code (195......
  • Starr v. Commissioner of Environmental Protection, No. 14529
    • United States
    • Supreme Court of Connecticut
    • July 6, 1993
    ...interpreted invariably to require the taking of affirmative action. See State Farm Mutual Automobile Ins. Co. v. Pan American Ins. Co., 437 S.W.2d 542, 545 (Tex.1969) ("maintenance doubtless includes the idea of keeping in repair, but has a much broader meaning involving the concept of supp......
  • Wolfe v. Ross, No. 1048 WDA 2012
    • United States
    • Superior Court of Pennsylvania
    • May 7, 2015
    ...is inoperative, is a species of maintenance.” Eichelberger, 434 A.2d at 750 (quoting State Farm Mut. Ins. Co. v. Pan Am. Ins. Co., 437 S.W.2d 542, 545 (Tex.1969) ). Notwithstanding that Rice had been deemed negligent in stepping into Warner's path, we found that Rice's auto insurance policy......
  • Maryland Am. Gen. Ins. Co. v. Ramsay, No. 962
    • United States
    • Court of Appeals of Texas. Court of Civil Appeals of Texas
    • May 29, 1975
    ...488 (Tex.Civ.App.--Fort Worth 1967, no writ). See also State Farm Mutual Automobile Insurance Company v. Pan American Insurance Company, 437 S.W.2d 542 (Tex.Sup.1969); Hardware Dealers Mutual Insurance Co. v. Berglund, 393 S.W.2d 309 (Tex.Sup.1965). The purpose of an insurance contract bein......
  • Request a trial to view additional results
54 cases
  • DeJarnette v. Federal Kemper Ins. Co., No. 15
    • United States
    • Court of Appeals of Maryland
    • September 1, 1983
    ...to be a broad catchall encompassing both operating and riding. State Farm Mutual Automobile Insurance Co. v. Pan American Insurance Co., 437 S.W.2d 542 Appellant further contends that the natural or general meaning of the word "use" is limited by the terms in the statute. Maryland Code (195......
  • Starr v. Commissioner of Environmental Protection, No. 14529
    • United States
    • Supreme Court of Connecticut
    • July 6, 1993
    ...interpreted invariably to require the taking of affirmative action. See State Farm Mutual Automobile Ins. Co. v. Pan American Ins. Co., 437 S.W.2d 542, 545 (Tex.1969) ("maintenance doubtless includes the idea of keeping in repair, but has a much broader meaning involving the concept of supp......
  • Wolfe v. Ross, No. 1048 WDA 2012
    • United States
    • Superior Court of Pennsylvania
    • May 7, 2015
    ...is inoperative, is a species of maintenance.” Eichelberger, 434 A.2d at 750 (quoting State Farm Mut. Ins. Co. v. Pan Am. Ins. Co., 437 S.W.2d 542, 545 (Tex.1969) ). Notwithstanding that Rice had been deemed negligent in stepping into Warner's path, we found that Rice's auto insurance policy......
  • Maryland Am. Gen. Ins. Co. v. Ramsay, No. 962
    • United States
    • Court of Appeals of Texas. Court of Civil Appeals of Texas
    • May 29, 1975
    ...488 (Tex.Civ.App.--Fort Worth 1967, no writ). See also State Farm Mutual Automobile Insurance Company v. Pan American Insurance Company, 437 S.W.2d 542 (Tex.Sup.1969); Hardware Dealers Mutual Insurance Co. v. Berglund, 393 S.W.2d 309 (Tex.Sup.1965). The purpose of an insurance contract bein......
  • Request a trial to view additional results

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