State Farm Mutual Automobile Insurance Co. v. Belshe

• Decision Date: 24 January 1938
• Docket Number: 4-4914
• Citation: 112 S.W.2d 954,195 Ark. 460
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. BELSHE
• Court: Arkansas Supreme Court

112 S.W.2d 954

195 Ark. 460

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. BELSHE

4-4914

Supreme Court of Arkansas

January 24, 1938

Appeal from St. Francis Circuit Court; W. D. Davenport, Judge reversed.

Reversed.

Buzbee Harrison, Buzbee & Wright, for appellant.

Marvin B. Norfleet, for appellee.

OPINION

BAKER, J.

The appellant hereinafter referred to as the insurance company issued its policy to the appellee, hereinafter referred to by name, or as the insured or appellee, whereby the insurance company agreed to indemnify the appellee against liability imposed by law on account of injuries or death accidentally suffered through operation of the truck.Thereafter on August 6, 1934, while the truck was being driven by an employee of the appellee, Thomas Gross, it collided with an automobile driven by D. F. Patton who was injured.Notice of the accident was duly given, but the insurance company declined to handle the claim for the reason, it alleged, that Gross the driver, did not possess chauffeur's license, and had not made application for one as required by law, and, for that reason, it was contended the policy of insurance or indemnity did not cover or protect Belshe and there was no liability.Patton sued Belshe and notice of that fact was given to the insurance company, but it made no investigation or defense of the suit.

Belshe sued the insurance company for $ 1,151.50, which he had incurred as expenses, in the defense of the suit filed and prosecuted against him by Patton.The complaint alleged the foregoing facts and other material matters with a prayer to recover the amount of money incurred by the insured in defense of that suit filed by Patton.

The insurance company filed an answer to this suit by Belshe against it, and pleaded as a defense that, at the time of the collision of the truck with the automobile, plaintiff's employee, said Thomas Gross, had no chauffeur's license, and had not made application for one, and was, therefore, operating the truck in violation of the motor vehicle statute.The said answer pleaded further, as a part of the insurance company's defense, that the policy specially provided that the defendant should not be liable for any losses or damages caused while the motor vehicle, insured thereunder, was being driven or operated by any person violating any law as to age and driver's license.The pertinent part of the insurance policy is as follows:

"Risks not assumed by this company.The company shall not be liable, and no liability or obligation of any kind shall attach to the company for losses . . . (E) caused while the said automobile is being driven or operated by any person whatsoever . . . violating any law or ordinance as to . . . driving license."

To this answer the insured filed a demurrer as follows:

"Comes E. B. Belshe, plaintiff, and demurs to the answer filed in this cause by the defendant, State Farm Mutual Automobile Insurance Company, a corporation, and for cause states:

"That the facts stated therein are not sufficient to constitute a defense to plaintiff's cause of action alleged in his complaint herein."

The demurrer was sustained and the insurance company refused to plead further.Judgment was accordingly rendered for the amount sued for except penalty and attorney's fee.Motion for new trial was duly filed and overruled and the cause was brought here on appeal.

The only question is one of law.Does the answer filed by the insurance company state a defense?It should be said in the beginning that the particular portion of the policy of insurance involved here is not one open to construction.

The language is clear and understandable and no contention is made by appellee that any issue arising by reason of or on account of the fact that that provision of the policy above copied is ambiguous in any respect.The appellee argues most vigorously and presents numerous authorities to the effect that in the consideration of any exception to a policy of insurance that such exception in order to be available as a defense must have a causative effect or force bringing about or at least causing or aiding in the incident whereby the loss was suffered and that if it does not have this effect it does not and cannot constitute a defense to the main issue.

Appellee cites as illustrative of this principle many authorities, some of which are opinions by this court.Others cited are from other jurisdictions.There will be no effort upon our part to re-examine or analyze all of these authorities for the reason that we believe a few typical examples considered in their application to the matters in issue will be sufficient and a more extended review would be without profit.

One of the most typical cases is that of Benham v. American Central Life Insurance Company,140 Ark. 612, 217 S.W. 462.In that case the life insurance company defended because of a clause in the policy which exempted it from liability for death while engaged in military or naval service in time of war or in consequence of such service.For death due to prohibited conditions, there was liability for the reserve only under this policy, unless the company's permission to engage in such service shall have been obtained and such extra premium or premiums as the company might require shall have been paid.The insured died from influenza during his enlistment period in the military service of the United States.The court held in that case that the company was attempting to exempt itself from the hazards of warfare and that at the time of the death of the insured he was not so engaged in such service as to place him in more or greater danger than was incident to his life or occupation prior to his entering the service.

A similar case was Nutt v. Security Life Insurance Company,142 Ark. 29, 218 S.W. 675.This policy had a provision exempting it from liability in case of death while engaged in such service without a permit, except as to the reserve upon the policy at the time of death, and it was held...