Stone v. Waters

• Decision Date: 05 June 1972
• Docket Number: No. 25702,25702
• Citation: 483 S.W.2d 639
• Parties: Timothy F. STONE, Appellant, v. Clarence G. WATERS, Defendant, v. PHOENIX ASSURANCE COMPANY OF NEW YORK, Respondent.
• Court: Missouri Court of Appeals

Page 639

483 S.W.2d 639

Timothy F. STONE, Appellant, v. Clarence G. WATERS, Defendant, v. PHOENIX ASSURANCE COMPANY OF NEW YORK, Respondent.

No. 25702.

Missouri Court of Appeals, Kansas City District.

June 5, 1972.

Motion for Rehearing and/or Transfer to Supreme Court Denied

July 6, 1972.

Application to Transfer Denied Sept. 11, 1972.

Earl L. Nagels, Overland Park, Kan. (Granger & Nagels, Overland Park, Kan., of counsel), for appellant.

Jack G. Beamer, Kansas City (McKenzie, Williams, Merrick, Beamer & Wells, Kansas City, of counsel), for respondent.

PER CURIAM:

In this garnishment action in aid of the execution of a $10,000.00 judgment recovered by appellant Stone against defendant Waters, the trial court found for respondent Phoenix Assurance Company of New York on its so-called Garage Insurance policy of insurance. Stone was a passenger in an automobile titled in Waters' mother, Geraldine Potter (but there was evidence that the automobile, a 1965 Chevrolet, was paid for by another one of Geraldine's sons who was in the military service). The automobile was being driven by Waters on October 15, 1968, when it struck a tree, causing Stone to suffer a broken back.

The policy was issued to Geraldine's husband, 'Allen C. Potter DBA B & H Auto Service, 5413 Prospect, Kansas City, Jackson County, Mo.', for a period from August 24, 1968 to August 24, 1969. Under Item 3 it provided, 'The insurance afforded is only with respect to such of the following Coverage Parts as are indicated by specific premium charge or charges.' Following that the premiums specified are 'Uninsured Motorist $5', and 'Garage Insurance $452'. Under the garage liability insuring agreement, 'The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of G. bodily injury or H. property damage to which this insurance applies, caused by an occurrence and arising out of garage operations, including only the automobile hazard for which insurance is afforded as indicated in the declarations, * * *.'

The basis for denial of coverage of the policy was that neither Geraldine nor her son Clarence G. Waters were named insureds under the policy because they were not residents of the same household as Allen C. Potter at the time of Stone's injury. This was the sole ground of such denial stated in a letter to Geraldine with a carbon copy to Allen. It is based upon Auto. 6782 endorsement, 'INDIVIDUAL NAMED INSURED' which states that the insurance afforded is modified as to garage and automobile medical payments: 'It is agreed that the insurance applies with respect to the individual named in Item 1. (Allen C. Potter) of the declarations, subject to the following additional provisions: 1. Additional Definitions When used in reference to such insurance (including this and other endorsements forming a part of the policy): 'named insured' includes the spouse of the individual named in Item 1. of the declarations if a resident of the same household, except with respect to notice of cancellation; 'relative' means a relative of the named insured who is a resident of the same household.' (Italics indicate bold type.) Under the Garage Insurance endorsement (Auto. 6695) under paragraph IV. PERSONS INSURED, it is stated, 'Each of the following is an insured under this insurance to the extent set forth below: Under the Garage Bodily Injury and Property Damage Liability Coverages: (1) the named insured; * * * (3) with respect to automobile hazard: (a) any person while using, with the permission of the named insured, any automobile to which the insurance applies under the automobile hazard, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission, * * *.'

The Garage Insurance endorsement continues: "automobile hazard' means that one of the following hazards for which insurance is afforded as indicated in the schedule: Automobile Hazard 1. (1) The ownership, maintenance or use (including loading and unloading) of any automobile for the purpose of garage operations, and (2) the occasional use for other business purposes and the use for non-business purposes of any automobile owned by or in charge of the named insured and used principally in garage operations, and (3) the ownership, maintenance or use of any automobile owned by the named insured while furnished for the use of any person.'

Following 'Automobile Hazard 1' (and other provisions) is a Schedule. Item 2(b) of the schedule provides: 'automobiles owned by the named insured are furnished to the following persons or organizations for their regular use for other business purposes or for non-business purposes (do not list the named insured, any partner, member, executive officer or, if a resident of the same household, the spouse of any of them, unless more than one automobile is furnished concurrently to such person and then show only the number of automobiles so furnished in excess of one): Name * * * Number of Such Automobiles.'

Allen C. Potter testified that on October 15, 1968, his home was at 7112 East 107th Street in Kansas City, Missouri, and his garage was then at 5413 Prospect Avenue. He was then sleeping at the garage most of the time. He bought the policy from Bud Willing Insurance Agency, a broker, and was attempting to obtain garage liability insurance, 'and I asked at the time if my wife and boy was covered under this insurance.' Allen was married to Geraldine November 23, 1957, and he never contemplated a divorce proceeding and did not intend to--he was happily married to Mrs. Potter. The two of them resided under one roof for about 7 years. He slept most of the time at the garage because there was trouble with an older boy, and he and Geraldine agreed that until they could get the boy straightened out they would live that way. Allen had paid for the furniture in the house where he visited his wife frequently, and spent nights with her. She did his washing. He paid the rent, the utilities, and gave his wife money to live on. Geraldine stayed with him at nights in the garage where he had a room fixed up. Allen's personal mail (garage business mail) came to the garage, but he did receive mail at the house. He considered 7112 East 107th as his home. 'A. Well, actually it is my home. I am the head of the place there. It is my household. I take care of it. * * * Well, as far as I am concerned, that is my household, and my boy was a resident, and my wife was too. * * * We file joint income tax. I pay all the bills. If there was anything about not being a regular household, I don't know what it could be.' On cross-examination it was developed that Allen's wife and her three children resided at the house while he resided at his garage on Prospect. The younger boy's name was Clarence; and Allen had a stepson named Terrence, and there was an older boy, Fred, who lived there. Allen's wife was not a partner in the business, but worked elsewhere. On October 15, 1969 (1968?) Geraldine had two cars titled in her name, a 1959 Chevrolet 4-door hardtop and a 1965 Pontiac GTO, neither of which were used in the garage business--they were just personal cars for her use and the boy's use if she wanted to let him. Allen had 4 cars; two titled in his name and used by him, and two titled in Geraldine's name and used by her. None of these cars were endorsed on the insurance policy by description.

In February, 1968, Terrence McIntosh, the middle boy, bought a 1965 Chevrolet Sport Coupe, with money from his grandmother's estate. It was not used in the garage business, but Geraldine drove it some. Allen did not drive it. Terrence was not home, but was then in the military service. Geraldine bought the car for him and took title in her name in order to hold the car for him. When Terrence returned from the service, title and all would be given him.

One of the points which Phoenix makes in argument, a fact which the trial court found, is that the 1965 Chevrolet Sport Coupe was not owned by Allen or Geraldine, but was owned by Terry McIntosh. Such fact does not constitute a defense to the garnishment action. 'Since motor vehicle liability insurance ordinarily covers legal liability for injury to person or property of others resulting from ownership, maintenance, or use of a motor vehicle, an insurable interest may exist apart from ownership, or complete ownership, where the circumstances are such that insured may be legally responsible for damages resulting from its use.' 44 C.J.S. Insurance § 198, p. 896. The reason for such a rule is amplified in Commonwealth Casualty Co. v. Arrigo, 160 Md. 595, 154 A. 136, 137, 'In the case before us, the risk and hazard insured against is not the injury or loss of the property named in the policy, but against loss and injury sustained by others, caused by the use of the property therein named, for which the assured, as its titled owner, might be liable, and the right of the assured to recover does not depend upon his being the holder, in fact, of either a legal or equitable title in the property, but whether he, the holder of the title, as stated in the certificate of title issued by the motor vehicle commissioner and in the policy of insurance, is primarily charged at law or in equity with an obligation for which he is liable.' See also Kahn v. Lockhart, Mo.App., 392 S.W.2d 30, 37(8), 'It is the settled rule that it is not necessary that the insured * * * have an insurable interest in the automobile insofar as liability insurance is concerned.' (Citing cases.) It is thus immaterial to the disposition of this case that Terry McIntosh owned the car, if Geraldine Potter is a named insured within endorsement Auto. 6782, supra.

The matter of whether a person is a resident of the same household of an individual named insured so as to be afforded coverage in a liability insurance policy has been considered in a number of cases analogous in...