Utica Mutual Insurance Company v. Rollason, 7389.

• Decision Date: 28 May 1957
• Docket Number: No. 7389.,7389.
• Citation: 246 F.2d 105
• Parties: UTICA MUTUAL INSURANCE COMPANY, a corporation, Appellant, v. Robert E. ROLLASON, Administrator of the estate of Richard Moncure Young, deceased, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

246 F.2d 105 (1957)

UTICA MUTUAL INSURANCE COMPANY, a corporation, Appellant, v. Robert E. ROLLASON, Administrator of the estate of Richard Moncure Young, deceased, Appellee.

No. 7389.

United States Court of Appeals Fourth Circuit.

Argued April 10, 1957.

Decided May 28, 1957.

W. Worth Martin, Newport News, Va., and Theodore C. Pilcher, Norfolk, Va. (Hall, Martin & Smith, Newport News, Va., and Pilcher, Pilcher & Winters, Norfolk, Va., on the brief), for appellant.

H. Lee Kanter, Norfolk, Va. (Kanter & Kanter, Norfolk, Va., on the brief), for appellee.

Before PARKER, Chief Judge, SOBELOFF, Circuit Judge, and PAUL, District Judge.

SOBELOFF, Circuit Judge.

Our decision is required on a question of coverage under the omnibus clause of a garage liability policy.

The insurer is Utica Insurance Company, and the insured is Royals' Motor Service Company, Inc., of Hampton, Virginia. By the terms of the policy the word "insured" is defined to include not only the named insured, but also any other person using the automobile covered by the policy, provided the use is with the permission of the named insured.¹

Royals' Motor Service Company delivered possession of the insured automobile to its service manager, Paul T. Davis, from whom it was received by his son, Donald Lee Davis. In the early morning hours of December 19, 1954, while Donald was driving in Hampton, an accident occurred which resulted in the death of three of his passengers — a brother, Gerald Davis, and Richard Moncure Young and Betty Ruth Coddington. The latter two were students at William and Mary College whom Donald was taking back to Williamsburg. Three other students were also passengers in the car at the time, and suffered injuries.

Suit was filed by Young's Administrator, Robert E. Rollason, who recovered judgment against the operator, Donald Lee Davis. Execution on the judgment was returned unsatisfied, and the plaintiff, availing himself of the omnibus clause of the policy, sued the insurance company and recovered judgment in the total sum of $19,099.00 and costs. From this judgment the present appeal was taken.

The crucial question is whether or not the automobile was being used at the time of the accident with the permission of the named insured, as "permission" is meant in the policy. This question in turn may be separated into three: first, did Royals give Paul T. Davis permission to make general use of the automobile including use for personal purposes; second, did Davis have implied permission to lend the automobile to his son for personal use; and third, assuming an affirmative answer to the first two questions, was the use of the vehicle by young Davis, for the purpose in which he was engaged at the time of the disaster, with his father's unrestricted permission and hence, in legal contemplation, with the permission of Royals. Concededly, there was no express permission, but it is undisputed that permission may be either express or implied from the circumstances.

Based upon a stipulation of the employment contract and the policy, and upon an affidavit by an official of the Royals' Company asserting that Davis had permission to use the car only to travel to and from work, the defendant moved for summary judgment. The plaintiff likewise filed affidavits and a motion for summary judgment. As these documents raised substantial issues of fact, the District Judge properly overruled both motions.

At the conclusion of the testimony the appellant moved for a directed verdict, upon which the Judge deferred action, and submitted three special inquiries to the jury, substantially as above indicated. The jury answered each question in the affirmative, finding that there was permission for the use of the automobile by Davis for personal as well as business purposes, that he had implied permission to loan and did loan it to his son without restriction, and that the vehicle's use at the time of the accident to transport the students to Williamsburg was with the implied permission of Royals' Motor Service Company, Inc. We are to decide whether the Court should have directed a verdict for the defendant, and this depends on whether or not there was sufficient evidence warranting submission of the special issues to the jury.

Some weeks before the accident and while the policy was in force, the Royals' Motor Service Company, Inc. entered into a written employment agreement with Paul T. Davis. The agreement contained the following provision:

"* * * The party of the first part Davis shall receive a weekly salary of $115.00 until February 1, 1955 at which time his salary will be raised to $125.00. The party of the first part shall be furnished by the party of the second part, transportation without gasoline until February 1, 1955, after which time the party of the first part will furnish his own transportation * * *."

When Davis came to work for Royals in the fall of 1954, the insured Hudson automobile was turned over to him. There is disagreement between Davis and Clyde R. Royals, Jr., an officer of the Motor Company, as to what was said about the use of an automobile during the negotiations for Davis' employment and at the time the Hudson automobile was delivered to Davis. The provision in the employment agreement entitling the employee to "transportation without gasoline" is not enlightening as to the point in dispute here — the extent of the permission granted. We must, therefore, look beyond these words, in accordance with the traditional rule which permits extrinsic evidence when written language is ambiguous.

In the circumstances of this case, the District Judge would not have been justified in directing a verdict for the defendant, for this would have required giving the words a fixed meaning which they do not possess. Royals' version is that he limited the use of the automobile to transportation of Davis to and from work. This Davis denied, insisting that it was understood that he should have the use of the automobile generally, for personal, as well as business purposes. It is suggested that the little gasoline consumed by the employee in travelling from his house to his job, a comparatively short distance, would hardly have been considered of sufficient consequence to call for a special provision in the contract. Davis testified explicitly that he told Royals that he had to have a car because his Plymouth was fourteen years old, but that he could not afford a new car then; that he wanted a "decent automobile," one "proper to ride around and visit in." He was willing, he says, to use an older car for work, during the week, but he told Royals in the course of their negotiations that on weekends or to go to church or to ride around on Sunday, he was to have a later model. He exercised complete control over the insured Hudson from the time he received it from Royals, and used it for personal business, for Sunday riding, and going to the theatre, "or whatever became necessary," including use by his wife and by his son, Gerald, on weekends. Although Royals' testimony was to the contrary, Davis swore that he was seen by Royals making use of the car on Sunday for non-business purposes.

Davis further testified that in discussing terms of employment he had demanded, in addition to commissions, $125.00 per week and an automobile, and Royals offered to make the salary $100.00. Davis says Royals pointed out that insurance on the car would cost $10.00 per week, which Royals thought Davis should pay. Thus they agreed upon a salary of $115.00 per week and the Motor Company was to furnish him a car ("transportation without gasoline") till February 1, 1955, but after that he was to receive $125.00 per week and furnish his own transportation, for it was expected that by that time earnings on the commissions would be sufficient to enable him to buy a new car and supply his own transportation. Mr. Royals admitted that $10.00 per week was the estimate of the cost of furnishing a car to Davis, covering normal wear and tear and insurance.

The elder of Davis' sons, Donald, age 21, had but recently returned from several years of military service in Germany. On the evening of December 18, 1954, about 8:30 p. m., he was at home when his younger brother, Gerald, 19, an enlisted marine stationed at Quantico, arrived on Christmas furlough. The two brothers decided to celebrate the reunion after their long separation. Gerald declined his mother's offer to prepare a meal, saying that he had had a sandwich shortly before his arrival. She quotes him as saying, "We are going out for a while, so I'll get something then if I get hungry." The family spent the early part of the evening talking and wrapping Christmas packages, and about 10:30 p. m. the two young men announced that they were going out "to do the town, see some of their friends and get something to eat." Donald sought and obtained his father's permission to use the Hudson.

The brothers left in the automobile, stopped at a couple of nearby restaurants, at one of which they met five students from the College of William and Mary in Williamsburg, which is about 28 or 30 miles from Hampton. As the students had no way of returning that night to Williamsburg, Donald agreed to take them there when they offered to pay for the gasoline. It was then about 2:00 a. m. They proceeded to a point only about a mile or so distant from the Davis home, when the accident happened.

It is not claimed that when Davis turned the automobile over to his son any trip to Williamsburg was mentioned specifically, but Davis unequivocally testified that his permission to Donald to use the car was without restriction, "to use it as he saw fit;" that he said nothing to rule out a trip to Williamsburg, and would not have objected if the question had been directly raised; that he considered the use made of the car within the general permission he had given, and he instanced trips made with his consent to other towns, including Yorktown,...