Whaley v. Great Am. Ins. Co., 313

• Decision Date: 14 June 1963
• Docket Number: No. 313,313
• Citation: 131 S.E.2d 491,259 N.C. 545
• Parties: Lillian H. WHALEY, Administratrix of the Estate of William Charles Whaley, Deceased, and Firestone Tire and Rubber Company, v. GREAT AMERICAN INSURANCE COMPANY and Insurance Company of North America.
• Court: North Carolina Supreme Court

Page 491

131 S.E.2d 491

259 N.C. 545

Lillian H. WHALEY, Administratrix of the Estate of William Charles Whaley, Deceased, and Firestone Tire and Rubber Company, v. GREAT AMERICAN INSURANCE COMPANY and Insurance Company of North America.

No. 313

Supreme Court of North Carolina.

June 14, 1963

Taylor, Allen & Warren, Scott B. Berkeley and John H. Kerr, III, Goldsboro, for plaintiffs.

Braswell & Strickland, Goldsboro, for defendant Great American Ins. Co.

T. Lacy Williams, Raleigh, for defendant Insurance Co. of North America.

BOBBITT, Justice.

In the Burgess (consent) judgment it was agreed that, upon payment thereof by Firestone, 'an action may be brought by it, as subrogee of the William Charles Whaley estate, or in the name of Lillian H. Whaley, Administratrix of the estate of William Charles Whaley v. Great American Insurance Company and North American Insurance Company (sic), to determine their liability on the policies referred to. ' Firestone paid the judgment. This action was instituted solely for its benefit. It is not an insured under either policy. It must recover, if at all, as subrogee. It stands in the same position as that in which the administratrix of Whaley's estate would stand if she had paid the judgment and were the plaintiff and real party in interest herein.

Plaintiffs' Appeal.

Plaintiffs' appeal is from the portion of the judgment providing that they 'have and recover nothing of the defendant Insurance Company of North America.'

When the accident occurred, Whaley was driving Firestone's Ford. He was not driving the automobile specifically described in the policy, to wit, his Plymouth.

The liability, if any, of Insurance Company of North America must be based on Paragraph V ('Insuring Agreements') of its policy, which, in pertinent part, provides:

'V. Use of Other Automobiles: If the named insured is an individual or husband and wife and if during the policy period such named insured, or the spouse of such individual if a resident of the same household, owns a private passenger automobile covered by this policy, such insurance as is afforded by this policy under coverages A, B, division 1 of coverage C and E with respect to said automobile applies with respect to any other automobile, subject to the following provisions:

'(a) * * *

'(b) * * *

'(c) * * *

'(d) This insuring agreement does not apply:

'(1) to any automobile owned by or furnished for regular use to either the named insured or a member of the same household other than a private chauffeur or domestic servant of such named insured or spouse; * * *.'

Was Firestone's Ford 'furnished for regular use to' Whaley within the intent and meaning of (d) (1)?

The 'Use of Other Automobiles' clause 'extends the driver's regular insurance to casual driving of automobiles other than his own without the payment of an extra premium, and usually excludes from coverage other cars owned by the insured or by members of his household as well as cars furnished for regular use of the insured or used in his business.' 7 Am.Jur. 2d, Automobile Insurance § 105; Annotations: 173 A.L.R. 901, 83 A.L.R.2d 926, 86 A.L.R.2d 937; 7 Appleman, Insurance Law and Practice, § 4455.

'The obvious purpose of the 'other car' provisions, with the exceptions, as to provide coverage to a driver without additional premiums, for the occasional or infrequent driving of an automobile other than his own. They are not to take the place of insurance on automobiles which are furnished for the regular use of the insured. (Citations) The purpose is not to insure more than one car on a single policy. ' Wyatt v. Cimarron Insurance Company, 10 Cir., 235 F.2d 243; Home Insurance Company v. Kennedy (Del.), 2 Storey 42, 152 A.2d 115.

In Campbell v. Aetna Casualty and Surety Co., 4 Cir., 211 F.2d 732, the Court of Appeals, in opinion by Soper, J., quotes with approval, as in accord with the great weight of authority, the following from the opinion of Chestnut, J., in Aler v. Travelers Indemnity Co., D.C., 92 F.Supp. 620, viz.: 'The general purpose and effect of this provision of the policy is to give coverage to the insured while engaged in the only infrequent or merely casual use of an automobile other than the one described in the policy, but not to cover him against personal liability with respect to his use of another automobile which he frequently uses or has the opportunity to do so. ' In Leteff v. Maryland Casualty Company, La.App., 91 So.2d 123, the court, after an exhaustive review of earlier decisions, approves the interpretation given in Judge Chesnut's opinion in Aler. Later decisions of like import include Home Insurance Company v. Kennedy, supra; O'Brien v. Halifax Insurance Co. of Massachusetts, Fla.App., 141 So.2d 307.

'No absolute definition can be established for the term 'furnished for regular use'. Each case must be decided on its own facts and circumstances. ' Home Insurance Company v. Kennedy, supra; Miller v. Farmers Mutual Automobile Insurance Co., 179 Kan. 50,292 P.2d 711.

During 1959 and prior thereto, Firestone's Ford 'was stationed' at its place of business at Goldsboro 'for the regular use of its manager, William Charles Whaley, and five other employees in the conduct of the company's business. ' Clearly, the policy on Whaley's own individual car, the Plymouth, would provide no coverage if Whaley, when the accident occurred, had been engaged 'in the conduct of the company's business. ' Farm Bureau Mut. Automobile Ins. Co. v. Boecher, Ohio App., 48 N.E.2d 895; Farm Bureau Mutual Automobile Ins. Co. v. Marr, D.C., 128 F.Supp. 67; Voelker v. Travelers Indemnity Company, 7 Cir., 260 F.2d 275; Home Insurance Company v. Kennedy, supra. Of like import, but relating to medical payments coverage rather than liability coverage: Dickerson v. Millers Mutual Fire Ins. Co. of Texas, La.App., 139 So.2d 785; Moore v. State Farm Mutual Automobile Ins. Co., 239 Miss. 130, 121 So.2d 125; O'Brien v. Halifax Insurance Co. of Massachusetts, supra.

When the accident occurred, Whaley was using the Ford 'for his own personal business or pleasure without the knowledge, permission or consent' of Firestone. Firestone's regulations provided, inter alia, that '(n)o one, under any circumstances (was) to use or operate company vehicles for personal affairs or pleasure. ' When employed by Firestone in 1941, Whaley agreed (in writing) to comply with Firestone's instructions concerning the use of company cars by an employee, including the following: 'Under no circumstances is the Company car to be used or operated by you in the interest of your personal affairs or pleasure and not upon the business of the Company and the carrying out of Company duties you were employed to perform.'

Whaley had, 'on numerous occasions between January 8, 1959 and June 13, 1959, and prior thereto,' used the Ford 'for his own personal business and pleasure. ' (Our italics) Firestone had no actual notice or knowledge of Whaley's use of its Ford for his own personal business and pleasure until the trial of the Burgess case in October, 1960. Whaley was manager of Firestone's Goldsboro store; and, as manager, Whaley's authority in Goldsboro with reference to the use of Firestone's Ford was final. In fact, Firestone's Ford was available for Whaley's use for his own personal business and pleasure and was so used by him 'on numberous occasions.'

The contention that the policy provides coverage because, when the accident occurred, Firestone's Ford was being used by Whaley for his own business and pleasure rather than 'in the conduct of the company's business,' is untenable. The fact that Whaley was using the Ford in violation of Firestone's regulations and instructions cannot enlarge the coverage provided Whaley by the policy on his own individual car, a Plymouth. To hold otherwise would permit Whaley to benefit from his own wrongful conduct. A different basis of decision must be found.

In Iowa Mutual Insurance Company v. Addy, 132 Colo. 202, 286 P.2d 622, the 'Use of other automobiles' clause under consideration provided, inter alia, it did not apply to any other automobile furnished for regular use to the named insured. The question was whether the policy, which specifically described an Oldsmobile owned by the insured, provided coverage to the insured with reference to a liability he incurred while operating his employer's Chevrolet. The employer, a casualty company, had provided the Chevrolet for the insured's use as a claim adjuster. The insured used the Chevrolet daily in his employer's business and, with his employer's knowledge and consent, kept it at his home overnight. On Thanksgiving Day the insured was involved in an accident while en route to the home of friends 'across the City of Denver,' with whom the insured, his wife and their children were to have dinner. The court held the policy did not cover the insured's liability and reversed the judgment the plaintiff (insured's wife) had obtained in the trial court. The opinion of Holland, J., states: 'It is undisputed and undenied that the automobile in which plaintiff was riding was furnished her husband for his regular use in his employment. Such automobile by a provision of paragraph V(b) (1) of the policy is excluded, because the provisions are clear that the insuring agreement did not apply to any automobile 'furnished for the regular use to the named insured.' ' This Colorado decision is discussed in Ransom v. Fidelity & Casualty Co., 250 N.C. 60, 108 S.E.2d 22, with particular reference to the 'Temporary Substitute Automobile' clause. Here it was stipulated Firestone's Ford 'was not a temporary substitute automobile as that term is used in the policies issued by the defendants' to Whaley.

In our view, coverage depends upon the availability of the Ford for use by Whaley and the frequency of its use by Whaley. Rodenkirk for Use of Deitenbach v. State Farm Mut. Automobile Ins. Co., 325 Ill.App. 421 60 N.E.2d 269; Vern v. Merchants...