Young v. State Farm Mutual Automobile Insurance Co.

• Decision Date: 10 May 1957
• Docket Number: No. 7334.,7334.
• Citation: Young v. State Farm Mutual Automobile Insurance Co., 244 F.2d 333 (4th Cir. 1957)
• Parties: Raymond L. YOUNG, Raymond L. Young, Administrator of the Estate of Mary E. Young, and Brenda Joyce Young, an infant who sues by her father and next friend, Raymond L. Young, Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Bloomington, Illinois, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

244 F.2d 333 (1957)

Raymond L. YOUNG, Raymond L. Young, Administrator of the Estate of Mary E. Young, and Brenda Joyce Young, an infantwho sues by her father and next friend, Raymond L. Young, Appellants, v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Bloomington, Illinois, Appellee.

No. 7334.

United States Court of Appeals Fourth Circuit.

Argued March 11, 1957.

Decided May 10, 1957.

David H. Kizer, Jr., Lynchburg, Va. (Thomas L. Phillips and Kizer & Phillips, Lynchburg, Va., on the brief), for appellants.

John B. Browder, Richmond, Va.(Leaman, Browder & Russell, Richmond, Va., Henry M. Sackett, Jr., and Williams, Robertson, Sackett & Blackburn, Lynchburg, Va., on the brief), for appellee.

Before PARKER, Chief Judge, and SOPER and SOBELOFF, Circuit Judges.

SOPER, Circuit Judge.

This case involves the interpretation to be given to the omnibus clause of an automobile insurance policy under the law of Tennessee; and specifically whether Andrew Blakely Massey was driving the car of C. Wythe Edwards, the insured, with the latter's permission when the car came into collision with an automobile occupied by Raymond L. Young, his wife Mary E. Young and his infant daughter Brenda Joyce Young, causing the death of Massey and Mrs. Young and injuring the other riders in the Young car.Suits brought by Young on behalf of his wife's estate and on behalf of his daughter and himself resulted in judgments against the estate of Massey, and when executions on the judgments were returned "no effects" the present suits were brought against the insurance company to require it to pay the judgments in amounts within the policy limits.The cases were consolidated and tried before the District Judge without a jury and were dismissed on the ground that the use of the car by Massey at the time of the collision was without the owner's permission.The plaintiffs appealed; and since the contract of insurance was executed in Tennessee it is conceded that the policy should be interpreted according to the law of that state.

Massey was employed as a salesman in the summer of 1954 in Bristol, Tennessee, by Bristol Lincoln-Mercury Company.His wife was then living in Portsmouth, Virginia, and his parents in Accomac County, Virginia.Edwards, who lived in Johnson City, Tennessee, was employed as a claims adjuster for the defendant insurance company at its Bristol office.He owned a second-hand Ford car which he desired to dispose of, and coming into contact with Massey at the Bristol office engaged him to sell the car on a commission basis.Pursuant to this arrangement the car was delivered to Massey with the understanding that Massey would drive the car for the purpose of finding a customer and demonstrating it to prospective purchasers.He was to pay for the necessary oil and gasoline and keep the car clean and in good repair.Edwards told him, however, that he did not want him "gallivanting around" in it or using it for personal business.

Massey undertook to find a purchaser and demonstrate the car, but without the knowledge of Edwards used it for his personal use to some extent.Thus, in August 1954, he drove the car through Portsmouth, Virginia, to Accomac County to visit his family, and made an effort to sell the car to his father.On his return he was arrested in Lynchburg for giving a bad check and the policeman, suspecting that the car was stolen, telephoned Edwards in Johnson City and was told that if Massey had the car in Lynchburg to sell it, it was all right.

Later the same day Edwards went to Bristol to take his car back as he was irritated with Massey for using the car on the long trip to Accomac County.Not finding him, he returned to Bristol two days later for the same purpose.He charged Massey with diminishing the value of the car by taking the trip of nearly 1,000 miles, but when Massey explained that he thought he could sell the car on the Eastern Shore, Edwards consented for him to keep the car, but told him that he was not to take the car out of the Bristol area for any purpose.

On September 2, Edwards again saw Massey in Bristol and told him that if he had not sold the car by the following Saturday, he was going to take it back, as his wife needed it.Early in the morning of Saturday, September 4, Massey called Edwards on the telephone and asked him if he was coming over to Bristol that day to take the car back, and Edwards replied that he was.Then Massey began to talk about buying the car himself and they about agreed on terms, but it transpired that, in order to purchase the car, Massey would have to secure a loan.The parties came to the understanding that Edwards would come to Bristol early the following week to see whether Massey could make arrangements for the purchase of the car.In this conversation, Massey told Edwards that he was going to Portsmouth that day.Edwards asked how he was going, to which Massey replied that he was going on the bus because he knew Edwards did not want him to drive his car.Thereupon, Edwards expressly forbade Massey to drive the car to Portsmouth, and Massey told Edwards he was not going to do so.Nevertheless, Massey did take the car that day on his trip to Portsmouth and sometime after midnight, when he had reached a point a few miles east of Lynchburg, the fatal collision occurred.

We have had occasion in a number of decisions to consider the standard omnibus clause of an automobile policy and to determine under a variety of circumstances whether permission given by the insured for the use of the car was broad enough to cover the use to which the car was put by another at the time of an accident.SeeContinental Casualty Co. v. Padgett, 219 F.2d 133, in which we reviewed the authorities in this circuit and noted that some courts hold the view that, in order to bring a driver other than the named insured within the coverage of the clause, it must be shown that permission for the use of the car had been expressly or implicitly given by the named insured, while other courts take the liberal view that express permission for a given purpose implies permission for all purposes.

The Tennessee courts have been placed in the latter category principally because of the decision in Stovall v. New York Indemnity Co., 1928, 157 Tenn. 301, 8 S.W.2d 473, 477, 72 A.L.R. 1368.In that case a wholesale dry goods corporation assigned the insured car to a salesman for use in covering his territory but instructed him not to use the car for his personal purposes.In disregard of this limitation, the salesman drove the car for a considerable distance on a visit to a young lady and an accident occurred during the trip.It was held that the insurance company was liable under the policy.The court said that if an automobile covered by a policy is delivered to another for use with the permission of the insured, his subsequent use of it occurs with the permission of...