Adkins v. Insurance Co. , 124 W. Va. 388 ( 1942 )

I do not agree that the protection of James Canterbury in the event that the accident had occurred when he was operating the machine would necessarily rest upon the fact that he was doing so with the permission of the named insured, meaning Earl Canterbury. In my opinion, that conclusion can be arrived at only by entirely disregarding the certificate filed by the defendant company with the State Road Commission's Safety Responsibility Department stating that the purpose of the policy certified to have been issued was to "relieve a household member or an employee who is not a motor vehicle owner," naming James Canterbury. The insurance company was fully informed of the fact that the policy was to be given in compliance with the requirements of Code, 17-20-5, to the effect that a driver's license cancelled for cause may be reinstated upon the furnishing of proof of financial responsibility by the giving of bond or the issuance of "a motor vehicle liability policy" for the benefit of the personfurnishing such proof "and named as the insured." Certainly the terms of the act requiring the policy and defining the coverage are to be read into a contract of insurance knowingly given under the act, in order to receive the benefit of its provisions, (Guzenfield v. Liberty Mut. Ins. Co.,286 Mass. 133, 190 N.E. 23) regardless of form or whether the person furnishing the proof of financial responsibility is, as the act requires, named as the insured in the body of the policy, or whether his name appears by indorsement thereon. I am, therefore, of the opinion that James Canterbury is, under the circumstances clearly shown by the record before us, to be regarded as a named insured and that Coffman at the time of the accident was operating the car with his permission, circumstantially, if not expressly, shown. I do not believe that the policy being worded so that the named insured is described as the "sole owner" of the car covered, should be permitted to interfere with the intended compliance with the act. If the requirements of the act are to be read into the policy, certainly they should not be construed as favoring the insurer, though otherwise there might be more than one named insured.

Furthermore, I am of the opinion, conceding that Earl Canterbury is to be regarded as the sole named insured, that even then there is testimony sufficient to go to the jury on the question of whether at the time of the accident, Coffman was operating the automobile with his permission, impliedly given.

In Massachusetts, they have what is commonly known as a compulsory motor vehicle insurance act, and while the legal questions that arise thereunder, of course, are not identical with those which arise under our financial responsibility act, they are closely enough akin to make their analogy of reasoning extremely persuasive.

In the case of Boyer v. Massachusetts Bonding InsuranceCo., (1931) 277 Mass. 359, 178 N.E. 523, the insurance company was sued in chancery to recover the amount of a judgment in an action for death by wrongful act against the driver of the automobile described in the insurance policy, who was not the named insured. Charles F. Brown, the named insured to whom the policy was issued, lived at Matapan, Massachusetts. His son, William H. Brown, admittedly with his permission, took the car from there to New York City. In New York, William H. Brown, with, he testified, the permission of his father, turned the car over to Chester Carter, an employee of his, to use on his vacation and to leave with his, Carter's, father's family for use and sale. The Carter home was at Methuen, New York. At the time of the accident, the car was being driven by Lloyd Carter for the purpose of taking Edwin F. Carter (his father) and two others to work. The trial chancellor held that William H. Brown had the unrestricted use and custody of the car, and that he had turned it over to Edwin F. Carter with the permission of the named assured, his father, and that Lloyd Carter was driving it under the control and direction of Edwin F. Carter, who, therefore, was operating the car with the permission of the named insured, Charles F. Brown. To restate this rather complicated bailment, Charles S. Brown owned the automobile and was the named assured; he turned the car over to his son, William H. Brown, as an unrestricted bailee, with power to sell, with the permission of the named assured; William H. Brown delivered the car to Chester Carter to be used and left at his father's house for sale and use; the Carter father was a passenger in the car, but not driving, at the time of the accident. It will be seen that in this case there were three distinct transfers of possession: from the named insured to his son, from that son to Chester Carter, and from Chester Carter to his father, Edwin L. Carter. It will also be noted that at the time of the accident, the car was not being driven by the final bailee, but by his son, Lloyd Carter, Edwin L. Carter being a passenger. The conclusion of the court was that, under these circumstances, the automobile was being operated with the implied consent of the named insured, and a recovery under the policy was allowed.

Guzenfield v. Liberty Mutual Insurance Co., (1934)286 Mass. 133, 190 N.E. 23, 24, was a chancery proceeding to recover under a compulsory insurance policy the amount of a judgment recovered by one Meade, the policy running in the name of Meade's employer, Metropolitan Furniture Company. Under the terms of the policy, the omnibus coverage provision was restricted to the operation of the vehicle with the express or implied consent of the named insured. The insured had admittedly a definite rule against the operation of its automobile by persons other than its employees, so that at the time of the accident during business hours when the car was being driven by a woman friend of Meade's learning to drive, he being a passenger, no inference of the assured's permission could arise. The Massachusetts Supreme Court, however, applying as controlling the terms of the Massachusetts statute, held that its effect was to make not only the owner the assured, but to include in that category "any person responsible for the operation of the insured's (owner's) motor vehicle with his express or implied consent, * * *," stating: "In requiring the policy — a condition of valid registration — to cover not only the owner, but also anyone responsible to him in its use, contemplated that the liability of the insurer should, so to speak, run with the car unaffected by the owner's action unless its presence onthe public ways was without his sanction." (Italics mine.) A recovery was sustained.

In the case of Moschella v. Kilderry, (1935) 290 Mass. 62,194 N.E. 728, it was held that the Massachusetts compulsory insurance act did not apply where the husband of the car owner, in her presence and with her acquiescence, loaned the automobile to a neighbor without granting authority to transfer its custody and control to another, and that permission to use by itself did not include the power to transfer that permission, even though the bailee was riding in the automobile when the accident occurred, as in the Boyer case.

In Woznicki v. Travelers Insurance Co., (1938) 299 Mass. 244,12 N.E.2d 876, the owner and named assured had loaned his car to a neighbor with its full use and custody, but with neither express nor implied authority to transfer the custody to another. While using the car, the neighbor picked up two acquaintances and a woman friend and drove to a small town where they spent some little time, changing seats when they started back, so that the operation of the car upon the return trip fell to a man who had had no contact, direct or indirect, with the named assured. The accident occurred after the change in the operator of the automobile had taken place. The trial court decree denying recovery was affirmed by the supreme court, the car not being driven at the time of the accident by a person with the insured's express or implied consent.

The foregoing cases being based upon the construction of a Massachusetts statute and being only persuasive are cited mainly for the purpose of illustrating that the provisions of a policy of insurance given in compliance with a statutory requirement are inclusive of the affecting terms of the statute, the statutory provisions controlling even when they are in conflict with the terms of the policy. Beyond this it is of interest to note that the Massachusetts cases apparently turn upon the question of whether the named insured has turned the custody of the automobile over to another with the authority to transfer that custody to a third person, that being his right under the Massachusetts act, or has delivered the car to another without that authority, a situation to which the act does not apply.

In the case of Monroe v. Heard (1936) (La.App.),168 So. 519, the Supreme Court of Louisiana held that the omnibus coverage clause does not include a person to whom the operation of the vehicle is entrusted by a borrower thereof, but it went further and also held that the testimony should have been submitted to the jury on the theory that the borrower, having the custody and control, by permitting another person to drive the vehicle did not necessarily surrender the custody or operation thereof to the driver, but retained it, the manual control being under his supervision. As holding that the bailee of an automobile, as such, has no authority to turn over the custody and control of an automobile to another so as to constitute that other "additional insured" under the omnibus provisions of the Wisconsin statute, although if the insured has given authority or approval to the transfer of control, the insurer is liable, see the case of Locke v. General Accident,Fire Life Assurance Corp. (1938), 227 Wis. 489, 279 N.W. 55.

The Supreme Court of Appeals of Virginia in the case ofHinton v. Indemnity Insurance Company of North America (1940), 175 Va. 205, 8 S.E.2d 279, holds that under the omnibus clause of a statute, the permission of the assured may be shown to have been either express or implied, and that implied permission is not confined to affirmative action, but may rest upon lack of its negation under circumstances signifying consent.

For citations relating in general to the omnibus coverage clause, see annotations in 106 A.L.R. 1251, and 126 A.L.R. 544.

For the foregoing reasons I am of the opinion that there is ample proof to sustain the contention that at the time of the accident Coffman was driving with the implied permission of James Canterbury and that, as a matter of law under Code, 17-20-5, James, as the named insured, had the direct right to grant Coffman permission to drive or, as a matter of fact, James Canterbury was impliedly authorized by Earl Canterbury to grant that permission. Therefore, I would affirm the judgment of the circuit court.

Judge Rose joins in this dissent.