Selected Risks Insurance v. Miller

Prescott, J. delivered the opinion of the Court. The only issue herein involved is one of insurance coverage. The case was tried below upon a stipulation of facts that may be summarized as follows: On June 20, 1959, Herbert Eads purchased an automobile from an automobile dealer in Mt. Rainier, Maryland.

Since he was unemployed, he arranged to have the automobile titled in the sole name of his wife, Peggy Louise Eads, in order to obtain financing from an automobile loan company. On September 17, 1959, the wife, individually as the named insured, purchased through a sales agent of the appellant a combination family automobile policy and paid $56.08 for one year’s coverage. The policy included liability coverage against bodily injury and property damage claims, and provided in pertinent part: “PERSONS INSURED: The following are insured under Part I: (a) With respect to the owned automobile, (1) the named insured and any resident of the same household, (2) any other person using such automo- bile, provided the actual use thereof is with the permission of the named insured; (b) With respect to a non-owned automobile, (1) the named insured, ¹⁷⁶ (2) any relative, but only with respect to a private passenger automobile or trailer, provided the actual use thereof is with the permission of the owner; (c) Any other person or organization legally responsible for the use of (1) an owned automobile, or (2) a non-owned automobile, if such automobile is not owned or hired by such person or organization, provided the actual use thereof is by a person who is an insured under (a) or (b) above with respect to such owned automobile or non-owned automobile. The insurance afforded under Part I applies separately to each insured against whom claim is made or suit is brought, but the inclusion herein of more than one insured shall not operate to increase the limits of the company’s liability.

DEFINITIONS—Under Part I: “named insured” means the individual named in Item I of the declarations and also includes his spouse, if a resident of the same household; “insured” means a person or organization described under “Persons Insured”; “relative” means a relative of the named insured who is a resident of the same household; “owned automobile” means a private passenger, farm or utility automobile or trailer owned by the named insured, and includes a temporary substitute automobile ; “non-owned automobile” means an automobile or trailer not owned by or furnished for the regular use of either the named insured or any relative, other than a temporary substitute automobile;” ¹⁷⁷ Mr. and Mrs. Eads lived together and kept the vehicle at their home in Lanham, Maryland, until January 4, 1960. On that date, they came to a parting of the ways, and Mr. Eads left her, going to live in Birmingham, Alabama, taking the vehicle with him. While in Alabama, Eads continued to pay for the car out of his own funds, as he had since the car was purchased, although he forwarded the money for each payment to Mrs. Eads and she made the payment to the loan company. At no time did she use her own funds to pay for the car.

On March 31, 1960, Eads secured an Alabama registration and license plates in the name of Mrs. Eads to replace the expired Maryland registration and license tags obtained when the car was first purchased. He did not notify or secure her permission to effect the Alabama registration, and, as a matter of fact, forged her name to the licensing papers required by Alabama. On May 2, 1960, he returned to the metropolitan area of Washington, D. C., but continued to live apart from Mrs. Eads. He resided at various motels near Washington, at all times keeping the car in his custody and control.

On May 28, 1960, one Richard E. Hall, while driving Eads’ automobile with his permission and while Eads was a passenger, negligently injured the minor appellee. A jury awarded him and his mother, appellees, damages against Hall and a writ of attachment was issued against appellant. At no time from January 4, 1960, when Eads separated from her until the accident did Mrs. Eads operate the motor vehicle or have custody or control of it. Also, at no time prior to the accident did the appellant have any knowledge that Mrs. Eads was merely a record owner