Home v. Great American Insurance Co.

Full title: HOME et al. v. GREAT AMERICAN INSURANCE COMPANY et al

Court: Court of Appeals of Georgia

Date published: Jan 28, 1964

109 Ga. App. 24 (Ga. Ct. App. 1964)

134 S.E.2d 865

Opinion

40473.

DECIDED JANUARY 28, 1964.

Declaratory judgment. Fulton Superior Court. Before Judge Tanksley.

Bryan, Carter, Ansley Smith, W. Colquitt Carter, Henry M. Quillian, Jr., for plaintiffs in error.

T. J. Long, Ben Weinberg, Jr., Robert D. Engelhart, George Anderson, contra.

The general comprehensive liability insurance policy of the defendant insurer which provided bodily injury and property damage liability insurance coverage on all automobiles owned by its insured when used with his permission constituted concurrent or other insurance within the meaning of the "prorata" or "other insurance" clause of the plaintiff insurer's automobile liability insurance policy which specifically insured one of said vehicles against like risks.

DECIDED JANUARY 28, 1964.

This was a suit for declaratory judgment brought by the Great American Insurance Company against its insured, Kinzel Parrott, Parrott's son and employee, Wiley Parrott, George E. Home, Jr., d/b/a Home Equipment Company, and his insurer, the United States Fidelity Guaranty Company, to determine certain rights, liabilities and obligations of the plaintiff and defendant insurance companies under policies of liability insurance issued by them, respectively, to Kinzel Parrott and George E. Home.

The petition alleged that on October 11, 1961, Kinzel Parrott executed a purchase order with Home, a franchised dealer for the International Harvester Company, for the purchase of an International Harvester truck chassis and certain accessory equipment, including a "10 Yd. Fontaine Dump Body w/Cab Guard Spreader Gate — 40,000# Hoist," as set forth in the purchase order which was attached to the petition as Exhibit 3, the sale being subject to the terms and conditions specified in said purchase order which included a cash payment of $1,200 upon delivery and the trade-in of a 1959 Chevrolet pickup truck.

The petition further alleged that to facilitate the delivery of the truck chassis from the International Harvester Truck Sales Processing Center at Ft. Wayne, Indiana, to the Home Equipment Company, in Rome, Georgia, it was agreed by Home and Kinzel Parrott that Wiley Parrott would go to Ft. Wayne, Indiana, pick up the truck chassis and deliver it to the Home Equipment Company. The truck was then to be delivered by Home to the Fontaine Equipment Company in Atlanta, Georgia, for the mounting of the dump body upon the truck chassis and delivery of the completed truck was then to be made by Home to Kinzel Parrott in Rome, Georgia, on October 18, 1961.

It was alleged that pursuant to the agreement of the parties, Wiley Parrott picked up said truck in Ft. Wayne, Indiana, under a letter of authorization from Home who had also provided Parrott with a dealer's license tag to be affixed to the truck; and that while en route from Ft. Wayne, Indiana to Rome, Georgia, and at a point on U.S. 27 approximately six miles south of Summerville, Georgia, said truck chassis collided with a Greyhound bus, the driver of said bus being killed as a result of the collision and several passengers on the bus being injured. The petition further alleged that the plaintiff insurer was notified by Kinzel Parrott to investigate said collision and to take such action respecting the disposition of certain claims being made by the injured parties against him as was proper under the terms and provisions of a policy of automobile liability insurance issued by it to Kinzel Parrott, being Policy No. 475-49-29, a copy of which was attached to the petition as an exhibit. The plaintiff insurer admitted in its petition that said policy afforded coverage to the defendants Kinzel Parrott and Wiley Parrott subject to the limitations of said policy and that petitioner had been notified of the various claims arising out of the collision and had been confronted with demands for settlement thereof by the various claimants.

The plaintiff insurer further alleged that at the time of said collision, the sale of the vehicle specified in the purchase order had not been consummated and that at said time and place the vehicle was still owned by the defendant Home and was thus covered by a policy of insurance issued by the defendant U.S. Fidelity Guaranty Company to Home; and that Wiley Parrott by virtue of the fact that he was driving said vehicle with the permission of Home was insured under the terms of that policy but that the defendant insurer had denied coverage to the defendants Kinzel Parrott and Wiley Parrott under said policy and had refused to make any contribution toward disposition of the various claims arising out of said collision.

The plaintiff insurer further alleged that under the terms of its policy if there were other insurance coverage afforded defendants Kinzel Parrott and Wiley Parrott or either of them, its liability for loss would be in the proportion that the applicable limit of coverage afforded under its policy bore to the aggregate limits of coverage afforded by the plaintiff's policy and such other policy or policies under which coverage was also afforded to either Kinzel Parrott or Wiley Parrott.

The petition alleged that under the foregoing facts an actual controversy existed between the parties and sought the following declaration of rights:

"(1) That coverage is afforded defendants Kinzel Parrott and Wiley Parrott by defendant Company under its policy, copy of which is attached hereto as Exhibit 2;

"(2) That ownership of the truck-chassis described in paragraph 13 of this petition was in defendant Home at the time and place of the collision described in paragraph 14 of this petition;

"(3) That at the time and place of the collision described in paragraph 14 of this petition, defendant Wiley Parrott was the agent of defendant Home, and was acting within the scope of the said agency."

Answers were filed by the various defendants and the case proceeded to trial in the Superior Court of Fulton County before the court without the intervention of a jury, and at the conclusion of the trial a judgment containing the following findings was entered:

1. That United States Fidelity Guaranty Company did provide coverage to Kinzel Parrott and Wiley Parrott under the terms of its policy.

2. That ownership of the truck chassis was in Home at the time and place of the collision.

3. That the truck chassis was being operated by Wiley Parrott with the permission of Home.

4. That Wiley Parrott was not the agent of Home and was not acting within the scope of any agency relationship with Home.

5. That pro rata coverage is afforded under both the Great American policy and the United States Fidelity Guaranty Company policy to pay all sums which Kinzel Parrott and Wiley Parrott shall become legally obligated to pay, and that each insurance company shall be liable under its policy according to the "other insurance" clause of each policy, to wit: that Great American is liable for one-fifth and United States Fidelity Guaranty Company is liable for four-fifths of each loss, claim or judgment.

This judgment was excepted to by the defendant George E. Home, Jr., and the defendant insurer, United States Fidelity Guaranty Company, upon the grounds: (1) that the evidence did not authorize the finding that at the time of the collision the truck chassis was an owned automobile under the terms of the policy of insurance issued by the defendant insurer to Home; and (2) that even if said vehicle were an owned automobile under the terms of the policy the trial court erred in its ruling that the coverage afforded by the policy of the defendant insurer should be pro rated with the coverage afforded by the policy of the plaintiff insurer under the "other insurance" clauses of the two policies.

JORDAN, Judge.

The first question presented is whether or not the trial court was authorized to find from the evidence submitted that the truck chassis was owned by the defendant Home at the time of the collision.

While the evidence is in substantial conflict on many issues surrounding the sales transaction, there is ample evidence in the record to support the finding of the trial court that the ownership of the truck was still in Home at the time of such collision and that said truck was an insured vehicle under the terms of the policy issued to Home by the defendant insurer. The vehicle described in the purchase order executed by Kinzel Parrott was not a truck chassis alone, but an equipped dump truck. The evidence is clear that the truck chassis was to be delivered to the dealer Home in Rome, Georgia, and then transported to Atlanta to be equipped with the dump body as specified in the purchase order, and then to be delivered by Home to Parrott after installation of all the equipment called for in the purchase order. The evidence showed that the $1,200 cash payment called for in the purchase order had neither been made nor demanded; that the 1959 Chevrolet pickup truck which was to be traded in as part of the down payment had not been turned over to the seller; and that the installment notes for the remainder of the purchase price had not been executed. The evidence further revealed that Home provided Wiley Parrott with a dealer's license tag to be affixed to the truck chassis before it was transported from Ft. Wayne, Indiana, to Rome, Georgia; and under the provisions of Code Ann. § 92-2903 such tag is to be used solely "for the purpose of demonstrating or transporting dealers' vehicles or trailers for sale."

Under the facts set forth above a finding was not demanded that the sale of the truck to Kinzel Parrott had been consummated or perfected at the time of the collision and the determination by the trial court, being supported by ample evidence, will not be disturbed.

It is further contended by the defendant insurer that even if the truck chassis was an owned automobile under the terms of its policy, it would not be liable on a pro rata basis with the plaintiff insurer, as determined by the trial court, for the reason that the policy of the plaintiff insurer provided primary coverage of the contemplated loss while its policy only provided secondary or excess insurance coverage. This contention is not predicated upon any restrictive language in the terms of the defendant insurer's policy which sought to constitute it secondary or excess insurance if there was other coverage, or upon any language in the policy of the plaintiff insurer which sought to make it primary insurance on the vehicle involved herein, but is based on the fact that the defendant insurer's policy was a blanket policy which provided general comprehensive coverage for all vehicles owned by Home, its insured, while the policy of the plaintiff insurer specifically covered the vehicle involved herein and no others.

While there are apparently no controlling Georgia cases on the issue raised by this contention, under the great weight of authority in this country, blanket policies of insurance pro rate with specific policies and thus constitute concurrent or other insurance within the meaning of a "pro rata" or "other insurance" clause. See Annotation, "Apportionment or contribution as between specific and blanket insurance policies," 169 ALR 387. As stated in 29A Am. Jur. 791, Insurance, § 1712: "This rule is based upon the theory that in order to constitute concurrent insurance, the policy, while it must be on the same property and on the same interest in the property, and while it must be against the same risks and in favor of the same party, need not necessarily cover the identical field covered by the other insurance policy but may cover only part thereof."

Both insurance companies involved in this controversy agreed in the respective policies to pay in behalf of the insured all sums within the applicable policy limits which the insured shall become legally obligated to pay because of bodily injury and property damage caused by accident and arising out of the ownership, use, or maintenance, of an automobile; and the "insured" under the terms of both policies included any person who was using the owned or described vehicle with the permission of the named insured. These policies thus insured the same property against the same risks and in favor of the same party (the permissive user of the vehicle), and hence said policies constituted concurrent insurance within the meaning of the "other insurance" or "pro rata" clause which was included within the terms of each policy. See, Annotation, "Apportionment of losses among automobile liability insurers under policies containing pro rata clauses," 21 ALR2d 611. Under the "other insurance" clauses which were the same under both policies of insurance, each insurer was obligated to pay the proportion of loss which the applicable limit of liability stated in the declarations of each policy bore to the total applicable limit of liability of all valid and collectible insurance which, as determined by the trial court under the facts of this case, would necessitate the payment of one-fifth of such loss by the plaintiff insurer and four-fifths of such loss by the defendant insurer.

The case of Hartford Steam Boiler Inspection Ins. Co. v. Cochran Oil Mill Ginnery Co., 26 Ga. App. 288 ( 105 S.E. 856), relied upon by the defendant insurer for its contention that it was liable only for secondary or excess insurance coverage, is inapplicable here for the reason that the insurance policies involved in that case contained provisions limiting liability to the excess over any specific insurance carried by the insured; and the court was there faced with the problem of construing policies of insurance which sought to make each insurer liable only for excess coverage. The policies of insurance involved in this case did not contain any applicable, restrictive language as to the coverage afforded other than the "other insurance" clause; and we have interpreted said policies in accordance with the general principles: "(1) that the pro rata clause ought to be so construed, in the absence of a policy provision to the contrary, as not to diminish the protection of the insured, and (2) that the rights of the insured against the insurers and the rights of the insurers amongst themselves must be determined not by adjustment of equities but by the provisions of the contracts made." (Emphasis supplied.) 29A Am. Jur. 791, Insurance, § 1713.

Judgment affirmed. Bell, P.J., and Eberhardt, J., concur.