Squires v. Textile Ins. Co.

108 S.E.2d 908 (1959)

250 N.C. 580

Nancy D. SQUIRES v. TEXTILE INSURANCE COMPANY.

No. 609.

Supreme Court of North Carolina.

June 12, 1959.

*910 Sapp & Sapp, by Armistead W. Sapp, Greensboro, for defendant Textile Insurance Co., appellant.

Jordan, Wright & Henson, Greensboro, for plaintiff, appellee.

HIGGINS, Justice.

The appellee has moved in this Court to dismiss the appeal for failure of the defendant to comply with the Rules of Practice in the Supreme Court for defective assignments of error, and failure to discuss the assignments in the brief. After careful examination of the record and the brief, we conclude the assignments and their treatment in the brief are sufficient to present for review (1) the propriety of the nonsuit, (2) the admission in evidence of the release agreement procured from Mrs. Hearn by the defendant, (3) the court's refusal to permit the defendant to introduce a garage policy issued by Nationwide Mutual to Massengill, and (4) the failure to *911 submit the issue of Sorahan's ownership of the Ford convertible involved in the accident.

The plaintiff introduced Policy No. 378. Admittedly it was in force on the date the plaintiff sustained her injury. She next introduced the judgment roll showing she had prosecuted successfully an action in the Superior Court and obtained a judgment against Sorahan, Southern Auto Parts, Inc., City Motors of Durham, Inc., and E. S. Massengill, T/A Durham Motor Sales. The issues and judgment in that case established that Louis W. Sorahan was the agent of the other defendants and was about their business at the time of the plaintiff's injury which resulted from Sorahan's negligence; and that the defendants were liable to this plaintiff for $17,500 damages. The plaintiff also introduced evidence that the judgment had not been paid.

Louis W. Sorahan testified for the plaintiff that at the time of the collision between his Ford convertible and the automobile this plaintiff was driving and in which Mrs. Hearn was riding as a guest passenger, he was acting as an employee of Southern Auto Parts, Inc., City Motors of Durham, Inc., and Massengill, T/A Durham Motor Sales, and was on a mission for them as their agent at the time of his collision with the plaintiff's automobile. This evidence was sufficient to make out a case for the jury and to repel the motion for nonsuit.

The first issue submitted to the jury might have been drawn with greater precision. However, in connection with the pleadings, the policy involved, the record evidence, and the charge of the court, enough appears to place the insured's agent Sorahan and the automobile he was using at the time of the injury within the coverage of the defendant's policy under the definition of "HazardsDivision 2," and under the general definition of "InsuredDivision III." Under "Division III," the policy says: "The unqualified word `insured' includes the named insured (Southern Auto Parts, Inc.) and also includes (1) any * * * employee (Sorahan) while acting within the scope of his duties as such, and (2) any person while using an automobile covered by this policy * * * provided the actual use of the automobile is by the named insured or with its permission." Then follows: "This policy does not apply * * * (b) to any partner, employee, dirctor, stockholder, or additional insured with respect to an automobile owned by him."

Does (b) mean the insurer will not pay to a partner, employee, director, stockholder, or additional insured for injury if caused by his own automobile, or does it mean the insured will not indemnify third persons for injury if inflicted by an automobile owned by a partner, employee, etc.?

The defendant contends (b) withdraws from coverage altogether damages to third persons by an employee while using his own automobile. We are not certain what (b) means. If it means what the defendant says it does, it is in conflict with the coverage under "Definition of Hazards," and under the general provisions of "No. IIIDefinition of Insured." If not in conflict, it is ambiguous. The trial court interpreted (b) as in conflict with the general provisions and refused to submit the issue as to Sorahan's ownership of the Ford convertible. In this we think the trial court was correct because of the conflicting or ambiguous provisions. The determination whether the terms of a policy are conflicting or ambiguous is one of law for the court. The only interpretation of a provision similar to (b) we have been able to find is a decision by an intermediate appellate court of Alabama in the case of Employers Insurance Co. of Alabama v. Bedford, 93 So. 2d 166. We are not prepared to follow the interpretation of (b) made by the court in that case. In policies of insurance, if ambiguous, or if they contain conflicting provisions, the ambiguities and conflicts must be resolved against the insurer. Johnson v. New Amsterdam Casualty Co., 234 N. *912 C. 25, 65 S.E.2d 347, 29 A.L.R.2d 507; Gould Morris Electric Co. v. Atlantic Fire Ins. Co., 229 N.C. 518, 50 S.E.2d 295; and cases cited.

The policy as interpreted by the court and the jury's answer to the first issue were sufficient to support the plaintiff's judgment. The issue of waiver, though found for the plaintiff, may be treated as surplusage. The admission of evidence and the charge of the court on that issue, even if erroneous, which we do not concede, were nonprejudicial. Johnson v. New Amsterdam Casualty Co., supra.

The defendant had an opportunity to defend in the plaintiff's action against the defendant's named insured. The judgment is, therefore, conclusive as to the insurer on the question of agency and damage. The only defense available to the defendant is that its policy does not cover the insured's liability. Carolina Transportation & Distributing Co. v. American Alliance Ins. Co., 214 N.C. 596, 200 S.E. 411; Hall v. Harleysville Mutual Casualty Co., 233 N.C. 339, 64 S.E.2d 160.

The court properly excluded evidence of a garage policy issued to Massengill by Nationwide Mutual. That policy involved parties who are strangers to this action. Sprinkle v. Ponder, 233 N.C. 312, 64 S.E.2d 171; Robbins v. Alexander, 219 N.C. 475, 14 S.E.2d 425. The liability of the original parties against whom the plaintiff obtained her judgment are joint and several. The plaintiff could proceed against one, and consequently against the insurance carrier for one. The agreement to prorate in the court's judgment is not prejudicial to the defendant. Commercial Standard Ins. Co. v. American Employers Ins. Co., 6 Cir., 209 F.2d 60.

The charge on the controlling issue seems to be free from objection. Careful review discloses

No error.