Title: Wallace Co. v. State FM Auto. Ins. Co.

State: oregon

Issuer: Oregon Supreme Court

Document:

Reversed March 2, 1960.
*521 Robert A. Leedy, Portland, argued the cause for appellant. On the brief were Barzee, Leedy & Erwin.
Richard T. Clarke, Portland, argued the cause for respondent. On the brief were McGill & Clarke.
Before McALLISTER, Chief Justice, and WARNER, PERRY and DUNCAN, Justices.
REVERSED.
PERRY, J.
This is an action at law to recover upon a policy of automobile insurance issued by the defendant. The jury returned a verdict for the defendant and the plaintiff appeals.
There is no real dispute in the facts, nor is the question of the right of this plaintiff to maintain this action against the defendant in dispute.
The facts disclose that defendant issued to Dr. Lloyd P. Pratt, a resident of Roseburg, its contract of insurance, insuring Dr. Pratt's Buick automobile, and that this policy was at all times (so far as this matter is concerned) in full force and effect. The Buick automobile *522 had been recently purchased from plaintiff, a Portland automobile dealer. Shortly after the purchase the automobile developed mechanical difficulties and it was necessary for the automobile to be out of service and in plaintiff's repair shop while being made to operate properly. There is some dispute in the evidence as to whether Dr. Pratt was told that the time contemplated to repair his Buick automobile would be three to four days or at least two weeks, but whether it was to be four days or two weeks is, in our opinion, entirely immaterial to the issue presented.
To accommodate Dr. Pratt while his Buick automobile was unavailable to him, the plaintiff loaned to Dr. Pratt one of its used automobiles which he was privileged to make use of in the same manner as he would his own. When the doctor's automobile was repaired it was returned to him in Roseburg, and a day or two later the automobile which had been loaned by the plaintiff to Dr. Pratt was extensively damaged by collision and upset while Mrs. Pratt was attempting to return the borrowed automobile to the plaintiff in Portland.
The policy issued by the defendant provided generally a loss coverage for collision and upset to the Buick automobile owned by Dr. Pratt and further provided as follows:
The error the plaintiff complains of was the giving of the following instruction:
Whether or not this was error depends upon the construction of the exclusion clause in paragraph (1) of section (c) set out above.
1. To properly construe this portion of the policy it is first necessary to determine what the intention of the parties was under the contract of insurance. In doing so, we must follow the general rule of law, that we give effect to the parties' intention so far as can be discovered from the language of the policy, and if the policy is reasonably susceptible of two constructions, it should be construed most favorably to the policy holder. Borglund v. World Ins. Co., 211 Or 175, 315 P2d 158; Farmers Mut. Ins. Co. v. Un. Pac. Ins., 206 Or 298, 292 P2d 492; Rossier v. Union Automobile Ins. Co., 134 Or 211, 297 P 498.
As stated in Lumbermens Mut. Casualty Co. v. Pulsifer, 41 FS 249, 251,
And, as therein pointed out, with reference to an exclusion clause the court states:
Since the general purpose of the policy was to extend the collision and upset coverage to passenger cars which the insured or his wife might perhaps on infrequent occasions obtain permission of various owners to use and to eliminate the risk to the insurer of the use of automobiles usually at hand instead of his own, it seems obvious that the clause implies a restriction upon the use of automobiles over which the insured has a rather permanent right of control.
2. We are of the opinion, therefore, that the phrase "furnished for regular use" as used in context does not imply the manner of use, that is, putting the automobile to the same uses to which an insured would use his own automobile, but implies a right to the regular use of the automobile in the sense that there is an expressed or implied understanding with the owner of an automobile that the insured could have the use of the particular automobile or perhaps any automobile of the other at such times as he desired, if available.
The term "furnished for regular use" does not embody the term "for temporary use," but describes the antithesis thereof. It, therefore, expresses no thought of excluding protection in those situations where the use is but for a single occasion or single purpose.
3. The fault in the instruction is apparent in the trial court's definition of "furnished for regular use," *527 as meaning a vehicle that has been furnished to be "used in the same or similar manner and for the same and similar purposes and at the usual time as the car that is actually owned by the party using the same." This wording gives emphasis to the manner of use and not to the understanding of the assured as to the temporary or more or less permanent use of the automobile when available, and the jury must have been misled as to the law applicable.
For this reason this cause must be reversed.