No. 12353 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1973 

TRANSkMERICA INSURANCE COMPANY 

a corporation, 

Plaintiff and Respondent, 

GLACIER GENERAL ASSURANCE COMPANY et al., 

Defendants and Appellants. 

Appeal from: District Court of the Fourth Judicial District, 

Honorable Jack L. Green, Judge presiding. 

Counsel of Record : 

For Appellants : 

Mulroney , Delaney and Dalby , Missoula , Montana 

Stephen H. Dalby argued, Missoula, Montana 

For Respondent : 

Worden, Thane, Haines and Williams, Missoula, Montana 

Shelton C. Williams argued, Missoula, Montana 

Submitted : December 3, 1973 

Decided: 34 1974 

Filed : 3B744 "?74 
Mr. Justice Wesley Castles delivered the Opinion of the Court. 

This is an appeal from a judgment for plaintiff entered 

by the district court, Missoula County, Honorable Jack L. Green 

presiding without a jury. The action was to establish liability 

for claims jointly paid by plaintiff Transamerica Insurance Company 

and defendant Glacier General Assurance Company pending determination of their respective liabilities. 

This action arose out of an accident which occurred on 

August 6, 1968, when a truck owned by Bob & Ray's Car and Truck 

Sales rented to Tom Wickes and driven by Robert Barbe, an employee 

of Wickes, collided with another vehicle causing two deaths. An 

action was commenced against Wickes, Barbe, and Bob & Ray's as a 

result of the accident. Transamerica, as insurance carrier for 

Wickes and Barbe, and Glacier, as insurance carrier for Bob & ~ay's, 

thought it mutually desirable to compromise this action for 

$50,000 with each insurance carrier contributing $25,000. 

A written reservation of rights was entered into under 

which each insurance company reserved the right to bring an action 

to determine its respective rights as to the other carrier, subsequent to settlement. This action is founded on that reservation 

of rights. 

The record indicates Robert Peterson was general agent for 

Glacier and as such was authorized to write auto casualty and 

liability insurance. This authority extended to accepting applications and proposals for insurance on behalf of Glacier and to 

binding coverage on behalf of Glacier. Peterson was also actively 

engaged in the business of renting trucks under the name of Bob & 

Ray's Car and Truck Sales. The insurance agency and the vehicle 

rental business were conducted out of the same office and were a 

part of the same corporate entity. Bob & Ray's entered into an 

agreement whereby Glacier would insure the vehicles rented by them, 

with Peterson writing the insurance. 
Under the terms of this policy a copy of the rental agreement and a premium of $1.50 per day for each day the vehicle was 

rented was to be forwarded to Glacier. This policy extended 

coverage to the named insured, Bob & ~ay's, and to anyone 

using the insured vehicle with the permission of the named insured. 

This provision goes on to expressly exclude coverage of anyone 

other than the named insured with respect to any accident arising 

I I out of the operation of an automobile sales agency, repair shop, 

service station, storage garage or public parking place". 

The rental agreement signed by Wickes and which the Glacier 

policy required to be forwarded to it with the remittance provided 

in part: 

"INSURANCE COVERAGE 

"Renter is liable for the first $100.00 

Collision damage only. Any & all liability 

will be carried and covered by Bob & Ray's Car 

& Truck Sales unless otherwise stated below. 

I I There is no insurance provided on cargo by 

Bob & ~ay's Car & Truck Sales. This must be 

carried by Renter if desired." 

At the time Wickes rented the truck he asked if it was covered 

by insurance and Peterson replied that it was. 

While Wickes had long been involved in the garage and 

auto storage business, on the date of the accident he no longer 

had any cars in storage; had disposed of his entire stock in 

trade; had had his business telephone disconnected; had discharged 

all his regular employees; and was no longer providing or offering 

to provide any services. He did have two employees who were engaged 

solely in cleaning up the building preparatory to Wickes' scheduled 

final vacation of the premises on August 7, 1968. At the time 

of the accident the truck was being used to transport some machinery, 

which had been used in the garage business and for which Wickes 

had no further use, to ~ickes' son in Polson. 
On the date of the accident Transamerica had a blanket 

liability policy containing a garage liability clause issued to 

Wickes which by its terms extended coverage to his employee Barbe. 

The district court granted defendant's motion to dismiss 

Wickes and Barbe as plaintiffs on the ground they were not real 

parties in interest. The district court subsequently entered 

findinsof fact that: Peterson and Bob & Ray's had contracted 

with Wickes to provide all liability insurance on the truck; the 

contract was binding upon Glacier; the contract inures also to 

the advantage of ~ickes' employee Barbe and to Transamerica; the 

contract was made by Peterson acting within the scope of his 

duties as an agent of Glacier and Glacier had knowledge of the 

language of the agreement; and, Wickes was not on the date of the 

accident engaged in the garage business. The court also found 

Glacier was obligated to provide a defense for and to indemnify 

Wickes and Barbe in connection with the accident and owes to 

Transamerica $25,000, together with interest amounting to $4,620. 

Defendant Glacier raises essentially four issues on appeal: 

I) That Glacier was under no contractual obligation to 

indemnify Wickes and Barbe. 

2) That if it should be found that Glacier does have 

some obligation to indemnify, this obligation is limited to contributing a pro rata share of the total liability. 

3) That Transamerica has no claimant's status. 

4) That the district court's findings of fact are clearly 

erroneous. 

An additional issue in which Glacier claimed that its 

coverage was, if anything, "excess" while ~ransamerica's was 

11 primary" was formally abandoned during oral argument. 

Glacier's contention that it was under no contractual 

obligation to indemnify Wickes and Barbe has two bases. First, 

Glacier claims that no contract was entered into and second, that 

if such a contract was entered into this accident is excluded by 

a policy term excluding coverage of accidents arising out of a 

garage business. 
to Glacier's claim that it was under 

tion to provide insurance coverage to Wickes and Barbe, plaintiff 

Transamerica urges that the language of the rental agreement used 

by Glacier's agent Peterson with the knowledge of Glacier, and 

~eterson's representations at the time the truck was rented are 

sufficient to create a contract of insurance binding on defendant 

Glacier. We agree with the district court's conclusion that a 

binding contract was entered into. 

It is undisputed that Peterson was a general agent of Glacier. 

The rule as to the power of a general agent to bind the insurance 

company by whom he is employed is clearly stated in 43 Am Jur 2d, 

Insurance,,§ 204, which states: 

"No general rule can be satisfactorily evolved 

which will fit all cases other than that an insurance contract is binding upon the insurer if 

entered into by an agent acting in such respect 

within his express, implied, or apparent authority * * Jx*" 

This rule has long been the law of Montana. Baker v. Union 

Assurance Society of London, Ltd., 81 Mont. 281, 264 P. 132. 

Peterson combined his activities as an insurance agent 

for Glacier with the vehicle rental business known as Bob & Ray's. 

The insurance agency was operated essentially as an adjunct to 

the rental and sales busi.ness with almost all of ~eterson's 

activities as an insurance agent arising out of transactions of 

Bob & ~ay's Car and Truck Sales. 

The operation of the truck rental business of Bob & ~ay's 

was covered by a policy issued by defendant Glacier. The terms 

of this policy required the use of a rental form which was to be 

forwarded to Glacier. This form provided in pertinent part "Any 

& all liability will be carried & covered by Bob & ~ay's * * *.'I 

While as a whole this wording appears to be unique, the word 

I I covered" has been considered in this context by a number of 

courts. 

In Mowles v. Boston Ins. Co., 226 Mass. 426, 115 N.E. 666, 

the word "cover" when used in the context of insurance was held to 

-5- 
mean "insurance for a reasonable time under all the circumstances". 

In Michigan Idaho Lumber Co. v. Northern Fire & Marine Ins. Co., 

35 N.D. 244, 160 N.W. 130 and Hurd v. Maine Mut. Fire Ins. Co., 

139 Maine 103, 27 A.2d 918, a promise by a general agent to hold 

a risk "covered" was held to obligate the agent's insurance company principal to protect against loss from the risk. 

In the Montana case Austin v. New Brunswick Fire Ins. Co., 

111 Mont. 192, 108 P.2d 1036, a statement by an insurance agent 

that an individual had "full coverage" was held to create an 

insurance contract binding on the insurance company. The effect 

of a promise that insurance would be "carried & covered" is the 

same as a promise to provide "full coverage", to "cover" a risk 

or to hold a risk "covered". The clause clearly states the risk 

to be insured against by specifying "Any 6: all liability". 

Accordingly, Peterson by the use of this term in the rental 

agreement with the knowledge of Glacier, entered into a contract to 

insure against any liability that might result from the operation 

of the rented truck. As with any insurance agreement entered into 

by a general agent acting within the scope of his apparent or 

actual authority, this contract entered into by Peterson was binding 

on his principal, Glacier. This conclusion is reinforced by the 

district court's finding that defendant Glacier had actual knowledge 

of the terms of the rental agreement. 

Since the foregoing indicates that Glacier was obligated to 

insure Wickes and Barbe, we note the uncontradicted testimony of 

Wickes is that at the time he rented the truck he inquired specifically 

as to insurance and Peterson assured him that insurance coverage 

was provided. This assurance would also be sufficient to justify 

a finding that defendant Glacier was obligated to provide insurance. 

Austin, supra. 

Defendant Glacier also claims that even if an insurance 

contract was entered into, its policy exclusion relating to acciI I dents which arise in connection with the operation of an automobile 
sales agency, repair shop, service station, storage garage or 

public parking place" eliminates its liability in this situation. 

While there was some dispute as to whether or not Wickes was 

engaged in the garage business at the time of the accident, the 

district court found Wickes was not at that time engaged in the 

garage business. This finding is supported by the testimony of 

Wickes and Barbe that on the date in question there were no longer 

any cars in storage, the entire stock in trade had been disposed 

of, and the garage business telephone had been disconnected, all 

of the regular employees had been discharged, and services were 

no longer being provided. This is substantial credible evidence 

in support of the district court's finding that Wickes was no 

longer in the garage business. As stated in Hellickson v. Barrett 

Mobile Home Transport, Inc . , Mont . , 507 P.2d 523, 30 St. 

Rep. 289, 291: 

"'Our duty in reviewing findings of fact in a 

civil action tried by the district court without 

a jury is confined to determining whether there 

is substantial credible evidence to support them. f 11 

Accordingly, since the district court found and that 

finding is supported by substantial credible evidence that Wickes 

was no longer engaged in a garage business, we hold ~lacier's 

coverage is not excluded by the policy provision excluding coverage of garage business related accidents. 

Glacier's second issue on appeal is the contention that 

its liability, if any, is limited to the makifig of a pro rata 

contribution to settlement. To supports its position Glacier 

relies on Glacier General Assurance Co. v. State Farm Mutual Auto. 

Ins. Co., 150 Mont. 452, 460, 436 P.2d 533, where this Court 

stated: 

"Where, in the absence of the other policy there 

would be no problem as to the liability of either 

of one of the companies and the 'other insurance' 

clauses are the same, the liability is more rationally prorated than arbitrarily laid at the feet of 

one or the other. 11 

The above quoted case involved two policies which differed 

only in that one policy covered the driver by name and the other 
covered him only as a driver. In the instant case, the differences are far greater. The rental agreement's insurance clause 

which created the contract of insurance provided specifically 

that "Any & all liability will be carried & covered". Further, 

the Glacier policy was entered into for the purpose of providing 

insurance coverage on the specific risks involved in the use of 

the truck involved in the accident. These differences provide a 

rational basis on which to assign defendant Glacier the duty of 

providing primary insurance coverage. We hold that a contract to 

provide "Any & all" liability coverage with regard to a specific 

risk creates an obligation to provide primary insurance of the 

risk. Therefore, Glacier was obligated to provide primary 

coverage and is not entitled to contribution of a pro rata share 

by the secondary insurer, Transamerica. 

The third issued raised by Glacier is an assertion that 

plaintiff Transamerica has no status as a claimant in this action. 

This claim is without merit. It is well established that when 

an insurer pays all or a portion of a loss on behalf of an insured, 

he is subrogated pro tanto to whatever rights the insured possessed. 

American Equitable Assurance Co. v. Newman, 132 Mont. 63, 313 P.2d 

1023; Caledonia Insurance Co. v. Northern Pacific Railway Co., 32 

Mont. 46, 79 P. 544. Transamerica by contributing to the compromise 

settlement agreed to by the insurers made a payment on behalf of 

the insured. Hence, Transamerica has become subrogated to the 

rights of Wickes and Barbe. As the discussion of the preceding 

issues indicates, Glacier was under an obligation to provide insurance coverage for Wickes and Barbe. Had Wickes and Barbe contributed instead of Transamerica, their right to assert a claim against 

Glacier is unquestionable. Plaintiff Transamerica being subrogated 

to that right, it is obvious that it does have a status to press 

a claim against defendant Glacier. 

~lacier's final issues is the claim that the district court's 

findings of fact are clearly erroneous. We have reviewed the entire 
record and find the district court's findings amply supported 

by substantial credible evidence. As stated in Hellickson, our 

review is limited to determining whether there is substantial 

credible evidence to support the district court's findings. If 

there is, as in this case, then the determination of the district 

court will not be disturbed. 

The decision of the district court is affirmed. 

/ /'chief Justice 

,' stices.