Case Name: FARMERS INSURANCE EXCHANGE, Appellant (Garnishee below), v. FIDELITY & CASUALTY COMPANY OF NEW YORK, Appellee (Garnishee below), Marietta J. Arnold, Administratrix of the Estate of Cecil S. Arnold, Deceased, (Plaintiff below), L. A. Crofts, Administrator of the Estate of Glen W. Chapman, Deceased, (Defendant below)
Court: Supreme Court of Wyoming
Jurisdiction: Wyoming
Decision Date: 1962-09-27
Citations: 374 P.2d 754
Docket Number: No. 3045
Parties: FARMERS INSURANCE EXCHANGE, Appellant (Garnishee below), v. FIDELITY & CASUALTY COMPANY OF NEW YORK, Appellee (Garnishee below), Marietta J. Arnold, Administratrix of the Estate of Cecil S. Arnold, Deceased, (Plaintiff below), L. A. Crofts, Administrator of the Estate of Glen W. Chapman, Deceased, (Defendant below).
Judges: Before PARKER, HARNSBERGER, and McINTYRE, JJ.
Reporter: Pacific Reporter 2d
Volume: 374
Pages: 754–766

Head Matter:
FARMERS INSURANCE EXCHANGE, Appellant (Garnishee below), v. FIDELITY & CASUALTY COMPANY OF NEW YORK, Appellee (Garnishee below), Marietta J. Arnold, Administratrix of the Estate of Cecil S. Arnold, Deceased, (Plaintiff below), L. A. Crofts, Administrator of the Estate of Glen W. Chapman, Deceased, (Defendant below).
No. 3045.
Supreme Court of Wyoming.
Sept. 27, 1962.
Edward E. Murane, of Murane, Bostwick & McDaniel, Casper, for appellant.
W. J. Wehrli, Casper, for appellee.
Before PARKER, HARNSBERGER, and McINTYRE, JJ.

Opinion:
Mr. Justice McINTYRE
delivered the opinion of the court.
The problem before us in this case is to determine the extent of insurance coverage on the part of two insurance companies and to decide whether a judgment previously obtained should be paid in its entirety by Farmers Insurance Exchange, appellant, or whether a pro rata share of such judgment should be paid by Fidelity & Casualty Company, appellee.
The judgment involved is in the amount of $31,884.85. It was obtained by the ad-ministratrix of the estate of Cecil S. Arnold, who was killed in an automobile accident with Glen W. Chapman. Chapman was also killed in the accident.
At the time of the accident Chapman was employed as a salesman by Platte Valley Paint & Glass Co., Inc. His employer was leasing a Mercury automobile from Meyers Lease & Rent Company for the use of Chapman. The Mercury had become in need of repairs, and the rental company leased Chapman's company a Ford automobile in place of the Mercury, while the Mercury was being repaired. This Ford was being driven by Chapman when the accident occurred.
Upon execution, both insurance companies were garnisheed. The district court found that Farmers-company had primary coverage and that it should pay the entire judgment. Contending that its coverage is on a par with the coverage of Fidelity-company and that Fidelity should pay a pro rata share, or one-third of the judgment, Farmers has appealed.
The policies of both companies are before us and there is no material dispute on the facts. Our decision therefore involves a construction of these respective policies and nothing more.
Both policies were issued to the employer, Platte Valley Paint & Glass Co., Inc. Farmers insured the Mercury mentioned above; Fidelity insured four automobiles owned by Platte Valley and hired automobiles, "if any." There was a premium charge for hired automobiles. Each insurer accepts the fact that Chapman was using the Ford with proper permission, and that he came within the definition of "insured" as defined in its policy.
Farmers' Policy
The Farmers policy describes a substitute automobile thus:
"A 'substitute automobile' is an automobile which is temporarily used for the described automobile while such automobile is withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction."
With respect to other insurance, the Farmers policy specifies in item 17 of conditions that under certain coverages, including bodily injury liability and property damage coverages, Farmers shall not be liable for a greater proportion of any loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of all collectible insurance against such loss. Then follows this pertinent provision in the same item:
"With respect to a substitute or non-owned automobile, Coverages A, B, E and F shall be excess insurance over any other collectible insurance of any kind available to the insured."
Coverage A in the policy is bodily injury liability and coverage B is property damage. Coverages E and F are not involved in this case.
It should be noted at this point that the last-quoted provision applies both to a substitute and nonowned automobile. Fidelity takes the position that the Ford was non-owned and not a substitute; that a certain endorsement (115-A) makes it the same as if it were owned; that since there is no substitute and since the nonowned vehicle is to be considered as if it were owned, then this provision is vitiated and made to have no effect.
Fidelity's Policy
Regarding the pertinent policy provisions of the Fidelity policy, it is specified that the word "insured" includes, under coverages A and B (bodily injury liability and property damage) any person while using an owned automobile or a hired automobile, provided the actual use is by the named insured or with his permission. Under this provision Fidelity recognizes and does not deny that Chapman was covered while driving the Ford involved in the accident, except that it claims this insurance is excess insurance.
As to other insurance, the Fidelity policy provides in item 14 of conditions that if the insured has other insurance against a loss covered by its policy, the company shall not be liable for a greater proportion of such loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss. Then follows this proviso:
" provided, however, the insurance under this policy with respect to loss arising out of the maintenance or use of any hired automobile insured on a cost of hire basis or the use of any non-owned automobile shall be excess insurance over any other valid and collectible insurance."
There is no dispute on either side of the fact that the accident-involved vehicle was hired and that it was insured under Fidelity's policy on a cost of hire basis.
Farmers' Liability
The Farmers policy shows on its face that it covers the Mercury referred to above as the "described automobile." It is stipulated in the policy that the "described automobile" means the automobile described in the policy and includes a substitute automobile. Hence, the policy covered the Ford by reason of the fact that it was a substitute automobile and the described automobile includes a substitute automobile.
However, according to item 17 of conditions, which is set out above, it is specified in language that is unambiguous that, with respect to a substitute automobile, coverages A, B, E and F shall be "excess insurance" over any other collectible insurance of any kind available to the insured. As already indicated, we are concerned only with coverages A and B.
Thus, Farmers, by its own policy, has limited its liability as to bodily injury liability and property damage, on a substitute automobile, to excess insurance. We could not if we would increase that liability or give it a different status.
Fidelity's Liability
It would appear that there is a certain uniformity in insurance policies. While different forms are used and the language varies, it seems that provisions, as far as effect is concerned, end up being quite standard. Therefore it is not surprising to find that the two policies in this case are for all practical purposes identical in their coverages, definitions, exclusions, conditions and general provisions. They do differ of course in the amounts of insurance provided.
Instead of the Ford being covered under the Fidelity policy as a substitute automobile, it is covered as a hired automobile. However, the liability on a hired automobile insured on a cost of hire basis is also limited to excess insurance. According to the proviso set out above from item 14, it is specified in unambiguous language that the insurance under this policy with respect to loss arising out of the use of any hired automobile insured on a cost of hire basis shall be "excess insurance" over any other valid and collectible insurance.
The first part of item 14 in the Fidelity policy, like the first part of item 17 in the Farmers policy, provides generally that the company shall not in any case be liable for a greater proportion of any loss than its limit of liability bears to all collectible insurance.
Points in Dispute
Apparently the trial court found that the Farmers' policy constituted the primary coverage because it was written pursuant to the lease agreement which covered the Mercury automobile. According to that agreement, Meyers Lease & Rent Company agreed to provide certain insurance on the Mercury. In fulfillment of this agreement it ordered the Farmers policy, having the insurance written in the name of Platte Valley. It is argued that this shows an intent to have the Farmers policy cover "vehicles" owned by the rental company and "non-owned" by Platte Valley, the Ford being such a vehicle.
Of course, the original lease agreement did not express any intention that the Ford was to be insured. It provided merely that insurance was to be provided by Meyers Lease on the Mercury. Moreover, the lease agreement between Meyers Lease and Platte Valley was in no way binding upon Farmers. We can look only to the applicable insurance policy to find what insurance Farmers afforded. We cannot assume that it intended to provide coverages not expressed in its policy.
In an action involving the respective liability of two automobile liability insurers, the question is to be determined from a construction of the language employed by the insurers in their respective policies. Continental Casualty Company v. American Fidelity & Casualty Company, 7 Cir., 275 F.2d 381, 384; Woodrich Construction Co. v. Indemnity Insurance Company of North America, 252 Minn. 86, 89 N.W.2d 412, 420-421. In the latter of these cases, it was added that the decision must not rest upon any so-called primary-tortfeasor doctrine or upon "any other arbitrary rule or circumstance."
In the following cases courts have refused to recognize a primary liability on the part of an insurer, where it was claimed that its policy had been written for a purpose indicating an intention to assume primary liability:
In Reetz v. Werch, 8 Wis.2d 388, 98 N.W.2d 924, 927, where it was sought to place primary liability on the insurer which covered "hired and non-owned" automobiles, while the other insurer covered "described automobiles" ;
In Citizens Casualty Company of New York v. Allied Mutual Insurance Company, 217 Md. 494, 144 A.2d 73, 77-78, and in Celina Mutual Casualty Co. of Ohio v. Citizens Casualty Co. of New York, 194 Md. 236, 71 A.2d 20, 22-24, 21 A.L.R.2d 605, where it was sought in each case to place primary liability on a policy which had been obtained to comply with the terms of a financial responsibility law, and where the court in the Celina case said "each [insurer] must be held bound by what it said [in its policy]";
And in Employers Liability Assur. Corp. of London, England, v. Pacific Employers Ins. Co., 102 Cal.App.2d 188, 227 P.2d 53, 55-57, where it was sought to place primary liability on the policy which covered owned cars, loaned cars and nonowned cars when driven by an employee of the Salvation Army, while the other policy excluded in its coverage automobiles owned or hired by the Salvation Army.
In the case at bar, we have already called attention to the fact that actually the Fidelity policy and not the Farmers policy specifically covered "hired automobiles," and provisions were made in its policy for premium charges on hired automobiles. The Ford was certainly a hired automobile.
It must be kept in mind that the insured, Platte Valley, did not own the Mercury which it was having insured by Farmers. In the absence of an apparent insurable interest, endorsement 115-A was attached which made the insurance provided by Farmers apply to the same extent as if Platte Valley had owned the Mercury. The net result was that the Mercury was insured for Platte Valley the same as if owned by it.
The pertinent provisions of 115-A are these:
"It is agreed that such insurance as is afforded by this policy shall apply to the named insured and spouse to the same extent as if either were the owner of the described automobile, while it is registered in the name of Meyers Lease and Rent Company, Scottsbluff, Nebraska and is in the custody of the named insured, or is being used by others with the permission of the named insured.
* ⅜ ⅝ ifC ⅜ ⅜
"It is further agreed that this policy shall not apply to any accident which occurs after the named insured has relinquished custodianship or bailment of the described automobile."
If Platte Valley had in fact owned the Mercury which we are talking about and had insured it with Farmers, no doubt Farmers would have furnished, as added coverage, protection on a substitute vehicle, such as the Ford which we are also talking about. In effect it would have said however, this added coverage on the substitute-vehicle will be secondary insurance, with excess liability only.
That is exactly what happens when I insure my own automobile. The insurance company carries primary liability on it. However, when I take that vehicle to a garage for repairs and drive away a substitute for the period of repairing, the insurance company's liability as to the substitute would be secondary, or only for the excess over other collectible insurance. We find Farmers' insurance policy in the case before us, with endorsement 115-A attached, accomplishing the same thing.
This endorsement, in the policy of Farmers, is limited to "such insurance as is afforded." Just as excess insurance only would be afforded for a substitute, if my own automobile is insured, so also excess insurance only was "afforded" when Platte Valley insured a Mercury and used a Ford as a substitute.
In making the argument that the Ford in this case is covered by Farmers as a non-owned automobile and not as a substitute automobile, Fidelity overlooks the fact that, if its theory were correct and carried to a logical conclusion, it would itself be paying the entire judgment with no help from Farmers. We have already pointed out that in the Farmers policy the "described automobile" is made to include a substitute automobile. The adverse is true of a non-owned automobile. It is not included in the term "described automobile."
If we read 115-A with this thought in mind, we find in the last paragraph a clear provision to the effect that the policy shall not apply to any accident which occurs after the named insured (Platte Valley) has relinquished custodianship or bailment of the "described automobile." In that connection, it is undisputed in the evidence that the described automobile (Mercury) had been turned back to the owner, Meyers Lease, for repairs, and a new lease had been executed covering the Ford.
Thus, if the term "described automobile" in the last paragraph of the endorsement is thought of as including the Ford as a substitute, then the policy applies. But, if the Ford is thought of as a nonowned automobile so that there would no longer be a described automobile or substitute in the custody of the named insured (Platte Valley), then the policy would no longer apply and there would be no insurance at all as far as Farmers is concerned.
However, even stronger than our logic, are the words of the policy itself in settling once and for all the question as to whether the accident-involved Ford was a substitute automobile or nonowned automobile. In the definitions portion of Farmers' policy is a definition reading:
"The 'described automobile' means the automobile described in this policy and includes a substitute automobile and/or a newly acquired automobile."
Immediately following this definition are the definitions for "substitute automobile" and "newly acquired automobile." Then in the next succeeding paragraph is this definition :
"A 'non-owned automobile' is any other automobile except one owned by or furnished for the regular use of the named insured (Emphasis supplied.)
From its definition then, it will be seen that a nonowned automobile must first satisfy the requirement of being "any other automobile" and not a described automobile, a substitute automobile or a newly acquired automobile. In the next place, a nonowned automobile must not be one that is "furnished for the regular use of the named insured." The Ford was surely so furnished.
In the early part of this opinion we quoted the definition of a "substitute automobile," which was to the effect that it is an automobile which is temporarily used for the described automobile while such automobile is withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction. No description could more perfectly fit the Ford in this case than that description. We could not if we would indulge in a definition of our own for a substitute automobile. From the evidence adduced, the trial court specifically found that the Ford was being used by Chapman as a "substitute" for the Mercury. Its findings repeated again: "That said Ford was temporarily used by Chapman while the Mercury was being repaired by the owner."
It is true that Farmers' policy was -issued prior to the issuance of the Fidelity policy, and there is some suggestion that this might give it primary responsibility. We consider it immaterial which policy was written first. The question as to which of two insurers is liable in a particular case is to be ascertained from a construction of the language employed by the respective insurers, and not by which of -the insurers •first assumed the risk. McFarland v. Chicago Exp., 7 Cir., 200 F.2d 5, 7; Oregon Auto. Ins. Co. v. United States Fidelity & Guaranty Co., 9 Cir., 195 F.2d 958, 960. See also Continental Casualty Company v. Buckeye Union Casualty Company, Ohio Com.Pl., 143 N.E.2d 169, 180.
Indeed, if the rule were otherwise, there -would not be such a great number of cases holding in certain instances that because the excess insurance clauses of different in- - -surers are mutually repugnant, the liability must be prorated. In almost all of those cases, liability could be resolved quickly and easily on the basis of policy dates, if that were the law, but it is not.
The appellee, Fidelity-company, insists the Farmers Exchange is in some way estopped, or at least adversely bound, by a statement in a letter written by its counsel to Fidelity saying that Farmers Exchange had undertaken the defense of its insured and that primary liability was carried by Farmers "on the vehicle involved in this accident." In the same letter, the writer explained that it was not known just what liability is involved insofar as your company's assured [Fidelity's assured] is concerned. Counsel for appellant, as author of the letter further explained in argument that he had not yet seen the Fidelity policy when the letter was written.
Additionally, it is clear from the policies that Farmers actually did carry the only collision coverage insurance on the vehicle itself, which was involved in the accident. Also, Farmers was obligated by its policy to defend its insured. Under these circumstances, no importance is attached to the statement relating to primary liability on the vehicle involved in the accident, nor to Farmers actual defense of its insured.
Conclusions
It becomes clear from our description of the respective policies that each company issued a policy to Platte Valley Paint & Glass Co., Inc. Farmers covered the Mercury automobile, and Fidelity covered certain automobiles owned by Platte Valley and hired automobiles, if any. In each case the Ford came under the insurance afforded. This was by reason of it being a substitute automobile as far as the Farmers policy is concerned, and by reason of it being a hired automobile insured on a cost of hire basis as far as the Fidelity policy is concerned.
Likewise, in each case the insurance afforded for the Ford was limited by the policy to excess insurance over any other collectible insurance. Consequently, neither insurer can have the benefit of being liable for excess amounts only. Therefore, the general provision in each policy for proportionate payment of losses will apply. Cosmopolitan Mutual Insurance Company v. Continental Casualty Company, 28 N.J. 554, 147 A.2d 529, 533-534, 69 A.L.R.2d 1115; Continental Casualty Company v. Buckeye Union Casualty Company, Ohio Com.Pl., 143 N.E.2d 169, 180.
Where the excess insurance clauses of two policies are mutually repugnant, as we find them to be in the policies presently before us, the liability of the insurers must be prorated in proportion to the liability limits provided by the respective policies. This view is supported by the following authorities : Gilkey v. Andrew Weir Insurance Company, 9 Cir., 291 F.2d 132, 135—136; Oregon Auto. Ins. Co. v. United States Fidelity & Guaranty Co., 9 Cir., 195 F.2d 958, 960; Continental Casualty Company v. St. Paul Mercury Fire & Marine Insurance Company, D.C.Fla., 163 F.Supp. 325, 326; Insurance Company of Texas v. Employers Liability Assurance Corporation, D.C.Cal., 163 F.Supp. 143, 146; Hancock v. Western Casualty & Surety Company, D.C.Ky., 154 F.Supp. 164, 166; Continental Casualty Company v. New Amsterdam Casualty Company, 28 Ill.App.2d 489, 171 N.E.2d 406, 411; Cosmopolitan Mutual Insurance Company v. Continental Casualty Company, 28 N.J. 554, 147 A.2d 529, 533-534, 69 A.L.R.2d 1115; Reetz v. Werch, 8 Wis.2d 388, 98 N.W.2d 924, 927; Arditi v. Massachusetts Bonding & Insurance Company, Mo., 315 S.W.2d 736, 743. See also Employers Liability Assur. Corp. of London, England, v. Pacific Employers Ins. Co., 102 Cal.App.2d 188, 227 P.2d 53, 55 and 57, wherein it was held that, in such a situation, both insurers became concurrent insurers and were jointly liable.
For the reasons specified in these conclusions, the case should be reversed and remanded for further proceedings not inconsistent with this opinion.
Reversed and remanded.
BLUME, C. J., not participating.