Court Opinion

ID: 6913930
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:34:18.620836+00
Date Added: 2024-06-11T16:06:35.896585
License: Public Domain

JOHNSEN, Circuit Judge
(dissenting).
Egge, the owner of a Buick automobile, took out liability insurance on it in the Wolverine Insurance Company. The policy issued to him by the Company’s resident agent provided that such coverage would exist in his favor, not merely as to the Buick, but also as to any automobile not owned by him “while temporarily used as the substitute for the described automobile while withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction”.
Obviously, the use of the terms “loss” and “destruction” implied and contemplated that a situation could physically come to exist in which there might no longer actually be ownership by Egge of the Buick car as such and as a further risk-subject,1 but in which the insured nevertheless would be possessed of liability coverage as to another car not owned by him, “temporarily used as the substitute for the described automobile”. And such a situation would also naturally tie into the further provision of the policy, for an extension of its coverage to a “newly acquired automobile”, if the latter “replaces an automobile described in this policy”, and “if the named insured notifies the company within thirty days following the date of its delivery to him”.
It therefore does not seem to me that it can be held, generally and absolutely, as the trial court and the majority here *356have done,2 that; in any hiatus of actual automobile ownership by the insured, all protection under the policy will necessarily cease. Such a holding fails to take account of the fact that, in situations of “loss” or “destruction” at least, as I have pointed out, coverage is provided as to a “temporary substitute automobile”, even though no physical existence or ownership of the described automobile can insurably or legally be said to have survived.
When the present situation is approached in this light, I think there is suggested a different policy perspective and coverage aspect in relation to the facts before us than have been given recognition by the majority opinion.
Egge had taken out the liability policy on July 8, 1951, for a term of one year. Seven months later, he wanted to replace the insured car with a new Buick. He placed a signed order with the dealer on February 20,1952, specifying the type of car he wanted, but was told that there would be a delay in his obtaining delivery. After a lapse of two weeks, on March 4, 1952, he sold the car described in the policy. He went to the insurer’s agent and told him all the facts as to his situation. The agent suggested that he allow the policy to continue and become applicable to the new Buick as a replacement, when the car was delivered to him.
The new car had not yet become available at the time the accident occurred. This was on April 3,1952, within 30 days after the sale of his described car and after the agent’s suggestion and agreement to let the policy remain in effect. The car with which he had the accident was an Oldsmobile passenger automobile, owned by a third party, and being driven by Egge under circumstances and conditions from which the trial court could have found that it was being used by him at the time as a “temporary substitute automobile”,3 if that coverage was otherwise capable of being regarded as not having ceased under the policy.
As previously observed, if Egge’s ownership of the described automobile had ceased to exist as a matter of loss or destruction of the car, temporary coverage would, under the terms of the policy, still have existed in his favor as to his use of a “temporary substitute automobile”. At what point, in period, extent, nature or incidents of such a use, the bounds of this temporary coverage might have been passed, so as to fall outside the intention of the policy, would, I think, in the absence of any definitiveness in the contract itself, ordinarily be a question for resolution on a trial, in relation to the circumstances of the particular situation presented. In any event, it would not seem to be possible to declare generally, as a matter of law, that such coverage could not at all be regarded as having been intended to exist for a period of 30 days (within which time the accident here involved occurred), at least when a replacement ear had been promptly ordered, in the light of the provision giving the insured a period of 30 days, after delivery, in which to notify the insurer of the fact of a replacement.
Unless therefore there are some other provisions in the policy which, as a matter of law, preclude a consideration of the facts of the present situation in relation to the apparent purpose and spirit of the provision for temporary coverage as to a transient substitute automobile, I believe that the case should be remanded to the trial court for a resolution and appraisal of the circumstances related to the particular automobile and its use.
*357The majority opinion, as I have noted, does not give any consideration to the language and implications of the “temporary substitute automobile” provision where liability coverage has ceased to be present as to the described car from cessation of ownership. The opinion predicates its result primarily on Insuring Agreement V, “ ‘use of other automobiles’ ”, relying upon the condition prescribed by that Insuring Agreement for the existence of such additional insurance — “If the named insured is an individual who owns the automobile classified as ‘pleasure and business’ * * It also calls attention to the provision of Insuring Agreement VIII, that “This policy applies only to accidents which occur * * * while the automobile * * * is owned, maintained and used for the purposes stated as applicable thereto in the declarations”.
If coverage was capable in the circumstances of existing under the provision of Insuring Agreement IV as to “temporary substitute automobile”, then the coverage of Insuring Agreement V as to “ ‘Use of Other Automobiles’ ” would not be involved. But even if Insuring Agreement V were applicable, I think the emphasis in the condition quoted above is upon the fact that the car ownership involved under the policy must be by “an individual” and not by a corporation or association, in order for any coverage to exist as to the “ ‘Use of Other Automobiles’ ”. And, as to Insuring Agreement VIII, it equally seems to me that the emphasis in the language quoted from this portion of the policy is on a differentiating of the accidents occurring from the described automobile, as a matter of closing the door to any possible contention with respect to accidents which may occur outside the ownership, maintenance and use-purposes set out in the declarations. Thus, for one thing, the language quoted would prevent a purchaser of the car from claiming under any circumstances, regardless of what the relations between himself and the insured may have been, that an accident occurring in his ownership, maintenance and use of the automobile was covered by the policy.
In this connection, reminder may be made, though it should hardly be necessary to do so, that under the law of South Dakota, as generally, “if there is any uncertainty or ambiguity in the contract of insurance it must be construed most strongly against the insurer and in favor of the insured.” Ehrke v. North American Life & Casualty Co., 71 S.D. 376, 24 N.W.2d 640, 641; Sunshine Mutual Ins. Co. v. Addy, 73 S.D. 595, 47 N.W.2d 285; Melham v. Watertown Sash & Door Co., 67 S.D. 254, 291 N.W. 735.
To bring the situation into focus again, I shall, in concluding, briefly repeat the facts. Five months before the expiration of his insurance contract, Egge ordered a new Buick to replace the one covered by his policy. Delivery of the new car could not momentarily be obtained. He waited two weeks before selling his old car. He then went to the insurer’s agent and told him all the facts of the situation. The agent suggested that the policy be allowed to stand so that it could cover the new car when it was delivered. Within 30 days thereafter, and while Egge was driving an Oldsmobile car owned by another, which on the evidence it could be found that he had been given the right to use temporarily for such purpose, among others, as the insured car had previously served, and that he and his wife had so used it on two occasions only, the accident involved occurred. The answer of the insurer admitted that the policy was “in full force and effect” at the time the accident occurred.
On these facts, I think that it was possible to find that the insurer’s agent, in suggesting that the policy not be terminated but continued, had treated the situation, as related to Egge’s sale of his car, his preceding ordering of a replacement therefor, and his awaiting of delivery thereof, as entitling the coverage to stand, on the same basis in the particular situation, where knowledge had been imparted to him of all the facts, as if there had been a loss or destruction of the car, *358with the bridging right in Egge, for a reasonable period under all the circumstances, to make use of a temporary substitute automobile, while a replacement was in the process of being obtained.
Or alternatively, I think that there equally was room to view the situation as constituting one in which the agent, with his knowledge of the facts, and for purposes of not having the policy cancelled, had permitted the ordered car to be treated constructively as a replacement, “withdrawn from normal use” for a reasonable period of delivery, and thus keeping in effect the auxiliary incidents of coverage which would exist in relation to this practical treatment of the particular circumstances.
It may be added, in connection with what I have said, that, in the agent’s continuation of the policy, the Company received a premium for the risk period that is here involved, in the same amount as if the described car had not been sold or as if the replacement car had concurrently been delivered, and that the hazard as to the use of the Oldsmobile car in temporary substitution also was the same in each situation.
What I have said is not to be taken to mean that I think that liability necessarily must be held to exist in the situation. I am merely expressing the view that the facts of the situation entitle the case to be approached in this channel and evalued on this basis, and that it should therefore be remanded to the trial court for such a consideration. Such a consideration might perhaps involve other elements of defense not here urged, and these ought, of course, to be left open to the insurer in any further proceedings had.
It is not necessary for me to give any consideration to the policy of the Hawk-eye Security Insurance Company, for that policy was issued in relation to a Ford Farm Pick-up Truck, for which the ordered Buick car was in no way intended to constitute a replacement, and as to which the Oldsmobile passenger automobile could not at all, in its use at the time of the accident, be claimed to represént a temporary substitute.
I would accordingly reverse the judgment of dismissal made as to the Wolverine Insurance Company and remand the case for further proceedings in relation to the views which I have expressed.

. Though perhaps unnecessary, hypothetical illustrations may be given of situations in which the insured could be left without ownership of the described car, but where he nevertheless would have some measure of protection, under the terms of the “temporary substitute automobile” provision, in his temporary use of another car. Thus, the Buick might have become involved in a bridge accident, causing it to plunge off and be submerged in such a depth of water as realistically to prompt the insured to make a legal abandonment and to constitute a “loss” of it. Or the ear could have become so completely consumed by fire or other element as to make its “destruction” leave it without substance or capacity for further ownership, whether as an automobile or otherwise.

. The majority opinion says that, since Egge was without ownership of the Buick car at the time of the accident involved, “there was no insurance afforded by the policy ‘with respect to said automobile’ and therefore none applicable ‘to any other automobile’.”

. The evidence would also have permitted the court to reach a contrary conclusion on the circumstances related to the use on the particular occasion, but this is not of importance here, since that question was in no way considered or involved in the disposition which the trial court made.