Summary
holding that where parties made trip for mutual interest, pleasure or benefit, coverage is not excluded as being carrying of passengers for compensation
Summary of this case from Avemco Ins. Co. v. Auburn Flying Service, Inc.Opinion
No. 26824
Decided July 27, 1938.
Insurance — Automobile liability — Carrying passengers for consideration — Joining in expenses of trip for mutual interest, pleasure or benefit — Trip by insured with sisters, who paid expenses — Sisters not passengers for a consideration, within excluded coverage, when.
1. When parties join in meeting the expense of a trip made for their mutual interest, pleasure or benefit, the purpose of the trip on the part of the owner of the automobile is not the carrying of passengers for compensation, and such transportation is not within the provisions of an insurance policy prohibiting the "carrying of passengers for a consideration."
2. Where, upon a trip made by the owner of an automobile and his two sisters to visit their father, the payment of the expense of the car for the trip was made by the sisters, they were not thereby constituted "passengers for a consideration" within the terms of an insurance policy carried by such automobile owner.
APPEAL from the Court of Appeals of Richland county.
This action originated in the Court of Common Pleas of Richland county, where the plaintiff, Helen Beer, sought to recover damages from her brother, Wilbur G. Beer, for injuries which she claimed resulted from his negligent operation of his automobile in which she was then riding with him under an arrangement previously made whereby plaintiff and her sister were to pay the expense of the trip to Columbus. This was the situation at the time the accident occurred upon which the suit for damages was predicated.
The plaintiff was awarded a verdict upon which judgment was rendered, and that judgment was affirmed by the Court of Appeals ( Beer v. Beer, 52 Ohio App. 276, 3 N.E.2d 702), from which judgment no motion to certify the record was filed. Subsequently a supplemental petition was filed wherein the Buckeye Union Casualty Company was made a defendant. The plaintiff alleges the issuance of a policy of insurance by the Buckeye Union Casualty Company wherein it insured Wilbur G. Beer against loss or damage due to the operation of his automobile; that while that policy was in full force and effect the plaintiff, Helen Beer, suffered bodily injuries as a result of the carelessness and negligence of Wilbur G. Beer in the operation of his automobile; and then sets up the recovery of judgment in that action, states that it has not been paid and seeks to recover the amount thereof from the company.
The casualty company by answer admits the recovery of the judgment as alleged, that it is unpaid, that the casualty company had issued the policy as averred, and that it was in effect at the time of the injury. The casualty company, as a second defense, asserts that the policy in question contains certain provisions and restrictions which are as follows:
"8. The automobile described will be used for pleasure and business.
"(a) The term 'pleasure and business' is defined as personal, pleasure and family use including business calls.
"(b) The term 'commercial' is defined as the transportation or delivery and the loading and unloading of goods or merchandise in direct connection with the assured's business occupation as expressed in Statement 3.
"(c) The purposes of use as defined in (a) and (b) foregoing shall exclude the renting or livery use of the automobile and the carrying of passengers for a consideration.
"(d) The automobile shall be insured for renting, livery, carrying passengers for a consideration, the business of demonstrating or testing, or the towing of any trailer, only when such uses are definitely declared and rated.
"(e) Coverage for any trailer covered herein shall apply only while such trailer is being used in connection with any automobile insured by the company."
It further asserts that the policy contains the following provision:
"It is understood and agreed that this policy provides insurance only under such particular coverages as are indicated in Statement 5 of the declarations above, or endorsed hereon, and such coverages are subject to all the terms and conditions written or printed on, or attached to the four pages of this policy."
The casualty company then avers that at the time of the collision resulting in injury to the plaintiff she was a passenger for consideration in the automobile and then recites the averments of the plaintiff's original petition in such action wherein she avers that:
"Sometime previous to the eighth day of March, 1934, her father was ill in a hospital at Columbus, Ohio; that an arrangement was made between the plaintiff, her brother Wilbur G. Beer, and her sister, Mabel Bird, that the car owned by said Wilbur G. Beer should be from time to time driven by him to Columbus, Ohio, in order that they could visit their father in said hospital; that under said arrangement Wilbur G. Beer, the owner of the car, was to drive the car and plaintiff and her sister, Mrs. Mabel Bird, were to pay the expenses of the car on making the trips to Columbus; that under said arrangement plaintiff and her sister went to Columbus several times with Wilbur G. Beer and at all times said plaintiff and her sister paid to Wilbur G. Beer the expense for the use of said car; that said arrangement was made for the mutual benefit of plaintiff, her sister, Mrs. Mabel Bird, and her brother, Wilbur G. Beer.
"Plaintiff says that on the eighth day of March, 1934, under said previous arrangement, she arranged with her brother to go to Columbus to see her father, and that there was also in said car her two uncles, Levi Beer and Dan Beer; that on said date, prior to starting to Columbus she paid to her brother the amount of the expense for the trip."
The casualty company asserts that the case as presented in the pleadings was tried upon the theory that plaintiff was a passenger for consideration and that the Common Pleas Court so instructed the jury. The casualty company further alleges that under the provisions of the policy of insurance in question it specifically excluded coverage for carrying passengers for a consideration.
By reply the plaintiff pleaded estoppel on the part of the casualty company to set up such a defense upon the ground that it had participated in and, through its counsel, conducted the defense in the original proceeding. Upon the issues thus made, the case was tried to the court, a jury having been waived by agreement of the parties. A finding and judgment by the Common Pleas Court in favor of the casualty company was affirmed by the Court of Appeals. The case is in this court upon the allowance of a motion to certify.
Mr. Lewis Brucker and Mr. H.M. Rust, for appellant.
Messrs. Henkel Gongwer, for appellee.
The principal question presented by the record in this case is whether the terms of the insurance policy in question cover an injury sustained by one while riding in the automobile specified, under an arrangement previously made with the assured whereby the owner was to provide and drive the automobile and his two sisters were to pay the expense of the car upon trips made for their mutual benefit. It must be conceded that under the terms of this policy the use of the automobile for carrying passengers for a consideration is excluded from coverage and that there is no liability of the company if, under the facts disclosed by the record, the automobile was at the time in question being used in carrying passengers for a consideration.
We are in accord with the proposition advanced by counsel for the casualty company that one may be a passenger for a consideration in a conveyance other than one operated by a common carrier. The argument that this phrase "passengers for a consideration" has reference only to persons transported by common carriers has little support in reason or authority. On the contrary, it is quite well settled that one may be a passenger for a consideration in an automobile which is ordinarily operated as a private conveyance.
In our opinion, no theory of estoppel is applicable in this case, either against the plaintiff or the defendant casualty company. The record does not support the assertion that the plaintiff prevailed in the original proceeding and secured a judgment upon the theory that she was a passenger for a consideration and consequently is now precluded from recovering in this supplemental proceeding on a policy which expressly excluded from its terms damages arising while the automobile was being used for carrying passengers for a consideration. In the former proceeding, the fact was clearly established that the plaintiff was not a guest within the meaning of Section 6308-6, General Code, which precludes recovery for "loss or damage arising from injuries to or death of a guest while being transported without payment therefor" unless such injuries or death are caused by the wilful or wanton misconduct of the owner or operator of such automobile. The same facts were before the court in both proceedings.
It was properly concluded that, under the facts presented by the record before us, the plaintiff in this case was not a guest of the owner and driver of the automobile. It does not follow, however, from that fact that she was necessarily a passenger for a consideration within the meaning and intent of the clause of exclusion in the insurance policy in question. In the recent case of Dorn, Admr., v. Village of North Olmsted, 133 Ohio St. 375, 14 N.E.2d 11, this court defined a guest within the meaning of the statute to be "one who is invited, either directly or by implication, to enjoy the hospitality of the driver of a motor vehicle, who accepts such hospitality and takes a ride either for his own pleasure or on his business without making any return to or conferring any benefit upon the driver of the motor vehicle other than the mere pleasure of his company." In that case the injured person was riding in the automobile upon the invitation and request of the driver that the former direct the latter to his destination. Surely it would not be claimed that such person, not being a guest, must be classed as a passenger for a consideration.
It must be conceded that there is a division of authority in the construction and application of the clause in question. All are in accord upon the proposition that under the terms so employed the protection of the policy does not cover an automobile when used in carrying passengers for a consideration. The apparent divergence arises from the variety of the fact situations presented in the various cases. Counsel for the casualty company draw the line of demarcation between the cases where there is a voluntary contribution of gasoline, oil or part of the traveling expenses and those cases where there is an agreement or understanding made or entered into in advance of the transportation as to the compensation for the transportation. Upon that theory one would be a passenger for a consideration if he agreed in advance to furnish gasoline for the proposed trip, but would not be a passenger for a consideration if he paid for the gasoline for the same purpose but made no previous promise or statement about it. It is to be observed that in this case the arrangement was made pursuant to a common purpose of the plaintiff, her sister and her brother, who was the assured, which purpose was to visit their father who was in a hospital in Columbus. The assured was to furnish and drive the car and the sisters were to pay the expenses of the car in making the trips to Columbus for the purpose stated. In pursuance of that arrangement, several such trips were made.
In the case of Sleeper v. Massachusetts Bonding Ins. Co., 283 Mass. 511, 186 N.E. 778, the court had before it a policy which, in the respect in question, was identical in its terms with the one involved in this case. In that case, the owner of the car transported two persons under an agreement to take them to their destination and return upon payment of "enough to pay for his gas, oil and meals." However, in that case the owner of the automobile had no personal pleasure or interest in the journey. The court laid down the general rule that "whenever there is a contract, based on valuable consideration, having as its main purpose the carrying of passengers, the insurer under the form of policy in this case does not undertake to indemnify the owner or operator against liability for an occurrence during the journey covered by the contract." The court cited and discussed other cases, including Askowith v. Massell, 260 Mass. 202, 156 N.E. 875, with which it reconciled its decision upon the ground that in the latter case there was a division of expense of operating an automobile among the persons who, with the owner of the automobile, composed a fishing party.
In the case of Ocean Accident Guarantee Corp., Ltd., v. Olson, 87 F.2d 465, decided January 28, 1937, the United States Circuit Court of Appeals of the Eighth Circuit, in considering a policy in which one of the terms of exclusion was "carrying persons for a consideration," reached the conclusion from a review of the various cases dealing with the subject that "The authorities, without dissent so far as we can find, hold that contribution by a person to the expense of a trip by automobile for the joint pleasure of the party, where the parties are friends or are related, is not `consideration' or hire within the meaning of policy provisions such as those now before us. On the other hand, where the parties are strangers and the relation is a business one only, or the contribution is not related to the expense of the trip or exceeds the amount of the expense, the arrangement constitutes a carrying `for a consideration' within the meaning of such policies." Cases cited in support of this conclusion are as follows: Indemnity Ins. Co. v. Lee, 232 Ky. 556, 24 S.W.2d 278; Cartos v. Hartford Accident Indemnity Co., 160 Va. 505, 169 S.E. 594; Askowith v. Massell, supra; Reed v. Bloom (D.C. Okl.), 15 F. Supp., 600; Perkins v. Gardner, 287 Mass. 114, 191 N.E. 350; Park v. National Casualty Co., 222 Iowa 861, 270 N.W. 23, 27; Gross v. Kubel, 315 Pa. 396, 172 A. 649, 95 A. L. R., 146; Orcutt v. Erie Indemnity Co., 114 Pa. Super. 493, 174 A. 625.
In the Ocean Accident Guarantee case, supra, the facts were that the persons constituting the party contributed to a fund covering expense only. Nothing was contemplated for the use of the automobile and no definite sum was agreed to be paid as appeared in Cartos v. Hartford Accident Indemnity Co., supra, where again the distinction is made between the furnishing of gasoline or paying a share of the expense and an advance agreement to pay a specified sum of money.
The Supreme Court of Iowa, in the case of Park v. National Casualty Co., supra, likewise held that the member of an orchestra to whom the members contributed traveling expense was not carrying the other members for a consideration within the exclusion provisions of an automobile liability policy. The cases we have previously cited are there quite fully analyzed and discussed and the following conclusion is announced:
"It is apparent that the authorities quite generally concede that money passing from the passenger to the operator of a car, though associated with the carrying of the passenger, may or may not be a consideration for such carrying, within the meaning of a policy provision such as we are considering. In making the distinction the courts take into consideration not alone the bare transaction but all its surrounding circumstances, including among other things the status and relations of the parties one to another, the existence or lack of common interest, pleasure or benefit in the making of the journey, and the relation of the amount of the money to the actual costs of carrying."
To the same effect is United States Fidelity Guaranty Co. v. Hearn, 233 Ala. 31, 170 So. 59.
In the case of Smith v. Clute, 277 N.Y. 407, 14 N.E.2d 455, recently decided by the New York Court of Appeals, which involved a construction of the Montana Guest Statute, some of the cases above cited and others are discussed and analyzed. It is there shown that "Clearly, a person may be without the category of guest and yet not be within that of a passenger for hire."
Referring again to the undisputed facts in the case at bar, it is found that it comes within that class of cases where the parties joined in meeting the expenses of a trip made for their mutual interest, pleasure or benefit and where the purpose of the trip on the part of the owner of the automobile is not the carrying of passengers for compensation. This brings us to the conclusion that the Common Pleas Court was in error in its finding and judgment and that the Court of Appeals likewise committed error in affirming that judgment.
The judgment of the Court of Appeals will be reversed and final judgment entered for appellant in this court.
Judgment reversed.
WEYGANDT, C.J., DAY, ZIMMERMAN, WILLIAMS, MYERS and GORMAN, JJ., concur.