Pacific Automobile Insurance v. Lewis

BARNARD, P. J.

This is an action for declaratory relief for the purpose of interpreting certain insurance contracts and determining which policies covered the defendants in a previous personal injury action. The court found that the automobile in question was not furnished to the respondent H. E. Wells for his regular use within the meaning of clauses in policies issued by The Mercer Casualty Company and Pacific Automobile Insurance Company, respectively, and held that these policies afforded coverage to Wells for the liability in question, and that such liability was to be borne proportionately by these two companies, both of which have appealed from the judgment.

H. E. Wells was a joint owner of a Ford automobile which was insured by'the appellant Pacific Automobile Insurance Company. His wife and his mother-in-law owned an Oldsmobile car which was insured by the appellant The Mercer Casualty Company. Although the accident in question happened while Wells was driving another automobile belonging to his employers it is conceded that he was covered by these two policies of insurance unless he came within one of the exceptions to the .“drive other ears” provision included in each of these policies, which exceptions provided that such coverage (a) should not apply while he was driving another

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automobile “furnished for regular use to the named insured,” and (b) should not apply to any employee of a “sales agency . . . with respect to any accident arising out of the operation thereof.”

The facts are undisputed and may be briefly summarized. Wells was one of six or seven new car salesmen employed by Smith and Haight, who operated an automobile sales agency in San Diego. He and two other salesmen did not own demonstrators while the other salesmen did. Smith and Haight furnished two cars for the use of salesmen which were called “house demonstrators” and while these were primarily for the use of salesmen who did not own demonstrators, they were at times used by all of the salesmen. Three other cars which were set aside for the use of the owners and the sales manager were also available at times for demonstration purposes. Wells used all of these cars at times and sometimes borrowed the demonstrators owned by the other salesmen, but usually used one of the two house demonstrators. His use of a particular car was subject to that car having been previously spoken for by another salesman. It was not uncommon for him to use one of his employer’s cars, including the demonstrators, for his personal use during the daytime and some half dozen nights a month, when he worked late, he would take one of the demonstrators home with him. On some occasions when he had a demonstrator at home he would later take it out for his personal use. He testified, however, that prior to the trip here in question he had never taken an automobile belonging to his employers away from the vicinity of San Diego. There is testimony on the part of Wells’ employers that while they did not encourage the personal use of cars by their salesmen they permitted this practice to a certain extent because this privilege tended to keep them happy and make better salesmen of them.