For affirmance -- Justices Burling, Francis, Proctor and Hall. For reversal -- Chief Justice Weintraub, and Justices Jacobs and Schettino. The opinion of the court was delivered by Proctor, J. Weintraub, C.J. (dissenting). Mr. Justice Jacobs and Mr. Justice Schettino join in this dissenting opinion.
This case presents a question of coverage under the omnibus clause of an automobile liability insurance policy issued by the defendant company. The facts were stipulated.
In March 1957 the defendant company issued the policy in question to John Ranaletti as the named insured. The policy was in effect at the time of an accident in February 1958, and covered an automobile involved in the accident that was owned by Ranaletti and driven at the time by Robert Tureckie. Under the terms of the policy, the defendant company extended coverage for liability to Ranaletti, as the named insured, to any resident of his household, and to "any other person using such automobile provided the actual use thereof is with the permission of the named insured * * *."
When the insured automobile was bought by Ranaletti, he immediately turned it over to his nephew, George Rogers, a member of his household under 21 years of age, for Rogers' exclusive use. At the same time, "Rogers was expressly prohibited by the named insured from permitting other people to use said vehicle." Down to the date of the accident, Rogers used the automobile "for his pleasure."
At the time of the accident involving the automobile, Robert Tureckie was driving it "with the express consent and permission of George Rogers." Rogers lent Tureckie the automobile with knowledge that Tureckie was to use it for a social engagement, and with knowledge that Bernard Kulp was to accompany Tureckie. "Aside from this favor to Tureckie there was no advantage or benefit to either Rogers or the named assured in this use of the car by Tureckie, except insofar as this use served Rogers' pleasure."
In the accident that occurred while Tureckie was driving the car, Bernard Kulp was injured. The defendant company
disclaimed liability and did not defend Tureckie in an action brought against him by Gertrude Kulp Baesler, individually, and as guardian ad litem of Bernard Kulp, for damages for the latter's personal injuries. Judgment was entered in that action against Tureckie in the total amount of $3,177.75. In the present action Gertrude Kulp Baesler, in the same capacity, seeks to recover the amount of the judgment from the defendant company, asserting that Tureckie was an additional insured under the terms of the aforementioned liability policy.
In the Superior Court, Law Division, summary judgment was granted the defendant company on the facts stipulated. On the plaintiffs' appeal, the Appellate Division unanimously affirmed. 57 N.J. Super. 386 (1959). The case is here on petition for certification granted. 31 N.J. 551 (1960).
It is a well-established general rule that when the named insured gives another permission to use his insured automobile, without more, the permittee is not thereby authorized to allow another to use it. And if he does, the second permittee's use is not "with the permission of the named insured," as those words are used in a comprehensive liability policy. Cronan v. Travelers Indemnity Co., 126 N.J.L. 56 (E. & A. 1941); Standard Accident Ins. Co. v. New Amsterdam Cas. Co., 249 F.2d 847 (7 Cir. 1957); Aetna Cas. & Surety Co. v. DeMaison, 213 F.2d 826 (3 Cir. 1954); United Services Automobile Ass'n v. Preferred Accident Ins. Co., 190 F.2d 404 (10 Cir. 1951); Fox v. Crawford, 50 Ohio Law Abst. 553, 80 N.E. 2 d 187 (Ohio Ct. App. 1947); Boyer v. Massachusetts Bonding & Ins. Co., 277 Mass. 359, 178 N.E. 523 (Sup. Jud. Ct. 1931); 7 Appleman, Insurance, § 4361 (1942); Annotation 160 A.L.R. 1195, at p. 1210 (1946).
The rule is subject, however, to a broad qualification in terms of the scope of the named insured's initial grant of permission. The factual determination must be made, in every case where the first permittee permits another to use the insured automobile, whether the initial grant of
permission was broad enough to include an implied grant to the permittee of authority to give another use of the automobile and thus to render the latter an additional insured under the omnibus clause of the policy. Costanzo v. Pennsylvania Threshermen, etc., Ins. Co., 30 N.J. 262 (1959); National Grange Mut. Liability Co. v. Metroka, 250 F.2d 933 (3 Cir. 1958); Utica Mut. Ins. Co. v. Rollason, 246 F.2d 105 (4 Cir. 1957); United Services Automobile Ass'n v. Preferred Accident Ins. Co., supra; Boyer v. Massachusetts Bonding & Ins. Co., supra; 7 Appleman, Insurance, § 4361 (1942).
Thus, it is almost universally held in the modern cases that where the named insured grants his permittee broad and unfettered dominion over his insured automobile, he also impliedly authorizes his permittee to allow a third person to use it, and thus to render him an additional insured. Costanzo v. Pennsylvania Threshermen, etc., Ins. Co., supra; National Grange Mut. Liability Co. v. Metroka, supra; Utica Mut. Ins. Co. v. Rollason, supra; Indiana Lumbermens Mut. Ins. Co. v. Janes, 230 F.2d 500 (5 Cir. 1956); Pennsylvania Thresherman, etc., Ins. Co. v. Crapet, 199 F.2d 850 (5 Cir. 1952); State Farm Mut. Auto Ins. Co. v. Porter, 186 F.2d 834, 52 A.L.R. 2 d 515 (9 Cir. 1950), rehearing denied 186 F.2d 844 (9 Cir. 1951); Robinson v. Fidelity & Cas. Co., 190 Va. 368, 57 S.E. 2 d 93 (Sup. Ct. App. 1950); Perrodin v. Thibodeaux, 191 So. 148 (La. Ct. App. 1939). Contra, Samuels v. American Automobile Ins. Co., 150 F.2d 221, 160 A.L.R. 1191 (10 Cir. 1945). The first permittee, by ...