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GRAY v. MARYLAND CASUALTY COMPANY

June 17, 1957

THOMAS GRAY, D/B/A GRAY MOTOR COMPANY, FOR THE USE OF SHELBY RUSSELL, ALBERT RAY RICH, A MINOR BY SUSIE RICH, HIS MOTHER AND NEXT FRIEND, AND EDWARD THOMAS RICH, A MINOR BY SUSIE RICH, HIS MOTHER AND NEXT FRIEND, PLAINTIFFS,
v.
MARYLAND CASUALTY COMPANY, A CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Juergens, District Judge.

On October 25, 1954, the plaintiffs recovered a judgment against Furman Riddle in the Circuit Court of Franklin County, Illinois, for personal injuries sustained by them on April 16, 1949, in an automobile accident while they were riding in a Plymouth automobile belonging to the Gray Motor Company and being driven by Furman Riddle. At the time of the accident Thomas Gray, an individual, d/b/a Gray Motor Company, was the named insured under a Garage Liability Policy issued by the defendant, Maryland Casualty Company. The policy was issued November 3, 1948, to Thomas Gray, and, although the original policy was not produced, the defendant stated the policy limits and also that it was a Garage Liability Policy and that the photographic copy in evidence is basically the same type policy as the insured had at the time. By this suit the plaintiffs seek to make that policy, within its limits, applicable to the payment of their respective judgments. Both the plaintiffs and the defendant in their respective statements, briefs, and arguments admit that the policy did not have an omnibus clause. An omnibus clause in an insurance policy is usually found under the division thereof defining the term "insured." That division of the insurance policy in question reads as follows:

"III Definition of `Insured'

    "The unqualified word `insured' wherever used
  includes not only the named insured but also any
  partner thereof, if the named insured is a
  partnership, or any executive officer thereof, if
  the named insured is a corporation, provided such
  partner or officer is active in the declared
  operations. The provisions of this paragraph do
  not apply:
    "(a) to any partner of the named insured with
  respect to bodily injury to or death of any
  partner thereof;
    "(b) to any executive officer of the named
  insured with respect to any action brought
  against such officer because of bodily injury to
  or death of another employee of the named insured
  injured in the course of such employment.
    "(c) to any executive officer with respect to
  any automobile owned by such officer or by any
  other executive officer of the named insured or
  by a member of the family of any such person."

Under the provision entitled "Insuring Agreements" it is provided as follows:

"I Coverage A — Bodily Injury Liability

    "To pay on behalf of the insured all sums which
  the insured shall become obligated to pay by reason
  of the liability imposed upon him by law for
  damages, including damages for care and loss of
  services, because of bodily injury, including death
  at any time resulting therefrom, sustained by any
  person or persons, caused by accident and arising
  out of such of the operations hereinafter defined
  as are indicated by specific premium charge or
  charges in item 3 of the declarations." (Emphasis
  supplied.)

Under the heading of "Definition of Operations", as defined in the policy, the ones applicable to this case are set out in Division 1 entitled "Automobile Dealer or Repair Shop," and reading as follows:

    "The ownership, maintenance, occupation or use
  of the premises herein designated, including the
  public ways immediately adjoining, for the
  purpose of an automobile dealer or repair shop,
  and all operations either on the premises or
  elsewhere which are necessary and incidental
  thereto, including repairs of automobiles or
  their parts, and ordinary repairs of buildings on
  the premises and the mechanical equipment
  thereof, and the ownership, maintenance or use of
  any automobile for any purpose in connection with
  the above defined operations, and also for
  pleasure use."

Under the heading "Conditions", as set forth in the policy, Section numbered 6 entitled "Financial Responsibility Laws" provides:

    "Such insurance as is afforded by this policy
  for bodily injury liability or property damage
  liability with respect to any automobile owned by
  the named insured shall comply with the
  provisions of the motor vehicle financial
  responsibility law of any state or province which
  shall be applicable with respect to any such
  liability arising out of the ownership,
  maintenance or use of the automobile during the
  policy period, to the extent of the coverage and
  limits of liability required by such law, but in no
  event in excess of the limits of liability stated
  in this policy. The insured agrees to reimburse the
  company for any payment made by the ...

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