APPEAL from the Appellate Court for the Fourth District; heard
in that court on appeal from the Circuit Court of Champaign
County; the Hon. BIRCH E. MORGAN, Judge, presiding.
MR. JUSTICE GOLDENHERSH DELIVERED THE OPINION OF THE COURT:
This action for declaratory judgment was brought by plaintiff, Maryland Casualty Company, in the circuit court of Champaign County under the provisions of section 57.1 of the Civil Practice Act (Ill. Rev. Stat. 1971, ch. 110, par. 57.1). The issues presented by this appeal are whether insurance coverage was provided defendant William S. Horton, in connection with claims made against him by Charles B. McElhaney and Harold E. Morlan for personal injuries arising out of an automobile collision, under the terms of either or both of two liability policies, one issued by plaintiff and the other by defendant Iowa National Mutual Insurance Company, hereafter called defendant, and if by both, which coverage was primary and which excess. The circuit court directed verdicts against both insurance carriers and entered judgment holding that the plaintiff's policy provided primary coverage and the policy issued by defendant provided excess coverage. Plaintiff appealed, defendant cross-appealed, the appellate court reversed the judgment (5 Ill. App.3d 384), holding that no coverage was provided Horton by either policy, and we granted plaintiff's petition for leave to appeal. The facts are reviewed in detail in the opinion of the appellate court and will be restated only to the extent necessary to this opinion.
In view of the fact that the decision of the appellate court relieves both plaintiff and defendant of liability under their respective policies, we consider it advisable to explain why plaintiff sought leave to appeal. From pleadings on file in this court it appears that following the entry of the circuit court judgment plaintiff assumed the defense of the claims made against Horton, disposed of them for sums within its policy limits, and Horton and the claimants Morlan and McElhaney are no longer parties to this appeal. If we were to reverse the judgment of the appellate court holding that defendant's policy did not provide coverage, and affirm the judgment as to plaintiff, presumably plaintiff would seek to recover from defendant the sums which it has expended.
The record shows that plaintiff had issued to Robert E. Smythe, as the named insured, a policy of liability insurance covering the 1968 Buick which was being driven by Horton at the time of the collision. This automobile, which was titled in the name of Robert Smythe and his wife, was one of two automobiles which they owned. The policy contained the following omnibus clause:
"Persons Insured: Under the liability and medical expense coverages the following are insured:
(a) with respect to an owned automobile,
(2) any other person using such automobile, with the permission of the named insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission * * *."
There was also in force a policy of liability insurance issued by defendant to Donald Horton, the father of defendant Horton, which contained the following provision:
"Persons Insured: Under the liability and medical expense coverage, the following are insureds:
(b) with respect to a non-owned automobile,
(2) any relative, but only with respect to a private passenger automobile or trailer, provided his actual operation or (if he is not operating) the other actual use thereof is with the permission, or reasonably believed to be with the permission, of the owner and is within the scope of such permission * * *."
Robert E. Smythe is the father of Thomas Smythe, who at the time in question was 20 years of age and a student at Southern Illinois University at Carbondale. Although he had previously owned two cars given him by his father, Thomas did not own an automobile in 1968. He was living at his parents' home in Hoopeston, was permitted to use either of the two Smythe family automobiles whenever he wished, and had driven the 1968 Buick on several occasions.
On July 21, 1968, Thomas drove the automobile to a party in Boswell, Indiana, and while there met Horton and John Higgins, both of whom were students at Southern Illinois University, and his friends. Horton lived in Rankin and he and Thomas frequently traveled together between Carbondale and their respective homes. Horton had driven to the party in a pickup truck owned by his father, Donald Horton, and the truck is one of two ...