Jamestown Mut. Ins. Co. v. Nationwide Mut. Ins. Co.

146 S.E.2d 410 (1966) 266 N.C. 430

JAMESTOWN MUTUAL INSURANCE COMPANY, a corporation,
v.
NATIONWIDE MUTUAL INSURANCE COMPANY, a corporation, William Clark Hamrick and Mrs. Willie Bowles Lovelace Defendants, and
Frances Sisk Holland, Dale Steven Lovelace and Edwin Eli Lovelace, Additional Defendants.

No. 282.

Supreme Court of North Carolina.

February 4, 1966.

Haynes, Graham, Bernstein & Baucom, Charlotte, for appellant Nationwide Mut. Ins. Co.

Hamrick & Hamrick, by J. Nat Hamrick, Rutherfordton, Joyner & Howison, by R. C. Howison, Jr., Raleigh, for defendant appellants Frances Sisk Holland, Dale Steven Lovelace, and Edwin Eli Lovelace.

Craighill, Rendleman & Clarkson, by Hugh B. Campbell, Jr., Charlotte, for plaintiff appellee.

LAKE, Justice.

We have considered each of the exceptions of the respective defendants to findings of fact made by the court. There is ample evidence to support each of these findings. They are, therefore, conclusive on appeal. Mitchell v. Barfield, 232 N.C. 325, 59 S.E.2d 810; First National Distributing Corp. v. Searvell, 205 N.C. 359, 171 S.E. 354.

Likewise, there was no error in the refusal of the court to make the findings of fact tendered by Nationwide. Insofar as these differ from the findings made by the court, the proposed findings are not material and, as to each of the proposed findings which do differ somewhat from the findings made by the court, there is conflicting evidence and the court's determination of the fact is binding on appeal.

By undertaking the defense of the actions brought and the other claims made against William Clark Hamrick, the plaintiff did not admit or represent that the policy issued by it afforded insurance coverage to him with reference to this collision. It is not thereby estopped or barred to assert the defenses which it raises in this action. It undertook such defense after Nationwide had denied liability under its policy and after giving full notice to William Clark Hamrick and to Nationwide of its reservation of all of its rights and defenses and of its denial of any liability upon it by virtue of its policy issued to Tedder Motor Company.

We come, therefore, to the two questions: (1) At the time of the collision, was William Clark Hamrick "a resident of the same household" with his father, W. F. Hamrick, within the meaning of the Nationwide policy? (2) At the time of the collision, was William Clark Hamrick using the automobile owned by the Tedder Motor Company "in the automobile business" within the meaning of the Nationwide policy?

Insurance policies must be given a reasonable interpretation and where there is no ambiguity they are to be construed according to their terms. Huffman v. Occidental Life Insurance Co., 264 N.C. 335, 141 S.E.2d 496. Where there is ambiguity and the policy provision is susceptible of two interpretations, of which one imposes liability upon the company and the other does not, the provision will be construed in favor of coverage and against the company. Mills v. State Life & Health Insurance Co., 261 N.C. 546, 135 S.E.2d 586.

The words "resident," "residing" and "residence" are in common usage and are found frequently in statutes, contracts and other documents of a legal or business nature. They have, however, no precise, technical and fixed meaning applicable to all cases. As was said by Higgins, J., in Barker v. Iowa Mut. Insurance Co., 241 N.C. 397, 399, 85 S.E.2d 305, 306:

"Residence has been variously defined by this Court. The definitions vary according to the purposes of the several statutes referring to residence and the objects to be accomplished by them. Definitions include ``a place of abode for more than a temporary period of time;' in other cases the word residence is construed to mean ``domicile,' signifying a permanent and established home. The definitions of residence range all the way between these extremes."

Similarly, Ervin, J. said, in Sheffield v. Walker, 231 N.C. 556, 58 S.E.2d 356:

"[T]he word ``residence' * * * has many shades of meaning, ranging all the way from mere temporary presence to the most permanent abode. * * *

"``Residence' is sometimes synonymous with ``domicile.' But when these words are accurately and precisely used, they are not convertible terms. Thayer v. Thayer, 187 N.C. 573, 122 S.E. 307. ``Residence' simply indicates a person's actual place of abode, whether permanent or temporary; ``domicile' denotes a person's permanent dwelling place, to which, when absent, he has the intention of returning. * * *

"[U]nder these [registration] statutes ``residence' means something more than a mere physical presence in a place, and something less than a domicile. The term clearly imports a fixed abode for the time being."

In Watson v. North Carolina R. R., 152 N.C. 215, 67 S.E. 502, Clark, C. J., speaking for the Court, said:

"The word ``residence' has, like the word ``fixtures,' different shades of meaning in the statutes * * * and even in the Constitution, according to its purpose and the context. * * *

"Probably the clearest definition is that in Barney v. Oelrichs, 138 U.S. 529, 11 S. Ct. 414, 34 L. Ed. 1037: ``Residence is dwelling in a place for some continuance of time and is not synonymous with "domicile", but means a fixed and permanent abode or dwelling, as distinguished from a mere temporary locality of existence; and to entitle one to the character of a "resident" there must be a settled, fixed abode, and an intention to remain permanently, or at least for some time, for business or other purposes.' To same effect Coleman v. Territory, 5 Okl. 201, 47 P. 1079. "Residence" indicates permanency of occupation as distinct from lodging or boarding or temporary occupation. "Residence" indicates the place where a man has his fixed and permanent abode, and to which, whenever he is absent, he has the intention of returning.'"

Again, in Chitty v. Chitty, 118 N.C. 647, 24 S.E. 517, 32 L.R.A. 394, Faircloth, C. J., said:

"``Residence' and ``domicile' are so nearly allied to each other in meaning that it is difficult sometimes to trace the shades of difference, although in some respects they are distinct; and the definitions of ``residence' are sometimes apparently conflicting, owing mainly to the nature of the subject with which the word is used, the purpose being always to give to it such meaning and force as will effectuate the intention of that particular statute. The great bulk of cases in the books are cases of statutory residence, as applied to the subjects of voting, eligibility to office, taxation, jurisdiction in divorce proceedings, probate and administrations, limitations, attachments, and the like cases. The word is frequently used in the sense of bodily presence in a place, sometimes a mere temporary presence, and sometimes the most settled and permanent abode in a place, with all the shades of meaning between these extremes, and also with reference to the distinction between an actual and legal residence. So it seems entirely proper to consider its meaning in connection with the subject-matter and the purpose of the statute in which it is found, as well as the relation of the citizen to the subject matter."

In 17A Am.Jur., Domicile, § 9, it is said:

"``Residence' has many shades of meaning—from mere temporary presence to the most permanent abode. Generally, however, it is used to denote something more than mere physical presence, in which event intent is material. ``Residence,' as a legal term, is something more than the mere actual presence in a locality, even where it is not equivalent to domicile. * * *

"Any place of abode or dwelling place constitutes a residence, however temporary it may be, while the term ``domicile' relates rather to the legal residence of a person or his home in contemplation of law."

In 77 C.J.S. Resident p. 305, it is said:

"The word ``resident' is in common usage, and many definitions of it are to be found in the decision. It is, nevertheless, difficult to give an exact, or even a satisfactory, definition, for the term is flexible, elastic, slippery, and somewhat ambiguous."

When an insurance company, in drafting its policy of insurance, uses a "slippery" word to mark out and designate those who are insured by the policy, it is not the function of the court to sprinkle sand upon the ice by strict construction of the term. All who may, by any reasonable construction of the word, be included within the coverage afforded by the policy should be given its protection. If, in the application of this principle of construction, the limits of coverage slide across the slippery area and the company falls into a coverage somewhat more extensive than it contemplated, the fault lies in its own selection of the words by which it chose to be bound.

In the construction of contracts, even more than in the construction of statutes, words which are used in common, daily, nontechnical speech, should, in the absence of evidence of a contrary intent, be given the meaning which they have for laymen in such daily usage, rather than a restrictive meaning which they may have acquired in legal usage. In the construction of contracts the purpose is to find and give effect to the intention of the contracting parties, if possible. Thus the definition of "resident" in the standard, nonlegal dictionaries may be a more reliable guide to the construction of an insurance contract than definitions found in law dictionaries. Webster's New International Dictionary, 2d Ed., contains the following definition:

"Resident. One who resides in a place; one who dwells in a place for a period of more or less duration. Resident usually implies more or less permanence of abode, but is often distinguished from inhabitant as not implying as great fixity or permanency of abode."

In Newcomb v. Great American Insurance Co., 260 N.C. 402, 133 S.E.2d 3, this Court had before it for construction the identical language used in the Nationwide policy. There, a mother had two sons and a daughter. One son was away from home in military service, the other away from home in college. The daughter married. She and her husband stayed in the home of the mother for several months. Then they renovated and furnished another house, belonging to the mother, about one quarter of a mile away, and moved into it. Some months later, following the death of the mother's mother, who had been living with her, the daughter and her husband returned to the mother's home and remained there for three or four months until the son, who was in college, came home. The daughter and her husband then moved back to their own cottage and remained there approximately a month until the son returned to school. They then moved back into the mother's house where they slept, ate and lived until an accident occurred, at all times keeping their own cottage ready for immediate occupancy and intending to return to it when either of the sons came home. Under those circumstances, we held that the mother, the daughter, the son-in-law and the daughter's child were "residents of the same household."

In the Newcomb case the daughter had a home of her own to which she intended to return. While the contemplated stay in the mothers' home was longer than William Clark Hamrick's contemplated stay in his father's home, both periods were somewhat indefinite and both were, from the first, recognized as temporary arrangements.

The same language used in the Nationwide policy was before the Supreme Court of Washington in American Universal Insurance Co. v. Thompson, 62 Wash.2d 595, 384 P.2d 367, 370. There, the Washington Court held that a married son, away from his parents' home due to military service and having established no residence elsewhere, was, during such absence, a "resident" of his parents' household. The Court said:

"While the cases do not all appear consistent, it can generally be stated that, insofar as the cases involve insurance policies, they can be roughly divided into cases involving policies excluding from coverage of the policies members of the insured's household, and those extending coverage to such persons. Both attempt to apply the rules of construction above discussed. As a result, in the extension cases the questioned terms are broadly interpreted, while in the exclusion cases the same terms are given a much more restricted interpretation. This is necessary because in both situations the courts favor an interpretation in favor of coverage. * * *

"The touchstone * * * is that the phrase ``resident of the same household' has no absolute or precise meaning, and, if doubt exists as to the extent or fact of coverage, the language used in an insurance policy will be understood in its most inclusive sense."

William Clark Hamrick had no home of his own. He went back to his father's house, carrying with him all his possessions. His intent was to remain there until living quarters more convenient to his employment could be found and the necessary arrangements made for his occupancy of them. In the meantime, he lived in and used his father's house as he had done when a boy, sleeping there, taking his meals there, having the run of the house, and having his laundry included in the family laundry. For all of this he paid no board. We think it clear that under these circumstances he was "a resident of the same household" as his father. He is not in the same position as an adult child having a home of his own to which he intends to return and making a mere visit to his parents. Nor is he in the position of a mere roomer or boarder. He was there because he was a member of the family and had no other home.

The second question raised by the contentions of Nationwide turns upon the construction of the following language in its policy:

"Exclusions. 1. This policy does not apply * * * (f) to a non-owned automobile while used (1) in the automobile business by the Insured or (2) in any other business or occupation of the Insured * * *." [Emphasis added.]

The policy defines "automobile business" to mean "the business of selling, repairing, servicing, storing or parking of automobiles."

It is not enough, in order to bring the automobile, driven by William Clark Hamrick at the time of the collision, within this exclusionary clause of the policy, to show that the owner of the automobile, Tedder Motor Company, was engaged in the business of selling automobiles and that the vehicle was part of its stock in trade. The Tedder Motor Company was not an "Insured" under the Nationwide policy. William Clark Hamrick was the "Insured" in question. The exclusionary clause does not come into operation unless William Clark Hamrick was using the automobile "in the automobile business * * * or in any other business or occupation" of his own. He was not engaged in the "automobile business." He was only a prospective purchaser of the car. He was a textile worker. He was not driving the vehicle in that occupation. It would be a strained construction of the phrase "used in the automobile business" to apply it to a prospective purchaser of a vehicle who is "trying it out" to see if he likes it.

There was no error in the conclusion of the trial court with reference to either of these questions presented by the contentions of the parties.

Affirmed.