Insurance lawyers want to know when coverage is provided in the situations they are presented with. Who is covered when a car is being loaned or borrowed? That question is addressed in a 1967, Corpus Christi Court of Appeals case styled, Phoenix Insurance Company v. Allstate Insurance Company.
The material facts in evidence are undisputed. At all times relevant here, Phoenix was the insurer of a car owned by the named insured Ralph Gilster, Jr. Father Wallace J. Stiles, assistant pastor and Youth Director of St. Mary’s Church, Victoria, Texas, contacted Gilster for the purpose of borrowing this car on June 27th to return to their homes in Victoria six girls who were attending a Summer School of Catholic Action for Youth in Corpus Christi. Borrowing the car and returning the girls to their homes in Victoria was in line with Father Stiles’ duties as Youth Director, a fact which Gilster well knew. He had on a number of other occasions borrowed Gilster’s car for out of town trips in connection with such duties. Gilster knew the purpose for which Father Stiles wanted the car, and readily agreed with his request. The distance from Victoria to Corpus Christi and return is a total of 180 miles. Nothing was said between the two as to who would drive the car during the trip, nor had anything been said as to who should drive on any of the other occasions that Gilster had let Father Stiles use the car in his church work. Gilster testified that as a matter of fact, he didn’t give the matter of who would drive any thought; though he further stated that he considered that Father Stiles would be the one to take the car, use it, and bring it back. The words ‘use’ and ‘borrow’ were the terms used in the conversation between Gilster and Stiles, and no reference was made by either party as to who would actually operate the car.
On June 25th, two days before the trip to Corpus Christi, Father Stiles asked James DeLane to drive on this trip. It was agreed by both of the parties that Gilster had not given express permisson for James to drive; but Father Stiles after testifying about the former times he had borrowed Gilster’s car for such trips, on which occasions some one other than himself had driven, stated that he believed it all right that DeLane drive. James, 16 years of age, was president of the Church’s Catholic Youth Organization (C.Y.O.) He had obtained his drivers’ license two years before this, and frequently on these Church trips drove for Father Stiles, who considered him a very good and careful driver. On the morning of June 27th, James went to the Gilster residence, got the car keys from a servant and drove the car to the Rectory where he picked up Father Stiles, and they proceeded to Corpus Christi. They got the six girls and, with James DeLane driving, went back to Victoria. Father Stiles then instructed James to let him off at the Rectory where he had some church duties to perform, and to take the girls to their homes and then to return the car to Gilster’s home. While the girls were being delivered to their homes, an accident occurred between the car driven by James and one driven by Sandra Lou Barr and owned by her father. James had not deviated from his route at any time, and at the time of the accident was engaged in carrying out the instructions of Father Stiles, and in executing the purpose for which the car had been borrowed from Gilster. At a meeting between Gilster, Father Stiles and James DeLane in Gilster’s office two or three days after the accident Gilster made no adverse comment on the fact that James was driving at the time of the accident.