Where an insurer denies coverage under a particular policy and seeks to relieve itself of its obligation to defend a pending suit against an insured because of circumstances pleaded which cast doubt on the coverage of the policy as applied to those circumstances, there is such an immediacy of choice imposed upon it as to justify an adjudication by declaratory judgment.
Nationwide Mutual Insurance Company filed this action seeking a declaratory judgment and naming Don Peek and Alton Wilson as defendants. The petition discloses the following facts: Plaintiff issued to Watkins Motor Lines, Inc. an automobile liability insurance policy for the policy period April 16, 1961, to April 16, 1962. A copy of the policy is incorporated in the petition. According to its provisions plaintiff agreed "to pay on behalf of The Insured all sums which The Insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the ownership, maintenance or use of the automobile [Coverage E]." The policy defined "insured" as follows: "With respect to the insurance for Bodily Injury Liability and for Property Damage Liability the unqualified word 'Insured' includes the Named Insured and also includes any person while using an owned automobile or a hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the Named Insured or with his permission, and any executive officer of the Named Insured with respect to the use of a non-owned automobile."
On February 24, 1962, each of the defendants owned a tractor-trailer truck which was "under lease to and in the service of" Watkins Motor Lines, Inc. On that day the two vehicles were involved in a collision with each other, and Peek's vehicle was damaged. At that time Wilson's truck was being operated by Wilson's employee. Peek afterwards instituted suit against defendant Wilson, seeking to recover $9,500 for the damages to Peek's truck.
Both defendants contend that defendant Wilson is a person insured under the policy issued by plaintiff to Watkins Motor Lines, Inc. and that coverage is afforded for the alleged occurrence. Petitioner contends that indemnity against Wilson's liability for the property damage to Peek's truck is excluded by the following policy provision: "This policy does not apply: . . . (f) under Coverage E, to injury to or destruction of property owned or transported by the Insured, or property rented to or in charge of the Insured other than a residence or private garage injured or destroyed by a private passenger automobile covered by this policy."
Wilson demanded that plaintiff assume defense of Peek's suit against Wilson. Plaintiff denied that it was obligated to defend the suit, but filed a defense after entering into a waiver agreement with Wilson expressly reserving its right to contend that Wilson was not entitled under the policy to indemnity for liability for the alleged property damage.
To the petition each defendant filed numerous general and special demurrers. After a hearing the court sustained general demurrers 1 and 2 of each defendant, which were based in different language on the ground that the petition failed to state a cause of action, and dismissed plaintiff's petition. No ruling was made on the other general and special demurrers.
Plaintiff excepts to the judgment of the trial court sustaining defendants' demurrers and dismissing the petition.
The dispute between the parties is whether the term "insured" as it appears in the exclusionary provision relied upon by plaintiff is used severally to mean only the particular insured claiming coverage or collectively to mean the named insured together with any other person claiming coverage as an "insured" within the definition of the term.
However, this dispute, which requires a construction of the policy provisions and leads to an ultimate determination of the parties' rights and obligations, is not for consideration of this court upon the plaintiff's exceptions to the judgment sustaining defendants' general demurrers. These issues are for the trial court and may involve mixed questions of law and fact. "The test of the sufficiency of a complaint in a declaratory judgment proceeding is not whether the complaint shows that the plaintiff is entitled to the declaration of rights in accordance with his theory, but whether he is entitled to a declaration of rights at all, so that even if the plaintiff is on the wrong side of the controversy, if he states the existence of a controversy which should be settled, he states a cause of suit for a declaratory judgment. And where a complaint in a proceeding for a declaratory judgment stated a justiciable controversy, a demurrer should have been overruled, and after the filing of an answer, a decree containing a declaration of right should have been entered." Georgia Cas. &c. Co. v. Turner, 86 Ga. App. 418
, 423 (71 SE2d 773
); Parks v. Jones, 88 Ga. App. 188
, 191 (76 SE2d 449
); Darling v. Jones, 88 Ga. App. 812
, 815 (78 SE2d 94
); Mock v. Darby, 109 Ga. App. 620 (137 SE2d 81)
Regardless of whether the plaintiff's contentions are or are not correct in fact and in law, the petition here shows that plaintiff is in a position of uncertainty and insecurity with respect to its rights and obligations under the policy. On general demurrer, "Basically the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." St. Paul Fire &c. Ins. Co. v. Johnson, 216 Ga. 437
, 438 (117 SE2d 459
). Where an insurer denies coverage under a particular policy and seeks to relieve itself of its obligation to defend a pending suit against an insured because of circumstances pleaded which cast doubt on the coverage of the policy as applied to those circumstances, there is such an immediacy of choice imposed upon it as to justify an adjudication by declaratory judgment. The action has been allowed under similar circumstances in Mensinger v. Standard Accident Ins. Co., 202 Ga. 258 (2) (42 SE2d 628)
; St. Paul Fire &c. Ins. Co. v. Johnson, supra; Georgia Cas. &c. Co. v. Turner, supra; Griffin v. Hardware Mut. Ins. Co., 93 Ga. App. 801 (92 SE2d 871)
; Buffington v. New Hampshire Fire Ins. Co., 104 Ga. App. 139 (121 SE2d 270)
; Dearhart v. Reserve Ins. Co., 108 Ga. App. 347 (132 SE2d 809)
, rev. 219 Ga. 699 (135 SE2d 378)
upon another point, and in other cases. The trial court erred in sustaining defendants' general demurrers.
Judgment reversed. Frankum and Hall, JJ., concur.