Appeal from the Circuit Court of Baltimore City; Jones, J.
Brune, C. J., and Hammond, Prescott, Horney and Sybert, JJ. Prescott, J., delivered the opinion of the Court.
This is an appeal by Pennsylvania Threshermen & Farmers Mutual Casualty Insurance Company (Pennsylvania) from a declaratory judgment in favor of the Travelers Insurance Company (Travelers), declaring complete responsibility of Pennsylvania for the full amount of a settlement negotiated by both parties for the personal-injury claim of one Leonard F. Carnes, Jr.
Pennsylvania's insured, Dundalk Signs, Inc. (Dundalk), at the time of Carnes' injury, was principally engaged in sign painting and the painting and lettering of vehicles. Joseph W. Wolf was its president, chairman of its board of directors, owner of 50% of its stock and the active head in running its business.
Prior to the date of the accident which gave rise to Carnes' claim, Chester J. Bartko, Travelers' insured and an occasional customer of Dundalk, delivered his bus to Dundalk for some painting and lettering work. Dundalk usually closed at noon on Saturdays. However, upon the Saturday when Carnes was injured, Bartko phoned Wolf and asked if the bus were finished, and was advised that some lettering remained to be done. Bartko stated that he needed the bus that day so as to have it available for Monday, and Wolf thereupon told Bartko he would finish the job himself after closing hours and would wait for Bartko to come for the bus. This he did. Bartko arrived about midafternoon in his own car but without an extra driver for the bus. Bartko lived only two miles from the Dundalk shop and he asked Wolf to drive the bus to his home, promising
that he would return Wolf to the shop in his car. Upon Wolf's refusal to drive the bus, Bartko then suggested that he would drive it and that Wolf might follow him to his home in Bartko's car, after which Bartko would return Wolf to the shop, where he could pick up his own car to go home. Wolf agreed to this arrangement.
The record discloses that it was not standard practice for Dundalk to pick up and deliver the vehicles it had painted, although it had done so occasionally for other customers. In short, whenever this service was requested it was performed free of charge even though not considered a part of Dundalk's normal business and even though it involved an additional expense to Dundalk to send out an employee for this purpose.
While driving Bartko's car and preparing to turn into his driveway, Wolf collided with Carnes. At this time, Bartko had an insurance policy upon his car with Travelers. The pertinent part thereof in relation to the case at bar is an exclusionary clause therein. It reads, in part, as follows:
"III. Definition of Insured.
(a) With respect to the insurance for bodily injury liability and for property damage liability the unqualified word 'insured' includes the named insured and, if the named insured is an individual, his spouse if a resident of the same household, and also includes any person while using the 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 such spouse or with the permission of either. The insurance with respect to any person or organization other than the named insured or such spouse does not apply:
"(1) to any person or organization, or to any agent or employee thereof, operating an automobile sales agency, repair shop, * * * with respect to any accident arising out of the operation thereof * * *."
After the collision, Carnes filed suit to recover for his injuries and named Dundalk, Bartko and Wolf as defendants. Before trial, Travelers ...