Pacific Indemnity Co. v. Harrison

277 S.W.2d 256

Opinions

YOUNG, Justice.

The suit of plaintiffs (appellees) was for recovery on an automobile insurance policy; the vehicle owned by them having been lost in a transaction alleged to be within coverage of the contract of insurance sued upon. Defendant Company denied liability on ground that the loss suffered was subject to an exclusion, also contained in the policy; upon trial, the court holding the exclusion not applicable and rendering judgment for plaintiffs in amount of $750 and legal interest from November 25, 1953. Defendant has duly appealed the adverse rendition.

Plaintiffs were automobile dealers in the Oak Cliff section of Dallas and facts antecedent to their claim are, in brief, that on July 23, 1953, after banking hours, a stranger giving name as J. E. Davis came to their place of business and asked to be shown some used cars with a view of purchase. He represented himself as newly from Georgia, giving local address and name of employer; deciding, after a trial run, to buy a 1949 four-door Buiclc Super, then owned by plaintiffs and on the premises for sale. Davis thereupon signed the required tax affidavit and application for Texas Certificate of Title, giving check upon a local bank in payment. The car was then turned over to him with instruction to return the next morning for papers transferring the title; the salesman at the time calling appellees’ insurance agency and securing a binder covering the transaction. Said Davis did not return for the further papers, having no account at the named bank, and his statements as to em ployment and residence were found to be false; he disappearing in fact with plaintiffs’ car and efforts to locate him through police channels and otherwise were without avail. Due proof of loss was made as for theft with car valued at $750; provision of policy applicable thereto being: “Coverage G-2- Theft (Deductible form) To pay for loss of or damage to the automobile, hereinafter called loss, caused by theft, larceny, robbery or pilferage, except that $25.00 shall be deducted from the amount of each loss not occasioned by the taking of the entire automobile.” In turn, appellant denies liability for the loss on basis of the following exclusion: “Exclusions — The policy does not apply: (d) Under any coverage — to loss resulting from either the insured voluntarily parting with title and possession of an automobile if induced so to do by any fraudulent scheme, trick, device, false pretense, or from embezzlement, conversion, secretion, theft, larceny, robbery or pilferage commited by any person, including any employee, entrusted by the insured with either custody or possession of the automobile.”

Certificate of Title to the insured automobile had not been endorsed, assigned, or delivered, to Davis, the thief, on the afternoon of July 23,. 1953', when he obtained possession of same and disappeared. Such instrument is still in the -hands of appellees and was introduced in evidence. Obviously, therefore, that part of the policy-exclusion of coverage does not-apply to a loss not involving insured’s voluntary-parting with both title and possession -of this property. Neither was- there an entrustment under instant facts and circumstances. In Webster’s New International Dictiori-ary, Second Edition, Unabridged, the word “entrust” is defined as follows: “To confer a'.trust upon; esp., to deliver to (another) something in trust, or to commit or surrender (something) to another with a certain confidence regarding his care, use, or disposal'of it; as, to entrust a servant with one’s goods, or to entrust money to a servant.” In 22 Words and Phrases, Intrust, p. 485, the case of State v. Ugland, 48 N.D. 841, 187 N.W. 237, 249; is cited, defining “entrusted” as meaning “something more than naked possession or custody .of, or access- to property appropriated. It is defined as to confer a trust upon; to deliver to another something' in trust or to- commit something to another .with a. certain confidence regarding his care, use or disposal of it.” Appellant makes a strong argument, in support of its second point.¹ Plowever wé approve appellees’ statements made-in the same connection: “It is clear that the condition described in this definition (Webster’s Dictionary) did not exist- in the transaction which- gave rise to this lawsuit. The appellees did not confer a trust upon the thief, and they entertained no confidence regarding the care, use or disposal of the automobile, since the relationship which they contemplated was that of seller and purchaser. In such a relationship there is no trust, or any confidence regarding the future disposal of the automobile.”

The judgment under review is accordingly affirmed; approving and making part of, this opinion the trial court’s findings of fact and conclusions of law: “Findings of Fact: (1) The insurance policy introduced into evidence was in full force and effect at all times material herein, according to stipulation of the parties. (2) The plaintiffs are the owners of a 1949 Buick automobile, more specifically described in the title certificate received in this case as plaintiffs’ Exhibit 2, which is under mortgage held by the Oak Cliff Bank & Trust Company, in which the Oak Cliff Bank & Trust Company has an equitable interest having paid off the note on this automobile. (3) The automobile was held for sale by the plaintiffs in their business of dealer in used automobiles. (4) That pursuant to their business of buying and selling automobiles, the plaintiffs, through their agent, Powell, negotiated with an individual identifying himself as James E. Davis, 216 S. Ewing Street, Dallas, Texas, for the sale of said automobile. (5) That during such negotiations Davis made false and fraudulent statements to the agent of the plaintiffs. (6) That such statements and the conduct of Davis constituted a false pretext whereby Davis obtained possession of the automobile. (7) At the time he obtained the automobile, Davis had the intent to deprive the owners of the value thereof, and to appropriate it to his own use and benefit. (8) Pursuant to such intent Davis' did so appropriate the automobile. (9) That the Certificate of Title to said automobile was not endorsed, assigned, or delivered to Davis at any time. (10) That it was the understanding of the plaintiffs at the time they parted. with possession of the automobile that a sale had been made and it was their intention at the time of this supposed ' sale that the individual indentified' as Davis should receive both possession and title of the automobile. (11) The plaintiffs did not entrust the automobile to Davis. (12) Davis was a thief, and the entire transaction heretofore mentioned with reference to this sale was but a cleverly executed, fraudulent scheme, which constitutes a theft of the automobile, and that Davis did not receive title, either legal or equitable, to the automobile in question. (13) According to the stipulation of the parties,' the amount of the loss would be $750.00. (14) According to the stipulation of the parties, the proof of loss received in the case as plaintiffs’ Exhibit-, was submitted to the defendant within the time prescribed by the policy. (15) The time for submission of the proof of loss being within ninety-one days from the date of the loss, the proof of loss was submitted on or before the 25th day of October 1953. (16) The defendant has not paid the amount of the loss in accordance with such proof of loss submitted to them by the plaintiffs. Conclusions of Law: (1)- The plaintiffs, on the 23rd day of July, 1953, suffered a loss by theft of the automobile in controversy, which loss is within the meaning of the insurance policy sued upon. (2) In the policy sued upon, under Paragraph 5 of Form 10, Subparagraph (d) of said Paragraph 5, under ‘Exclusions,’ reading: ‘Under any coverage’ etc., the first portion of said exclusion being the loss resulting from ‘the insured voluntarily parting with title and possession of any automobile, if induced so to do by any fraudulent scheme, trick, device, false pretense,’ is not applicable here because the title to the automobile. has not passed to Davis, who, under the previous findings of fact, has the status of a thief and no more. (3) That the following portion of said exclusion, reading: ‘or, from any embezzlement, conversion, secretion, theft, larceny, robbery or pilferage committed by any person, including any employee, entrusted by the insured with, either custody or possession of the automobile’ is to be construed as limiting the class of persons to those entrusted with either custody or possession of the automobile. (4) That, pursuant to the general and established rules of construction, an insurance policy should be construed,, if ambiguous, in favor of the insured and in favor of coverage. (5) That the terms of the policy required payment of the loss not later than the 25th day of November 1953.”

Affirmed.

Footnotes

1

. Such argument is here quoted: “To thus construe the contract as the trial court has done would be to rewrite the exception and not give the correct meaning which common sense dictates as to the use of the word ‘entrust.’ In the second place, even if it be assumed, for the sake of argument, that the trial court was correct in its narrow interpretation of the word ‘entrust’ we believe, by the very testimony of the witness for the plaintiff, Powell, that custody and posses- • sion of the automobile was entrusted to the thief Davis and he was supposed to return the following day. Thus, Powell, ■ by entrusting the car to the thief Davis • who was to return the next day for the papers and insurance, thereby created an entrustment of the automobile within the terms and provisions of the exclusion so as to satisfy even the most strict construction.”