280 F.2d 13 (9th Cir. 1960), 16394, Mayflower Ins. Exchange v. Gilmont

Docket Nº:16394.
Citation:280 F.2d 13
Party Name:MAYFLOWER INSURANCE EXCHANGE, Appellant, v. Robert Dean GILMONT, Rose Marie Gilmont and Ronald A. Watson, Guardian ad Litem for Susan Rose Gilmont, a minor, Robert Russell Gilmont, a minor, and Norman I. Gilmont, a minor, Appellees.
Case Date:June 21, 1960
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 13

280 F.2d 13 (9th Cir. 1960)

MAYFLOWER INSURANCE EXCHANGE, Appellant,

v.

Robert Dean GILMONT, Rose Marie Gilmont and Ronald A. Watson, Guardian ad Litem for Susan Rose Gilmont, a minor, Robert Russell Gilmont, a minor, and Norman I. Gilmont, a minor, Appellees.

No. 16394.

United States Court of Appeals, Ninth Circuit.

June 21, 1960

Page 14

Arthur S. Vosburg, Frank McK. Bosch and Vosburg, Joss, Hedland & Bosch, Portland, Or., for appellant.

Krause Lindsay, Nahstoll & Kennedy, Jack L. Kennedy, Holger M. Pihl, Jr., Portland, Or., for appellee.

Before STEPHENS, JERTBERG and MERRILL, Circuit Judges.

MERRILL, Circuit Judge.

Appellant Mayflower Insurance Exchange has brought this action to secure a declaration of its rights and obligations under a policy of insurance issued by it to one McKinzie in Portland, Oregon, on April 16, 1957. Appellees Gilmont were injured on June 8, 1957, when the automobile in which they were riding collided with that driven by McKinzie. They assert negligence on the part of McKinzie and liability on the part of appellant under its insurance policy.

This action is founded upon the contention of appellant that the insurance policy is void since its issuance resulted from fraudulent misrepresentations of fact by McKinzie. Judgment of the District Court, pursuant to jury verdict, was for appellees. Federal jurisdiction is founded upon diversity of citizenship.

The record establishes the following facts: On April 16, 1957, at the close of the business day in Portland, Oregon, McKinzie walked into the office of an insurance agency representing Mayflower and advised their office manager that he wished to secure an automobile liability policy covering a car which he had purchased earlier in the day from a used car dealer. McKinzie had never had any previous dealings with the agency or with its manager or with Mayflower. He had been referred to the agency by the owner of the used car lot who had already called the agency and furnished some information. Mayflower's procedure required of its agents that certain information be obtained, and a form to be filled out in triplicate had been furnished the agency for this purpose. The manager was alone in the office and proceeded to ask questions of McKinzie and, from the answers given to him, filled in the necessary blanks upon the application form. All of the questions appearing upon the application form were read aloud and McKinzie orally made the answers, which in turn were written down on the application by the manager. Among the questions so asked and the answers so supplied were the following:

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'Q. Have you had a license revoked or suspended? A. No.

'Q. Have you received any driving charges, citations or fines (not parking) in the past three years? A. No.

'Q. Name of previous insurer? A. None.'

Following the automobile accident of June 8, 1957, Mayflower, in the course of its investigation, learned for the first time that these answers were false. The investigation disclosed that McKinzie had has his license suspended in the State of Oregon; that he had had a traffic violation in the State of Oregon and three in the State of California within three years prior to application; that he had had prior insurance with other companies.

Mayflower assigns as error the giving of an instruction dealing with the subject of negligence on its part in securing from McKinzie the information which, it now claims, constituted misrepresentations of fact.

The District Court instructed that an issue had been raised 'as to whether the agent at the time he took the answers from McKinzie acted with ordinary reasonable care for the protection of his own company.' Upon the law the jury was instructed:

'Therefore, if you should find from the evidence that the plaintiff, acting through its agent, was careless and did not act as a reasonably prudent person, being an insurance company, in obtaining the answers from McKinzie while filling out the application for insurance by Mr. McKinzie, and thereby...

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