Bird v. Central Mfg. Ins. Co.

• Decision Date: 06 January 1942
• Citation: 168 Or. 1,120 P.2d 753
• Parties: BIRD <I>v.</I> CENTRAL MANUFACTURERS MUTUAL INSURANCE CO.
• Court: Oregon Supreme Court

168 Or. 1

120 P.2d 753

BIRDv.

CENTRAL MANUFACTURERS MUTUAL INSURANCE CO.

Supreme Court of Oregon.

Argued December 5, 1941.

Affirmed January 6, 1942.

Bailment — Automobiles — Special ownership

1. Where company owning automobile loaned the automobile to its sales manager to be used by him, there was a "bailment" which created in the sales manager, as "bailee," a "special ownership" in the automobile, with the company as the "general owner."

Insurance — Automobiles — Insurable interest

2. One has an "insurable interest" in property, such as an automobile insured against loss by collision or upset, where he derives a benefit from the existence of the property or would suffer loss from its destruction.

Insurance — Automobiles — Insurable interest

3. To constitute an "insurable interest" in property, such as an automobile insured against loss by collision or upset, it is sufficient that the insured is so situated with reference to the property that he would be liable to loss should it be injured or destroyed by the peril against which it is insured.

Insurance — Automobiles — Insurable interest

4. A corporation's sales manager who borrowed corporation's automobile had an "insurable interest" in the automobile which could be insured under policy insuring automobile against loss by collision or upset.

Insurance — Bailment — Automobiles

5. Where bailee of automobile informed insurer's agent that he desired to insure automobile against collision or upset, and agent, without making inquiry as to ownership, or without any representation having been made to him in respect thereto, issued policy containing provision that automobile was fully paid for by bailee, but policy was not delivered to bailee until after automobile accident, it was not necessary for bailee, before bringing action on policy, to seek reformation of policy, since there was no "mutual mistake" requiring reformation.

Insurance — Reformation

6. Reformation of a policy may be had for fraud, inequitable conduct, or mutual mistake and, in some instances, when the mistake was not mutual, if the policy or contract, as written, does not express the actual or real agreement of the parties, but where the policy was not delivered until after the damage had been sustained, and new terms, not agreed on, have been inserted into the policy by the insurer's agent, the insured has a plain, speedy, and adequate remedy at law to enforce, under the policy, the oral contract entered into by him with such agent.

Insurance — Automobiles — Oral contracts

7. The essential elements of an oral contract for insuring an automobile against loss by collision or upset, were the subject matter to be insured, the risk insured against, the commencement and period of risk undertaken, the amount of the insurance, and the amount of the premium and the time in which it is to be paid.

Insurance — Contract to insure

8. Executory contracts to insure in the future are valid and enforceable, although oral, if all other essentials of a valid contract are present.

Insurance — Oral insurance contract

9. In the absence of a statutory or charter provision to the contrary, an oral or parol contract of insurance which is otherwise binding, and which contains all elements essential to a contract, is valid.

Insurance — Attorney's fee

10. On appeal by insurer from a judgment in favor of insured on a policy insuring an automobile against loss by collision or upset, insured, on affirmance of the judgment, was entitled to a reasonable attorney's fee for services performed on the appeal.

Insurance — Attorney's fee

11. A sum of $150 was a reasonable attorney's fee for services performed by insured's attorney on insurer's unsuccessful appeal from a judgment in favor of the insured in an action on a policy insuring an automobile against loss by collision or upset.

                  See 29 Am. Jur. 295
                  8 C.J.S., Bailments, § 20b
                

Before BAILEY, LUSK, RAND, ROSSMAN and BRAND, Associate Justices.

Appeal from Circuit Court, Marion County.

L.H. McMAHAN, Judge.

Action by Claud E. Bird against the Central Manufacturers Mutual Insurance Company to recover on a policy insuring an automobile against loss by collision or upset. From a judgment in favor of the plaintiff, the defendant appeals.

AFFIRMED.

Walter C. Winslow, of Salem, for appellant.

R.W. Skopil and Lawrence N. Brown, both of Salem, for respondent.

RAND, J.

This is an action upon a policy issued by the defendant to plaintiff, insuring an automobile against loss by collision or upset. The insured automobile belonged to the Salem Automobile Company for whom the plaintiff, who obtained the insurance, was sales manager. The car had been loaned to the plaintiff, who was about to take a trip to the East, on condition that he would have it fully insured and be personally liable for any injury or damage which it might sustain while in his possession.

In compliance with this agreement, the plaintiff called over the telephone one G.A. Coffey, an agent of the defendant company, whose place of business was in Salem, and informed him that he was about to take a vacation trip to the East and that he wanted to insure "a certain automobile we had at the place", and gave Coffey the motor and serial numbers of the car and asked him to look it over.

Coffey was a witness for plaintiff and testified that he was the agent of the defendant company and had authority to issue insurance policies on its behalf. He admitted that he had the telephone conversation related by the plaintiff and that he went to the garage of the Salem Automobile Company where this particular car was pointed out to him; that he examined it, took the serial and motor numbers, looked at the speedometer and saw that it indicated less than 100 miles of travel, and, without making any inquiry as to its ownership and without having any statement or representation made to him in respect thereto, he says that he assumed that the plaintiff was the owner of the automobile and issued the policy and inserted therein the plaintiff's name as the person insured. However, no delivery of the policy was made until after plaintiff's return from the East. On the morning next following the telephone conversation and Coffey's inspection of the car but before starting on his trip, plaintiff went to Coffey's office and made a part payment of the premium and obtained a receipt therefor and at said time was assured by Coffey that the car was then fully insured for the term of one year from and after June 14, 1939, but plaintiff was not informed as to any of the terms or conditions which were to be inserted in the policy and was not informed of any of such terms or conditions until after he had returned to Salem and the damages had been sustained as hereinafter stated.

While plaintiff was returning from the East and shortly before reaching Salem, one of the rear tires blew out and the car was overturned and partially demolished. Notice thereof was duly given to defendant's said agent who, at said time, delivered the policy to the plaintiff. The defendant then sent an adjuster to inspect the car and make an adjustment, but the defendant has ever since refused to pay for the damage or any part thereof, and based its refusal upon the ground that the plaintiff was not the owner of the car at the time it was insured. Thereupon, the plaintiff settled with the Salem Automobile Company and paid the amount of the damage sustained by the automobile, and brought this action to enforce payment under the policy.

The policy was written on one of defendant's printed forms and contains the following stipulations:

"The automobile described is fully paid for by the insured, and there is no lien, mortgage or other encumbrance, except as follows: No Exceptions."

"This policy does not apply: * * * (c) if the interest of the insured in the automobile is or becomes other than as stated in this policy without the written consent of the company; * * *

"No notice to any agent, or knowledge possessed by any agent or by any other person shall be held to effect a waiver or change in any part of this policy nor estop the company from asserting any right under the terms of this policy; nor shall the terms of this policy be waived or changed, except by endorsement issued to form a part hereof, signed by the executive officer or representative of the company. * * *

"By acceptance of this policy the insured agrees that the statements in the declarations are his agreements...