Eisele v. Knight

• Decision Date: 12 June 1963
• Citation: 234 Or. 468,382 P.2d 416
• Parties: Francis G. EISELE, Respondent, v. Richard Preston KNIGHT, Defendant, Northern Insurance Company, a corporation, Appellant.
• Court: Oregon Supreme Court

Page 416

382 P.2d 416

234 Or. 468

Francis G. EISELE, Respondent, v. Richard Preston KNIGHT, Defendant, Northern Insurance Company, a corporation, Appellant.

Supreme Court of Oregon, Department 2.

Argued and Submitted April 3, 1963.

Decided June 12, 1963.

William C. Grant, Portland, argued the cause for appellant. With him on the briefs were Hershiser, McMenamin, Blyth & Jones, Portland.

Richard F. Porter, Portland, argued the cause for respondent. With him on the brief was Ben T. Gray, Portland.

Before McALLISTER, C. J., and PERRY, O'CONNELL, DENECKE and LUSK, JJ.

DENECKE, Justice.

The plaintiff garnished Northern Insurance Company, alleging that Northern owed a debt to the defendant which arose because the garnishee had liability insurance covering the defendant. The plaintiff had previously secured a judgment for damages for personal injuries against the defendant. The trial court, sitting without a jury, held there was coverage.

Defendant Richard Knight was the son of Mrs. Von C. Jensen and a stepson of Mr. Von C. Jensen. He became 16 in September, 1958. He was living with the Jensens at that time. At that time and for several prior years the Jensens had a liability policy with Northern, insuring the Jensens and the members of their household while driving the Jensen's three cars, or other cars. In 1956 Mr. Jensen learned that his stepson was driving cars belonging to other persons. He inquired of his agent, Mr. Slade, and was told that the stepson was covered while driving such cars.

In June, 1959, Northern issued a new liability policy to the Jensens. It did not cover Knight while driving cars not owned by the Jensens. The testimony of Mr. Jensen and Mr. Slade concerning the circumstances surrounding the issuance of this policy is not in accord. Mr. Jensen testified that he assumed the new policy covered his stepson while he was driving any car. He stated that Mr. Slade never told him to the contrary. Mr. Slade testified that he told Mr. Jensen that his stepson was not covered by the new policy and that this change was made at Mr. Jensen's request.

According to Mr. Slade, when the policy was up for renewal in 1959, Northern inquired whether Richard Knight had a driver's license. Upon inquiry it was found that he did. Mr. Slade explained to Mr. Jensen that his rate would be more than doubled to cover his stepson. Mr. Slade testified that Mr. Jensen told him that his stepson would be away at school and he did not wish him covered. Therefore, the policy here involved was issued.

Mr. Jensen testified that he 'imagined' that he discussed the new policy issued in 1959 with Mr. Slade, but he did not remember what he said, if the policy was discussed. Mr. Jensen was positive, however, that Mr. Slade did not tell him that his stepson was not covered under the new policy. Mr. Jensen 'assumed that Richard was covered.'

The allegations in a garnishment proceedings are in the nature of plaintiff's complaint. Oregon Creditors, Inc. v. Oliver, 125 Or. 307, 313, 267 P. 52. The plaintiff stated in his allegations that Northern Insurance Company had a policy outstanding on the date of the accident 'covering Von C. Jensen and Mary W. Jensen and such other persons that they should permit and allow to drive their said car * * * [and] Richard Preston Knight was operating an automobile covered by said policy.' The form of the policy issued was made part of the pleadings and its contents were never disputed. Plaintiff did not question that according to the terms of the policy Knight was covered only when driving a car owned by the Jensens. This was the only theory advanced in the pleadings, i. e., Knight was covered by the terms of the policy issued as he was driving a Jensen-owned car.

However, the undisputed fact is that Knight was not driving a Jensen-owned car at the time of the accident. He was driving a car owned by the Crawfords. The record...