Furrer v. Yew Creek Logging Co.

• Decision Date: 25 January 1956
• Parties: Joseph J. FURRER, Appellant, v. YEW CREEK LOGGING COMPANY, a corporation, Respondent.
• Court: Oregon Supreme Court

Page 499

292 P.2d 499

206 Or. 382

Joseph J. FURRER, Appellant, v. YEW CREEK LOGGING COMPANY, a corporation, Respondent.

Supreme Court of Oregon, En Banc.

Argued and Submitted Dec. 8, 1955.

Decided Jan. 25, 1956.

William J. Moshofsky and John Gordon Gearin, Portland, for appellant. With them on the briefs were Koerner, Young, McColloch & Dezendorf, Portland.

Bruce Spaulding, Portland, for respondent. On the brief were Mautz, Souther, Spaulding, Denecke & Kinsey, Portland.

TOOZE, Justice.

This is an action to recover for property damage to and loss of use of a lumber truck belonging to plaintiff, Joseph J. Furrer, caused by the alleged negligence of defendant, Yew Creek Logging Co. The case was tried to a jury which returned a verdict for plaintiff in the sum of $9,738.98. From an order setting aside the verdict and judgment and granting a new trial, plaintiff appeals.

The case arose out of a collision occurring about 3 p. m., June 15, 1951, on state highway 34, which runs between Corvallis and Alsea, in Benton county, Oregon. The truck of plaintiff, a large roll-type lumber truck and tractor, was proceeding in a general westerly direction toward Alsea, and defendant's vehicle, a Ford pickup truck, was approaching from the opposite direction, moving east in the southerly lane of traffic. The highway is some 20 feet wide, with two lanes and gravel shoulders two feet wide on each side. At the time of the accident there was no painted center line, the highway having undergone some recent repairs, but the center was designated by the seam where the asphalt of the two lanes was joined together. The weather was warm and dry.

At a point about three miles east of Alsea the vehicles came together in a side-swipe collision, the left front wheel of the pickup striking the left front dual wheel of the larger truck. Both vehicles were thrown out of control. Defendant's truck rolled over and came to rest at the south edge of the highway some 39 feet from the point of impact, and plaintiff's vehicle was thrown off the north side of the highway and came to rest perpendicular to it on an embankment about 128 feet from the point of collision.

There was a sharp conflict between the parties concerning on which side of the highway's center the collision occurred, but there was evidence to support either contention, and the jury evidently concluded that the plaintiff was in his proper lane of traffic at the time.

After the collision plaintiff applied to his insurance carrier, Truck Insurance Exchange, and was given $4,850, in return for which he signed the following document:

'Loan Receipt

'$4,850.00

20 July 1951

'Received from Truck Insurance Exchange under Policy No. 691596, the sum of Four Thousand Eight Hundred Fifty and No/100 Dollars, ($4,850.00), solely as a loan and repayable only to the extent of any net recovery that Joseph J. Furrer may make from Yew Creek Lumber Company or Art Adams or from any other person, firm or corporation, on account of or in any way connected with the loss of or damage to a certain Diamond T, Motor No. NHB600-77494, occurring on or about the 15th day of June, 1951, on Highway 34 near Faloma, Oregon.

'As security for such repayment, Joseph J. Furrer hereby pledges to said Truck Insurance Exchange the said recovery, and it [sic] agrees, upon request of said Truck Insurance Exchange, to prosecute a claim or to enter and prosecute suit or action in its [sic] own name against Yew Creek Lumber Company or Art Adams, or such other person, firm or corporation, on account of such claim for loss and damage with all due diligence at the expense of and under the exclusive direction and control of said Truck Insurance Exchange.

'In consideration of the making of the aforesaid loan under the terms and conditions above stated, Joseph J. Furrer does hereby covenant and agree to and with said Truck Insurance Exchange, that it [sic] will neither make any claims nor institute or maintain any proceedings at law or in equity against said Truck Insurance Exchange for the purpose of recovering therefrom with respect to the aforesaid loss or damage.

'Executed in duplicate originals this 20 day of July 1951.

'[Sgd.] Joseph J. Furrer.'

Defendant filed a plea in abatement and answer to plaintiff's complaint wherein it denied its own negligence, alleged contributory negligence of plaintiff, and contended that this loan was in fact payment by the insurer, and for that reason the insurer was subrogated to the claim of plaintiff, was a reasl party in interest, and should be joined as a party plaintiff. The plea in abatement was heard by the court and decided contrary to defendant's contention. A trial on the merits was then had, resulting in a verdict and judgment as above stated. Defendant moved for a new trial, assigning as grounds this ruling upon the plea in abatement and six others. The motion was allowed, and from the memorandum opinion of the trial court it is apparent that the sole reason for its allowance was that the court was then of a different opinion concerning the necessity of joining the insurer as a party plaintiff from what it had been at the time it originally considered and denied the plea in abatement.

As a second ground for the motion defendant contends that the court committed error in law when it instructed the jury that there was no law in Oregon limiting the speed of motor vehicles. Defendant's position is that O.C.L.A. § 115-323(c), ORS 483.116(3), imposes a definite maximum speed of 45 miles per hour upon trucks of the type plaintiff was operating. It contends, therefore, that it was entitled to an instruction to the jury to this effect, because one of the issues in the case made by the pleadings was the question of contributory negligence of plaintiff's driver, based on alleged excessive speed, and that there was evidence tending to show that this alleged maximum speed was exceeded by plaintiff at the time of the accident.

Although five additional grounds were presented in defendant's motion, one of which was abandoned entirely in this court, we feel that they do not present questions which merit discussion here. Two of them assert misconduct on the part of plaintiff's counsel, and the remaining two contend that the damages were based upon insufficient evidence. An examination of the record shows that these contentions are not well taken.

Turning our attention first to the 'loan receipt,' the effect of which is the principal bone of contention on this appeal, it appears that the questions raised concerning it are matters of first impression in this state, although courts of other jurisdictions, both state and federal, have dealt with them on numerous occasions.

Some of these courts criticize the loan receipts and the motives of parties using them, holding them to be a subterfuge and a sham, disguishing the true character of the transaction between insured and insurer. Purdy v. McGarity, 262 App.Div. 623, 30 N.Y.S.2d 966; Scarborough v. Bartholomew, 263 App.Div. 765, 30 N.Y.S.2d 971; Yezek v. Delaware, L. & W. R. Co., 176 Misc. 553, 28 N.Y.S.2d 35; Cleveland Paint & Color Co. v. Bauer Mfg. Co., 155 Ohio St. 17, 97 N.E.2d 545; Deming v. Merchants' Cotton-Press & Storage Co., 90 Tenn. 306, 17 S.W. 89, 13 L.R.A. 518; Lancaster Mills v. Merchants' Cotton-Press & Storage Co., 89 Tenn. 1, 14 S.W. 317, 24 Am.St.Rep. 586. Also see American Alliance Ins. Co. v. Captial Nat. Bank, 75 Cal.App. 2d 787, 171 P.2d 449; Luckenbach v. McCahan Sugar Refining Co., 248 U.S. 139, 39 S.Ct. 53, 63 L.Ed. 170, 1 A.L.R. 1528; First Nat. Bank v. Lloyd's of London, 7 Cir., 116 F.2d 221, 132 A.L.R. 607; Phillips v. Clinton Mfg. Co., 204 S.C. 496, 30 S.E.2d 146, 157 A.L.R. 1261.

Others, however, feel that these agreements should be enforced to the extent contemplated by the parties, and when a loan is intended, that effect will be given to them. Luckenbach v. W. J. McCahan Sugar Refining...