Holland America Ins. Co. v. Baker

• Decision Date: 17 December 1965
• Docket Number: No. 39723,39723
• Citation: 139 N.W.2d 476,272 Minn. 473
• Parties: HOLLAND AMERICA INSURANCE COMPANY, Appellant, v. James W. BAKER, et al., Respondents.
• Court: Minnesota Supreme Court

Page 476

139 N.W.2d 476

272 Minn. 473

HOLLAND AMERICA INSURANCE COMPANY, Appellant, v.James W. BAKER, et al., Respondents.

No. 39723.

Supreme Court of Minnesota.

Dec. 17, 1965.

Syllabus by the Court

1.The general requirements necessary to sustain the presence of a gift are delivery, intention, and absolute disposition by the owner of the thing he intends to give to another.While a presumption of a gift may be rebutted, it controls the decision where it is not displaced by substantial evidence.Held, under the record here the testimony of the pary claiming to have made the gift and the one claiming to have received it was uncontradicted and there was no direct evidence contrary to the presumption of the gift.

2.Where the trial court found who was the owner of automobile in question, our duty on appeal is to examine the evidence to determine whether there was a reasonable basis for such a finding.Held that there was evidence that would justify the finding of the trial court.

3.The overall purpose of a 'temporary substitute vehicle' clause in an insurance policy is to benefit the insured, and that clause must be construed liberally in favor of the insured.Held that there was evidence in the record here from which the trial court could determine that on June 6, 1963, the defendant insured (Baker) owned the 1955 Oldsmobile and that it was a replacement automobile insured under the policy of the company; also, that on said date Miss Jackson was the owner of the 1955 Buick which was driven as a temporary substitute automobile within the provisions of the company policy with her permission and consent on the date of the accident involved.

Mordaunt, Walstad, Cousineau & McGuire, Minneapolis, for appellant.

Smith, Munro, Orr & Milavetz, by Harlan E. Smith, Minneapolis, for Baker.

Ryan, Kain, Mangan, Westphal & Kressel, and James J. Moran, Minneapolis, for Plude.

FRANK T. GALLAGHER, C.

This is an appeal from a judgment of the district court.

The action was brought by Holland America Insurance Company against James W. Baker, its insured, and Leo Plude, who was involved in an accident with insured, for a declaratory judgment construing an automobile liability insurance policy to determine whether its 'temporary substitute' provision afforded protection to the insured during his operation of a nondescribed automobile.The trial court held in the affirmative.

On April 1, 1963, Max Gary, agent for the company, personally accepted an application for automobile insurance from the insured.The company writes only minimal risk coverage policies.The policy here involved was issued by the company after Gary was told that the State of Minnesota had required the insured to file an SR 22 form before a driver's license would be issued to him.The policy was effective from April 1, 1963, to October 1, 1963.Baker was the named insured and the described automobile covered under the policy was a 1952 Buick 4-door sedan.The policy limited bodily injury liability coverage to $10,000 for each person and $20,000 for each accident, and property damage liability to $5,000 for each accident.The total premium for the coverage extended by the company was $175 for 6 months.

The 1952 Buick described in the policy had been purchased by the insured on March 28, 1963, from Breitman Auto Company.On April 2, 1963, it was traded for a 1953 DeSoto.On April 8, 1963, the insured purchased a 1955 Oldsmobile from Riviera Motors.On April 26, that year, he traded the DeSoto for a 1956 Ford.Toward the end of April or early in May 1963he bought a 1955 Buick.

Only the facts surrounding the 1956 Ford, 1955 Buick, and 1955 Oldsmobile are imporant for our consideration.At the time of the accident in question, the 1956 Ford was beyond repair and had been repossessed by Breitman.This precludes any possibility of coverage or liability by the company for the Ford.

In the latter part of April 1963, Baker, the insured, was desirous of purchasing a car as a gift for Miss Jackson, his fiancee, so he contacted a Mr. Williams, the owner of the 1955 Buick.After preliminary negotiations were concluded, it appears that Baker and Miss Jackson agreed to purchase the car.The downpayment was $50, of which Baker paid about $35 and Miss Jackson paid the balance.Baker also agreed to pay $50 each payday until a total of $200 was paid.

Baker testified that he discussed the purchase of the Buick with Miss Jackson and indicated to her that he would do the 'bargaining' for the car in her behalf, but that the car was to become her car, not his.He said that he had an automobile at that time, the 1955 Oldsmobile which he had up until then been driving, and that the money he spent toward the payment on the 1955 Buick was a gift from him to Miss Jackson.Baker and Miss Jackson shared the expenses and upkeep on the Buick but it was kept at her residence.Baker testified that he usually had to get her permission to use it, and that he was teaching her to drive it.

Williams retained the title card to the Buick, but could not find it at the time he testified.He said that the only information he put on the back of the card was his name and signature as the seller and the date it had been purchased; that he sold the car to Baker, who took it away the same day, but that Baker never came back to get the registration card.

None of the foregoing purchases or trade-ins, nor the accident of June 6, 1963, which gave rise to this action, were reported by Baker to the company or the insurance agent.

On the day of the accident, Baker had advised Miss Jackson that his Oldsmobile was not in running order, and so he asked her if they could use the 1955 Buick for their outing.She agreed and was a passenger in the car, which Baker was driving, when the accident occurred.

Baker testified that he purchased the 1955 Oldsmobile and that it was the car he considered as his own.There was testimony that on June 6, 1963, it was about to throw a rod, the lifters were badly worn, and it was not in satisfactory working condition.Baker said that the last time he attempted to drive the Oldsmobile on or before June 6, 1963, he had driven within two blocks of Miss Jackson's house when the car stalled and wouldn't start again, so he had to have it pushed to her home; that he had not driven it since.

Miss Jackson testified that when she first looked at the Buick with Baker she told him that she wanted the car as her own.She testified that she thought she furnished about $15 of the downpayment; that she knew Baker owned the 1955 Oldsmobile which was in front of her house on June 6; that it could be 'turned on' but she didn't know if 'you could drive it'; that she did not have a driver's license but Baker was teaching her to drive; and that he told her on that day that the Oldsmobile was not running.She said that he asked her permission to use the Buick for a trip they were making that day because his car wasn't working and 'I told him yes.'She further testified that from the first time she saw the 1955 Buick until the accident of June 6, 1963, 'I thought it was mine,' because Baker said on the day he got the Buick that it was her car.She also said that he told her he was going to give it to her as a gift.She was asked on cross-examination if she didn't generally refer to the 1955 Buick as 'Jim's car.'She replied, 'No. I have always thought it was mine.He had a car.'

In that connection an attempt was made on cross-examination to impeach this testimony by a statement taken from the witness by James Pinkerton, an insurance adjuster.In explaining her reference in the statement to 'Jim's car,' Miss Jackson said that the adjuster asked questions; that the things he was writing were his words; that he did not take down verbatim what she said.

Sam Sims, a witness for the company, testified that in April 1963 while employed as a salesman for Riviera Motors, Minneapolis, he sold Baker a 1955 Oldsmobile, which he assumed was paid for in full.The attorney for defendant Plude notified the court that for the purposes of the trial he was willing to stipulate that Sims sold Baker the 1955 Oldsmobile in April 1963 and that he was still the owner of that car on June 6, 1963.

The trial court determined that a declaratory judgment should be entered that Baker owned a 1955 Oldsmobile on June 6, 1963, which was a replacement automobile insured under the terms of the company policy; that on said date Irene Jackson was the owner of a 1955 Buick that was being driven with her permission and consent by Baker; that it was a 'temporary substitute automobile' within the meaning of the policy; and that...