Jacobson v. Aetna Cas. & Sur. Co.

• Citation: 46 N.W.2d 868,233 Minn. 383
• Decision Date: 16 March 1951
• Docket Number: No. 35383,35383
• Parties: JACOBSON et al. v. AETNA CASUALTY & SURETY CO.
• Court: Supreme Court of Minnesota (US)

Page 868

46 N.W.2d 868

233 Minn. 383

JACOBSON et al. v. AETNA CASUALTY & SURETY CO.

No. 35383.

Supreme Court of Minnesota.

March 16, 1951.

Syllabus by the Court

1. Constructive possession of personal property by its owner exists where the owner has Intentionally given the Actual possession--namely, the direct physical control--of the property to another for the purpose of having him do some act For the owner to or with the property; that is to say, constructive possession exists wholly in contemplation of law without possession in fact.

2. Where the owner retains constructive possession, the party to whom bare physical control of the property has been entrusted for the owner's purpose does not have possession but only custody.

3. Where language limiting the obligation of the insurer is ambiguous and susceptible of more than one meaning, the rule requiring a liberal construction in favor of the insured is one of selectivity of meaning and not one of obliteration of all meaning.

4. If the owner voluntarily surrenders physical control of his automobile to a third party with the intent that the recipient third party shall exercise exclusive dominion or control of the vehicle, temporarily or otherwise, solely or primarily for such third party's direct use or purpose,--as distinguished from a use or purpose for the direct benefit of the owner,--then the insured has voluntarily surrendered possession within the meaning of the exclusionary clause of the policy; and there is no insurance coverage.

5. It is immaterial that the owner, in voluntarily surrendering physical control, may have been motivated by a desire for the indirect benefit of making a sale if such surrender was coupled with the intention of giving the recipient thereof the exclusive right to exercise such physical control for the recipient's own personal use or advantage, such as a use to enable the recipient to determine if the vehicle is a desirable one to purchase.

Johanson, Winter & Lundquist, Wheaton, for appellant.

Carl J. Eastvold, Ortonville, for respondent.

MATSON, Justice.

Defendant appeals from a judgment awarded plaintiff for loss caused by theft of an automobile.

We are concerned with the sole question of What constitutes a voluntary parting or surrender of possession within the meaning of the Exclusionary clause of an insurance policy issued by defendant to plaintiff to protect him from damage or loss caused by the theft, larceny, robbery, or pilferage of an automobile. The exclusionary clause is as follows: '(d) Under the Theft, Larceny, Robbery or Pilferage Coverage (if such Policy covers these perils)--loss suffered by the Insured in case He voluntarily parts with title to or possession of any automobile at risk hereunder, whether or not induced so to do by any fraudulent scheme, trick, device or false pretense, or otherwise;' (Italics supplied.)

The facts have been stipulated and are not in dispute. Late on Saturday afternoon on August 13, 1949, plaintiff, who operates a sales garage in Ortonville, was approached by a motorist who falsely represented himself to be W. R. Brereton of Madison, Wisconsin, and who, because he was allegedly in a hurry to continue his journey, wished to trade in his disabled 1936 Oldsmobile for a later model of the same make. A tentative deal was made whereby plaintiff agreed to accept the disabled car plus $375 in payment of a 1939 Oldsmobile which plaintiff owned. Since plaintiff wanted to examine the disabled car more carefully and since it was then almost 5 p.m. Saturday evening, plaintiff refused to complete the transaction until the next Monday morning. A check for $375, showing W. R. Brereton as the maker, was given plaintiff, but neither party gave a bill of sale or transfer of title for either automobile. The prospective buyer requested the use of plaintiff's 1939 Oldsmobile until the deal was closed so as to try it out and drive it over the week end. Plaintiff consented and voluntarily delivered the 1939 Oldsmobile to the prospective purchaser, who thereafter had physical control of the vehicle over the week end, subject to the understanding that it would be returned the following Monday morning for completion of the deal.

On Monday morning, the person representing himself as W. R. Brereton failed to appear at, or return the 1939 Oldsmobile to, plaintiff's place of business. Upon investigation, plaintiff discovered that the 1936 Oldsmobile had been stolen from W. R. Brereton and that the check for $375 was worthless. The 1939 Oldsmobile, reasonably worth $500, was never returned to plaintiff.

The trial court found that at the time the 1939 Oldsmobile was stolen the plaintiff had not parted with the title or possession of the automobile within the terms of the insurance policy and ordered judgment for plaintiff for $500, together with costs and disbursements. Defendant, whose motion for a new trial was denied, appeals from the judgment. It is admitted that plaintiff never parted with the title and that his delivery or surrender of the physical control of the car was induced by fraud. We are concerned therefore solely with the question of whether plaintiff, as defendant contends, voluntarily parted with the possession of the automobile within the meaning of the policy's exclusionary clause. Plaintiff asserts that the person representing himself as W. R. Brereton never came into Possession of the automobile within the strict meaning of that term, but only acquired Custody of the automobile, and that plaintiff at all times retained Constructive possession. Obviously, the controlling issue narrows itself down to the question of what meaning is to be ascribed to the word Possession as used in the exclusionary clause of the insurance policy.

Although cases from other jurisdictions support the views of both defendant and plaintiff, ¹ this court has not heretofore had occasion to define the word Possession as used herein.

The word Possession has many shades of meaning and, as applied to a variety of facts, is not capable of one exact definition. In National Safe Deposit Co. v. Stead, 232 U.S. 58, 67, 34 S.Ct. 209, 212, 58 L.Ed. 504, 509, Mr. Justice Lamar said: '* * * there is no word more ambiguous in its meaning than Possession. It is interchangeably used to describe actual possession and constructive possession which often so shade into one another that it is defficult to say where one ends and the other begins.'

Ambiguity in the meaning of the word Possession dates from the introduction into the law of the concept of Constructive possession. Disputes as to the meaning of possession stem either from an inadvertent disregard of the origin and scope of the constructive-possession concept or from a placing of the word Possession in a context which creates or leaves a doubt as to whether Actual--namely, possession in its ordinary or original sense--or Constructive possession is meant. It would seem that an understanding of the inception of the term Constructive possession would eliminate any ambiguity in the meaning of Possession as used in the instant case. At common law, the idea developed that for larceny there must be a trespass, A taking from the possession...