Milburn v. Federated Mut. Implement & Hardware Ins. Co. of Owatonna, Minn.

• Decision Date: 09 February 1960
• Docket Number: No. 38609,38609
• Citation: 349 P.2d 644
• Parties: R. Kenneth MILBURN, d/b/a Ken Milburn Ford, Plaintiff in Error, v. FEDERATED MUTUAL IMPLEMENT AND HARDWARE INSURANCE COMPANY OF OWATONNA, MINNESOTA, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 644

349 P.2d 644

1960 OK 26

R. Kenneth MILBURN, d/b/a Ken Milburn Ford, Plaintiff in Error, v. FEDERATED MUTUAL IMPLEMENT AND HARDWARE INSURANCE COMPANY OF OWATONNA, MINNESOTA, Defendant in Error.

No. 38609.

Supreme Court of Oklahoma.

Feb. 9, 1960.

Syllabus by the Court.

Where an insured voluntarily parts with the custody or control of an automobile he cannot recover for its theft by the person to whom he entrusted the automobile under an insurance policy which provides that 'the policy does not apply under any coverage loss resulting from either the insured voluntarily parting with title and possession of any automobile as induced so to do by any fraudulent scheme, trick, device, false pretense, or embezzlement, conversion, secretion, theft, larceny, robbery or pilferage committed by any person including any employee, entrusted by the insured with either custody or possession of the automobile,' and, where a petition shows on its face that insured so parted with custody or possession of an automobile, it was not error for the trial court to sustain a demurrer thereto.

Appeal from the District Court of Carter County; Kenneth Shilling, Judge.

Action to recover on an insurance policy for the alleged theft of an automobile. From an order sustaining a demurrer to the petition, plaintiff appeals. Affirmed.

Ritter & Collins, by T. Fred Collins, Ardmore, for plaintiff in error.

W. J. Williams, Williams, Williams & Williams, Ardmore, for defendant in error.

JOHNSON, Justice.

This action was commenced by R. Kenneth Milburn d/b/a Ken Milburn Ford, against the Federated Mutual Implement and Hardware Insurance Company of Owatonna, Minnesota, to recover for the claimed loss of an automobile allegedly covered by the company's policy.

The amended petition alleged payment of the premium and issuance of a policy to plaintiff which, among other things, contained an exclusion clause. This exclusion clause provided:

'The Policy Does Not Apply: Under any coverage--to loss resulting from either the insured voluntarily parting with title and possession of any automobile as induced so to do by any fraudulent scheme, trick, device, false pretense, or from embezzlement, conversion, secretion, theft, larceny, robbery or pilferage committed by any person including any employee, entrusted by the insured with either custody or possession of the automobile.'

The petition in substance further alleged that while the policy was in force one John Lawrence Lewis contrived and designed a fraudulent scheme to defraud the plaintiff out of an automobile, wherein he, on the false pretense of purchasing a new automobile from the plaintiff, through a fraudulent scheme caused the plaintiff to let him have a new automobile, including constructive possession and custody; that by reason thereof and on account of the larceny committed by Lewis, the plaintiff sustained the loss of a new car valued at $3,990; that proof of said loss was made but that the defendant refused to pay the said amount due the plaintiff under the terms of the policy.

The petition closed by the usual prayer for relief.

A demurrer to the petition was interposed by the defendant company. The demurrer was sustained, resulting in this appeal.

Plaintiff's contention is that the loss sustained by him as the insured resulted from larceny, and larceny not being possible to commit under the law of Oklahoma in the manner defined by the exclusion clause of the policy, coverage should be afforded the insured. On the other hand, the defendant contends that where an insured voluntarily parts with the custody or control of an automobile he cannot recover for its theft by the person to whom he entrusted the automobile under an insurance policy which provides that 'the policy does not apply under any coverage to loss resulting from either the insured voluntarily parting with title and possession of any automobile as induced so to do by any fraudulent scheme, trick, device, false...