Perin v. Peuler, No. 24

• Court: Supreme Court of Michigan
• Writing for the Court: BLACK; KAVANAGH, C. J., and SOURIS, SMITH, and ADAMS, JJ., concurred with BLACK; KELLY; DETHMERS, J., concurred with KELLY; O'HARA
• Citation: 130 N.W.2d 4,373 Mich. 531
• Docket Number: No. 24
• Decision Date: 02 September 1964
• Parties: Florenda PERIN, Plaintiff and Appellant, v. Henry PEULER et al., Defendants and Appellees.

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130 N.W.2d 4 373 Mich. 531 Florenda PERIN, Plaintiff and Appellant,
v.
Henry PEULER et al., Defendants and Appellees. No. 24. Supreme Court of Michigan. Sept. 2, 1964.

[373 Mich. 534]

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Mitts, Smith & Haughey, Grand Rapids, for plaintiff and appellants.

Cholette, Perkins & Buchanan, Grand Rapids, for defendants.

Before the Entire Bench.

BLACK, Justice.

ON REHEARING

This case (docket No. 49783), having been ordered reheard, was resubmitted July 17, 1963 and again on April 9, 1964, together with the like case of Tortora v. General Motors Corporation (docket No. 49435), 130 N.W.2d 21. In the main Tortora has presented the same questions as have been briefed and argued to the Court on rehearing of the instant case. Tortora, fully tried to court and jury as that case was, should be read and considered with what is to follow. See opinions of the Tortora case, post 22.

Our previous disagreement (Perin v. Peuler, 369 Mich. 242, 247, 119 N.W.2d 552) gave birth to a new issue defendants' counsel would have us decide on rehearing. That issue, headed 'Statement of Additional Question Involved,' is submitted this way:

'There is no liability for negligent entrustment of an automobile by an owner whose liability is purely statutory under the provisions of the civil liability act, MSA 9.2101.'

While the quoted issue--not having been raised below--is not properly here, the signers of this opinion are agreed that the Court should decide it, the better to quiet the fears of contemporary Cassandras that a new right of action may have been born out of legal wedlock when the majority opinions of Elliott v. A. J. Smith Contracting Co., 358 Mich. 398, 100 N.W.2d 257 and Perin v. Peuler, supra, were handed down.

That we may in apt circumstances determine a new legal issue, provided such issue has been adequately [373 Mich. 535] presented and briefed, was settled again when Dation v. Ford Motor Co., 314 Mich. 152, 22 N.W.2d 252, came to unanimous decision. See cases cited therein at 159, 22 N.W.2d 252. And a firm determination of the quoted issue should bring a measure of overdue aid, not only to an understandably perplexed profession but also to Michigan's beset and dismally failing effort to prevent traffic carnage. It may, at very least, awaken some over-indulgent parent to the fact that, from the beginning in instances disclosed as at bar, his personal distinguished from vicarious toes have been exposed to the heavy bootstep of liability whether he is owner or lender of the motor car that known-to-be unfit son or daughter has driven to the causally actionable injury of another. We proceed accordingly.

The undersigned hold, on rehearing:

1. That the common law duty of the owner or lender of a motor vehicle, to refrain from placing it in the hands of a known unfit or incompetent driver for operation on our public highways, stands unimpaired by Michigan's 55 year old owner-liability statute (P.A.1909, No. 318, § 10, sub. 3, p. 780; see, currently, C.L.S.1956, § 257.401; Stat.Ann.1960 Rev. § 9.2101). When and if the legislature decides to eliminate

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the common law right of action which arises from negligent entrustment of a motor car, doubtless it will say so by reasonably explicit enactment. That body has not done so, as yet, as herein cited Tanis, Elliott and Haring plainly tell us.

When this Court--in 1933--unequivocally applied such common law rule to a motor car lender (Tanis v. Eding, 265 Mich. 94, 25 N.W. 367); a full quarter century after Michigan's owner-liability statute had become effective, it necessarily came to the same conclusion as did the Iowa Supreme Court some years later in Krausnick v. Haegg Roofing Co., 236 Iowa 985, 20 N.W.2d 432, 163 A.L.R. 1413, 1417. Krausnick is cited in direct support of the new text of [373 Mich. 536] 8 Am.Jur.2d, Automobiles and Highway Traffic, § 573, 'Effect of entrusting vehicle to incompetent or reckless driver,' pp. 125, 127:

'Even though in some states statutes have been enacted which have the general effect of making the owner of a motor vehicle liable for injuries negligently inflicted as result of the use or operation of such vehicle by persons other than the owner himself, if the operation of the vehicle was within the scope of the owner's consent, the common-law liability for entrusting the operation of one's motor vehicle to a known incompetent driver is not superseded thereby.' (Italics by present writer.) ¹

We adopt such text and hold that the quoted new issue should be answered in the negative.

2. That this Court should, on rehearing, definitely reaffirm its adherence to the rule adopted in Tanis, supra, quoted as follows (Tanis, 265 Mich. at 96, 97, 251 N.W. at 367):

'The precise question is new in this state. The overwhelming weight of authority supports the following:

"The general rule * * * that an owner of an automobile is not liable for the negligence of one to whom the automobile is loaned has no application in cases where the owner lends the automobile to another, knowing that the latter is an incompetent, reckless or careless driver and likely to cause injuries to others in the use of the automobile; in such cases the owner is held liable for injuries caused by the borrower's negligence on the ground of his personal negligence in intrusting the automobile to a person who he knows is apt to cause injuries to another in its use.' 36 A.L.R. 1148.' ²

There is nothing startling about this rule of personal liability, whether the entrusting person is [373 Mich. 537] 'owner' of the entrusted chattel or not. This Court reaffirmed it, carefully and unanimously no more than 18 months ago, in Haring v. Myrick, 368 Mich. 420, 424, 425, 118 N.W.2d 260. On that occasion the Court applied, to a case where the defendant automobile owner was charged with negligent entrustment. Restatement's pertinent common law text (Haring, 368 Mich. at 426, 118 N.W.2d 260). To make this perfectly plain, there is presented below what 7 presently seated Justices then attested, without reservation (423, 118 N.W.2d 261):

'There is another circumstance, however, where liability at common law is imposed upon the owner of a chattel for injuries resulting from its negligent use by another. Such liability arises when the owner permits an incompetent or or inexperienced person to use his chattel with knowledge that such use is

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likely to cause injuries to others. Apart from such statutes as that cited above, the owner of a motor vehicle may not entrust it to such a person without liability for resulting negligent injuries to others. 36 A.L.R. 1137, 1148; Naudzius v. Lahr, 253 Mich. 216, 229, 234 N.W. 581, 74 A.L.R. 1189, 30 NCCA 179; Tanis v. Eding, 265 Mich. 94, 96, 251 N.W.367, and Elliott v. A.J.Smith Contracting Co., 358 Mich. 398, 414, 100 N.W.2d 257. In such circumstances, the owner's liability is also in part vicarious for it cannot arise unless the person entrusted with the automobile uses it negligently; but, the primary basis for the owner's liability is said to be his own negligence in permitting its use by an incompetent or inexperienced person with knowledge of the probable consequences.'

Before proceeding to divisions 3 and 4, infra, some additional comment upon Tanis' rule is in order.

First we note that Tanis' adoption thereof was in the setting of a case where the defendant lender--a car dealer--was not, technically at the time of Sophie Tanis' injury, 'owner' of the car Vredeveld had turned in to him on an otherwise completed car deal. Nonetheless this Court applied what it said was a rule supported by 'the overwhelming weight of authority'[373 Mich. 538] ; a rule which applies to mere lenders as well as to owner-lenders. Thus the plaintiff in negligence may rely upon the owner-liability statute to hold the owner responsive for negligent operation of the latter's motor vehicle by another, and at the same time rely upon the quoted rule to hold the owner responsive for personal negligence arising out of negligent entrustment of such motor vehicle; provided of course such statutorily imputed negligence and such personal negligence are causally connected with the plaintiff's injury. Such reasoning merely pursues Elliott, supra, 358 Mich. at 411, 100 N.W.2d at 260:

'What has been said here? Simply that plaintiff has 2 theories for defendant's liability: (1) defendant's alleged negligence in entrusting a motor vehicle to an employee unfit to be at the wheel, and (2) defendant's vicarious liability for the negligence of an employee acting within the scope of his employment. These are 2 perfectly valid theories.'

For an instance where precedent conduct of an entrustee of a motor car, if that conduct was known to the entrusting owner at the time of or during continuation of the entrustment, may--if causally connected--make a jury question of personally actionable negligence on the part of such entrusting owner, consider the Tortora case, supra.

Second, the entrustment rule definitely requires proof of knowledge (or of facts giving rise to an inference of knowledge), on the part of the owner or lender, of the unfitness or incompetence of the entrusted driver. The plaintiff must, perforce, prove the essentials of what by his allegation has become his burden. As the supreme court of Ohio concluded, in the factually like case of Gulla v. Straus, 154 Ohio St. 193, 93 N.W.2d 662, 666:

'In a case such as the instant one, the burden is upon the plaintiff to establish that the motor vehicle [373 Mich. 539] was driven with the permission and authority of the owner; that the entrustee was in fact an incompetent driver; and that the owner knew at the time of the entrustment that the entrustee was incompetent or unqualified to operate the vehicle, or had knowledge of such facts and circumstances as would imply knowledge on the part of the owner of such incompetency.'

Third, in addition to the requirement of precedent knowledge (on the part of...