Safeco Ins. Co. of America v. Northwestern Mut. Ins. Co., 10432
| Decision Date | 29 May 1963 |
| Docket Number | No. 10432,10432 |
| Citation | 382 P.2d 174,142 Mont. 155 |
| Parties | SAFECO INSURANCE COMPANY OF AMERICA, a Corporation, and Harlan Dean, Plaintiffs and Appellants, v. NORTHWESTERN MUTUAL INSURANCE COMPANY, a corporation, and Bear Paw Sales and Service, Inc., a Corporation, Defendants and Respondents. |
| Court | Montana Supreme Court |
Hall, Alexander & Kuenning, Edward C. Alexander (argued orally), Great Falls, for appellants.
Smith, Boone & Rimel, Russell E. Smith (argued orally), Missoula, for respondents.
Anderson & Sorenson, Helena, amicus curiae.
This is a declaratory judgment action appealed from the district court of Hill County. In this cause Safeco Insurance Company of America, a corporation, whom we will hereafter refer to as Safeco, and Harlan Dean are the plaintiffs, and the Northwestern Mutual Insurance Company, a corporation hereafter referred to as Northwestern, and Bear Paw Sales & Service, Inc., a corporation, hereafter referred to as Bear Paw, were defendants.
The fact situation discloses that on May 9, 1960, Bear Paw was engaged in the new and used car business as a dealer at Havre and had on hand a 1958 Studebaker car which it had acquired on a trade and for which it held that certificate of title. Northwestern had issued to Bear Paw a blanket garage owners liability insurance policy covering vehicles owned by Bear Paw while used in its business or while being driven with its permission and consent.
Harlan Dean on the same date, May 9, 1960, was the owner of a 1958 Hillman car on which the certificate of title had been issued to him subject to a mortgage to a Havre bank. The Hillman car was covered by a liability insurance policy issued by Safeco which carried the usual provisions insuring Dean against liability arising out of the use of the Hillman car or any 'owned' replacement for it.
Dean had been looking for another car and on the morning of May 9, 1960 he drove the Hillman to Bear Paw's premises and arranged with the sales manager of Bear Paw to try out the Studebaker and show it to his wife. A price of $350 plus trade-in was discussed. Dean left the Hillman and drove away in the Studebaker which he used in his work as a salesman that day. On the following day Dean told the Bear Paw people that he would take the Studebaker and he continued in possession of the car on that day and on the following day, May 11, 1960, Dean was involved in a serious collision. Northwestern refused to accept any liability under its garage owners liability policy and this action was instituted by Safeco and Dean for a declaratory judgment to have judicially determined which company was primarily responsible for Dean's defense and any liability imposed upon him as a result of the collision.
Depositions were taken of officers of Bear Paw who had knowledge of the transaction and of Harlan Dean and the parties stipulated that the matter be submitted to the court for decision on those depositions, the admissions in the pleadings, the certificate of title to the Studebaker and copies of the two insurance policies. The court thereafter made and entered findings of fact, conclusions of law and a decree in favor of the defendants and this appeal followed.
The court found and concluded, in brief, that there was a completed sale and at the time of the accident Dean was the owner and driving as such and not by permission from Bear Paw; that the Studebaker was not owned by Bear Paw as the word owner is used in the Northwestern policy; that Dean was the owner of the Studebaker as the word owner is used in the Safeco policy and the Studebaker was a replacement automobile under the policy; and that the Northwestern policy does not protect Dean and the Safeco policy does.
Each of the policies of insurance contain similar 'other insurance' clause to the effect that with respect to a 'non-owner' automobile coverage was afforded only as to the existence of liability over any other valid and collectible insurance. The issue between the parties thus becomes very narrow, in that if Dean was the 'owner' of the Studebaker on May 11, 1960, the Safeco policy is responsible, as the district court found, but if Bear Paw was the 'owner' on that date then the Northwestern policy is responsible up to its limits and beyond which Safeco becomes responsible as the 'excess' insurer.
Plaintiffs' specifications of error are directed to the findings of fact and conclusions of law adopted by the court and its refusal to adopt those requested by the plaintiffs, and in entering judgment in favor of the defendants and against the plaintiffs.
In support of their specifications the plaintiffs contend that motor vehicles can only be transferred as to ownership by endorsement of the title as required by the provisions of sub-division (a) of section 53-109, R.C.M.1947; that by sub-division (c) of the same statute the affirmative duty was placed on Bear Paw as a dealer to obtain an application for transfer and registration on the Studebaker certificate of title; that under sub-division (d) of the same statute delivery, passing of title, or the transfer of any interest in the Studebaker could not be valid or effective for any purpose without complying with the specific provisions of the statute; that under the general law of sales there was not a valid change in ownership on May 10, 1960.
Section 53-109, R.C.M.1947, so far as pertinent here, reads as follows:
'(a) Upon a transfer of any title or interest of an owner or owner in or to a motor vehicle registered under the provisions of this act as hereinbefore required, the person or persons whose title or interest is to be transferred shall write their signatures with pen and ink upon the certificate of ownership issued for such vehicle, in the appropriate space provided upon the reverse side of such certificate, and such signature shall be acknowledged before a notary public.
'(b) Within ten (10) days thereafter, the transferee shall forward both the certificate of ownership so endorsed and the certificate of registration, together with the information required under section 53-107, to the registrar, who shall file the same upon receipt thereof and no certificate of ownership and certificate of registration shall be issued by the registrar of motor vehicles until the outstanding certificates are surrendered to that office or their loss established to his reasonable satisfaction.
'(c) The provisions of subdivision (b) of this section, requiring a transferee to forward the certificate of ownership after endorsement and the certificate of registration to the registrar, shall not apply in the event of the transfer of a motor vehicle to a duly licensed automobile dealer intending to resell such vehicle and who operates the same only for demonstration purposes, but every such dealer shall upon transferring such interest deliver such certificate of ownership and certificate of registration with an application for registration executed by the new owner in accordance with the provisions of section 53-107, and the registrar upon receipt of said certificate of ownership, certificate of registration and application for registration, together with the conditional sales contract or other lien, if any, shall issue a new certificate of ownership and certificate of registration together with a statement of any conditional sales contract, mortgage, or other lien as provided in said section 53-107.
'(d) Until said registrar shall have issued a certificate of registration and certificate of ownership and statement as hereinbefore provided, delivery of any motor vehicle shall be deemed not to have been made and title thereto shall not have passed and said intended transfer shall be incomplete and not be valid or effective for any purpose.'
The depositions disclose that the price agreed upon between Dean and Bear Paw for the Studebaker was $350 and trade-in or the Hillman free of any encumbrance; no arrangements were made as to how the $350 was to be paid. These arrangements were all oral between Dean and officers of Bear Paw.
The certificate of title to the Studebaker was never assigned by Bear Paw to Dean nor was it ever delivered to him, nor was any application for registration of the Studebaker ever executed by Dean, nor were any other papers or documents ever transmitted to the Registrar of Motor Vehicles to transfer title to Dean.
Bear Paw kept records of all cars they had in stock, which was explained: ...
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