Smith v. American Fire & Cas. Co.

• Decision Date: 13 September 1951
• Docket Number: No. 4711,4711
• Citation: 242 S.W.2d 448
• Parties: SMITH v. AMERICAN FIRE & CASUALTY CO.
• Court: Texas Court of Appeals

Page 448

242 S.W.2d 448

SMITH v. AMERICAN FIRE & CASUALTY CO.

No. 4711.

Court of Civil Appeals of Texas, Beaumont.

Sept. 13, 1951.

Rehearing Denied Oct. 4, 1951.

Adams, Browne & Sample, Beaumont, for appellant.

Orgain, Bell & Tucker, Beaumont, for appellee.

WALKER, Justice.

This action was brought upon an insurance policy, to recover the damages sustained by appellant's automobile in a collision. Appellant was plaintiff, and appellee was defendant in the trial court.

Plaintiff purchased the automobile (a new and unused vehicle) on March 22, 1949, and on the same date defendant issued to him the policy in suit. The collision occurred on June 26, 1949, during the term of the policy, and the vehicle was badly damaged. At the time of the collision the vehicle was being operated by plaintiff's brother under an agreement with the plaintiff that in a certain case the brother might buy the car from the plaintiff. Defendant plead this agreement in bar of this suit, on the ground that it brought into operation a clause of the policy which excluded the automobile from the contract of insurance if it was subject to any bailment lease, conditional sale, mortgage or other encumbrance not specifically declared and described in the policy. Defendant denied liability on the policy and plaintiff brought this suit.

The cause came on for trial before the court sitting with jury, and the jury returned the following verdict in response to special issues; (1) plaintiff was the sole owner of the automobile on March 22, 1949; (2) the automobile was damaged in a collision on or about June 26, 1949; (3) the reasonable market value of the automobile immediately prior to the collision was $1800; and (4) immediately after the collision was $985. (5) Plaintiff did not intend to pass title to his brother when he delivered the automobile to his brother; and (6) at the time of the collision, plaintiff's automobile was not subject to any bailment lease, conditional sale, mortgage or other encumbrance. The terms underlined were defined, and these definitions are repeated hereinafter.

Defendant moved for judgment non obstante veredicto. This motion brought forward the defense based on the exclusion clause to which we have referred and, in effect, was grounded upon the argument that the finding under Issue 6 was contrary to the proof as a matter of law because of the agreement by the plaintiff and his brother. We construe the motion as attacking only the finding under Issue 6; there was certainly enough evidence to support the finding under Issue 5. Defendant's motion was granted and judgment was rendered in behalf of defendant, that plaintiff take nothing. From this judgment plaintiff has appealed.

(1) The trial court erred in sustaining defendant's motion for judgment non obstante veredicto.

The provision of the policy on which defendant relies reads: 'this policy does not apply: * * * (h) under coverages * * * E * * * while the automobile is subject to any bailment lease, conditional sale, mortgage or other encumbrance not specifically declared and described in this policy.' Coverage E was that sued upon by the plaintiff. In the provision describing coverage E defendant promised 'to pay for direct and accidental loss of or damage to the automobile * * * caused by collision of the automobile with another object or by upset * * * but only for the amount of each such loss in excess of the deductible amount * * * stated in the declarations.' The deductible amount mentioned was $25.00. Coverage E was also made subject to the exclusion provision first quoted.

The terms used in the exclusion provision were not defined by the policy; but as we have stated the trial court, in the charge to the jury, defined the three terms underlined, and since no objection to these definitions is made by defendant these definitions fix the meaning of the terms defined and must be used in determining whether the exclusion provision ever came into operation. The trial court's definitions are quoted hereinafter.

Although there was evidence to the contrary of some of that now to be stated, there was proof of the following matters, and for the reasons hereinafter stated this proof supports the jury's findings under Issue 6:

Plaintiff was the sole and unconditional owner of the automobile when the policy was issued to him by defendant; and he never transferred the title of the vehicle to his brother.

The agreement on which defendant relies and which defendant says constituted a breach of the exclusion provision was oral in form and it was made after the policy was issued, in April or May.

On the date when plaintiff brought the car and when the policy was issued, the plaintiff and his wife and his brother all resided in Beaumont with the parents of the plaintiff and his brother. The brother was then 20 years old (he was of age at the time of trial) and the plaintiff was 25 years old. Shortly after the date mentioned, the brother's employment required him to work in Louisiana; and as an accommodation to his brother, the plaintiff loaned his brother the automobile and the brother took the vehicle to Louisiana and used it there for a time and then returned home with it. During his employment in Louisiana, the brother returned home at regular intervals; he was at home two weeks during each month, and his agreement with the plaintiff was made on the occasion of his second or third return to Louisiana. The cause of the agreement was the brother's need of some means of transportation to and from his place of work; the plaintiff owned another automobile and wished to aid his brother kn keeping his employment. The agreement was that the brother would send to the plaintiff from time to time such money as he might save; that the plaintiff would hold this money; and that when enough money had been accumulated in this way to pay the price of the car, the brother could have the car if he wanted it. The price of the car was to be what the plaintiff 'had in it' and seems to have included the cost of the policy in suit as well as the purchase price paid by the plaintiff for the car. The sums of money which the brother was to send to the plaintiff were not fixed by the agreement, nor were the times when the money was to be sent to the plaintiff.

This agreement, so far as it had any effect, remained in effect until the collision occurred in June, and the brother had the possession and made use of the automobile when he was in Louisiana. This must have been two weeks out of each four weeks since the plaintiff says his brother was at home two weeks out of each month. The brother also sent to the plaintiff about $500. As he received this money the plaintiff entered the amount of the sum received in an account book and deposited the money in his account in the bank. Plaintiff still had this money on deposit in the bank when this cause was tried.

However, neither party to this transaction considered the other party to be bound by this agreement, and each party had this fact in mind; and the jury could have found that the parties did not intend for the brother to become the owner of the car when the had sent enough money to the plaintiff to pay the price but that the parties intended, after this accumulation had been made, for the brother to consciously determine that he wanted the car and for the plaintiff to consciously acquiesce in this act and thus, at that time, and not before, to vest the brother with a right to the car.

Thus the brother testified: 'Q. * * * You had the right to it upon final payment, full payment, that is, of all the money he had in it, is that right? A. Unless he backed out.' The plaintiff made several statements to the effect that after the brother had saved the necessary sum of money, he was to have the car 'if he wanted it.' And the plaintiff twice testified that a final agreement was not to be made until after the necessary sum had been saved. Thus he said: (a) 'He promised me if I would sell him the car he would send me enough money or save enough if we each would decide to make a deal he would have it and I would let him have the car if he saved enough money;' (b) 'I was going to save it for him and then if he built up enough that he could pay for the car and wanted it we might make a deal.'

With this testimony must be considered these items: (a) Both the plaintiff and his brother testified that the car was only loaned to the brother; (b) the money sent to the plaintiff was referred to by plaintiff as a 'saving' for the brother and the brother testified, in effect to the same thing. Thus the brother said: 'I wasn't paying it. I was just giving it to him to keep for me.' Plaintiff said that he had done this service for his brother before the agreement was made; and he denied that he had applied the money on the purchase price of the car. Both plaintiff and his brother testified that the money had not been sent to the plaintiff as payments on the price of the car. Plaintiff said that the brother had no 'checking account and I did'. (c) The vehicle was referred to as the plaintiff's car, and when the brother was at home (two weeks out of each month) the plaintiff and his wife used the car as they wished. (d) The brother did not have unlimited control over the car. Thus the plaintiff testified:

'Q. Now Bill, Mr. Bachman asked you yesterday, he said as far as you were concerned James could drive that car wherever he pleased, and I believe you said 'yes' to that question. Do you remember that? A. Yes sir.

'Q. Now just what were you talking about? What were you talking about? The time when he took it over there to work or when it was at home or what? A. Well, especially when he was working. * * *

'Q. Bill, do you mean by that as far as you were concerned he could take the car just any place out of say Louisiana, go to New York or Chicago or some place like that? A. No sir.

'Q. State whether or not your answer to that question was with reference...