Trinity Universal Ins. Co. v. De Martini

• Decision Date: 23 June 1938
• Docket Number: No. 3693.,3693.
• Parties: TRINITY UNIVERSAL INS. CO. v. DE MARTINI et al.
• Court: Texas Court of Appeals

118 S.W.2d 901

TRINITY UNIVERSAL INS. CO. v. DE MARTINI et al.

No. 3693.

Court of Civil Appeals of Texas. El Paso.

June 23, 1938.

Rehearing Denied July 14, 1938.

Appeal from District Court, El Paso County; P. R. Price, Judge.

Two separate actions by Aida R. DeMartini and Louis R. Stein, ancillary administrator of the estate of Mary Cooney, deceased, against the Trinity Universal Insurance Company to recover on a policy of liability insurance issued by defendant. Judgment for the first-named plaintiff for $10,219.41, and for the administrator for $10,099.50, and defendant appeals.

Affirmed.

Touchstone, Wight, Gormley & Price, of Dallas, for appellant.

Louis R. Stein and McBroom & Clayton, all of El Paso, and Honey & Mayall, of Stockton, Cal., for appellees.

NEALON, Chief Justice.

This case involves an appeal from a judgment of the District Court of El Paso County, Texas, in favor of appellees and against appellant, a Texas corporation, in amounts as follows: For Miss Aida R. DeMartini, $10,219.41, with seven per cent interest from March 19, 1935, until paid, and in favor of Louis R. Stein as administrator of the estate of Mary Cooney, for the sum of $10,099.50, with interest at the rate of seven per cent per annum from September 18, 1935, until paid. Originally there were two cases in the District Court. The cases were consolidated for trial.

These cases grew out of an automobile accident which took place in the State of California, in which Mary Cooney, now deceased, and Miss DeMartini, one of appellees herein, were injured when struck by a car driven by one B. MacDonnell. Both of these ladies recovered judgment in suits brought in the State of California against MacDonnell. Hence, the suits against appellant, which had issued a policy of public liability insurance to MacDonnell. The policy was in full force and effect at the time of the accident. The policy provided that one obtaining judgment on account of injuries covered by the policy might proceed against the insurance company if, because of the assured's insolvency or any other cause, the judgment was not satisfied within thirty days after its rendition. These conditions were met. Plaintiffs alleged that under the terms of the policy, since MacDonnell was insolvent, each of them was entitled to recover to the extent of $10,000. Miss Cooney died prior to the institution of the action here involved, and Mr. Stein was appointed and qualified as ancillary administrator in Texas.

Appellant pleaded and proved that at the time of the filing of the suits in El Paso County there was pending a suit in the United States District Court for the Northern District of California, Southern Division, upon the Equity Docket of said court, in which appellant sought judgment under the Declaratory Judgment Act of Congress (Title 28, Sec. 400, U.S. Code, 28 U.S.C.A. § 400), to determine if appellant was liable to Miss DeMartini and the representatives of Miss Cooney, by reason of said policy of insurance, and that said cause in California had progressed to the point where the Judge had heard and overruled motions of the defendants therein to dismiss the suits. It alleged that the cause was coming up for final disposition in the Fall of 1937. It contended that the suit in the California Federal Court gave that court exclusive jurisdiction of the controversy. These matters were set up by way of plea in abatement; and, subject to said plea, it answered by general demurrer, general denial and a plea that the policy was void because of breach of alleged warranties upon the part of MacDonnell with respect to the ownership of the automobile. The case was tried by the court without the intervention of a jury. Pleas to the jurisdiction and of abatement were overruled and judgment entered as hereinbefore recited, from which judgment the defendant below appealed.

A short narrative of the transactions out of which this controversy grows is here given. During August, 1934, Burleson MacDonnell obtained employment with the State Emergency Relief Administration of the State of California as a timekeeper. The authorities of that department of the State Government required him to have an automobile that he could use in his work, and required that public liability insurance be carried on the vehicle naming the employer as well as the employee as the insured, and that it be filed in the San Francisco office of the Emergency Relief Administration, Insurance Department. MacDonnell was financially unable to purchase an automobile. One of his friends, Rudolph Gesswein, with whom he was residing and who was assisting him, bought a car from E. A. Test, and agreed with MacDonnell that the latter should repay him out of his mileage checks issued by his employer. Gesswein testified: "I bought the car and transferred it into Burleigh MacDonnell's name at the time for Burleigh. I did not buy it for myself." Prior to its purchase by Gesswein the car had been registered with the "Division of Registration of the Department of Motor Vehicles" of the State in the name of Frank Manning as registered owner and E. A. Test as legal owner. Manning and Test, at the time Gesswein purchased the car, by a writing transferred their interests to B. MacDonnell, who was named as "first transferee" and R. Gesswein, who was named as "second transferee" and "new legal owner." The car was at first registered with the Motor Vehicle Department in the name of Gesswein as both legal and registered owner. Though MacDonnell had fully reimbursed Gesswein prior to the accident, the car was not registered in his name as "registered owner" until subsequent thereto. However, he had exclusive possession, use and control of it at all times subsequent to its purchase by Gesswein—at which time it was delivered to MacDonnell.

The arrangement between MacDonnell and Gesswein rested in parol. According to Gesswein it was understood that he was to retain the legal title, though MacDonnell was to be named as the registered owner.

The California Motor Vehicle Act provides that the proper authorities shall, upon the registration of a vehicle for use upon the public highways, "issue a certificate of registration to the owner and a certificate of ownership to the legal owner, or both to a person who is both owner and legal owner." St.Cal.1931, p. 2104, § 41. Among other things the Act provides that upon the transfer of a title or interest "of a legal owner or owner in or to a vehicle registered under this act * * * the person or persons whose title or interest is to be transferred and the transferee shall write their signatures with pen and ink upon the certificate of ownership. * * * Within 10 days thereafter, the transferee shall forward * * * the certificate of ownership so endorsed * * * to the [proper authorities for registration]." St. Cal.1929, p. 514, § 45. There is a further provision that until the proper division shall have issued the new certificate of registration and certificate of ownership, "delivery of such vehicle shall be deemed not to have been made and title thereto shall be deemed not to have passed and said intended transfer shall be deemed to be incomplete and not to be valid or effective for any purpose." St.Cal.1929, p. 514, § 45.

On August 20, 1934, MacDonnell applied at the office of Lowen W. Loy, an insurance broker at Stockton, California, then agent for the General Casualty Insurance Company, for the insurance required by the employer. Loy's clerk, who was authorized to act for him in the premises, was acquainted with MacDonnell and knew that he was employed by the Emergency Relief Administration of California as a timekeeper, and that by virtue of said employment he was compelled to carry public liability insurance. MacDonnell told her that he wished a policy similar to one that had been issued to Raggio, another employee of the State. He made no formal application. Neither did he make any statement as to the legal ownership of the vehicle, and Miss March, the clerk, made no inquiry, giving as a reason that legal ownership was not material for the class of insurance that MacDonnell sought, to-wit, public liability and property damage insurance. The policy was written in the General Casualty Company of America and named MacDonnell and the State of California as the assured. It was mailed by MacDonnell to his employer's representative. Later Mr. Haney, the agent of the General Casualty Company, recovered the policy from the representative of the State because his Company had ceased to write this character of policy at the reduced rate offered. Mr. Haney then secured from appellant the policy here involved. Appellant's agent, Russell, issued it at the instance and request of Haney. MacDonnell made no representations and signed no application, nor does it appear that he authorized anyone else to do so. Appellant's agent delivered the policy to the said Emergency Relief Administration at San Francisco and mailed a copy to Loy. The same agent wrote a similar policy for Raggio. MacDonnell was never in possession of the policy issued by appellant and was not familiar with the statements, conditions and provisions contained therein until sometime after the accident. A special endorsement provided that the Insurance Division of the SERA at San Francisco would be given ten days written notice before any cancellation of the policy should become effective.

Under a schedule of statements attached to the policy of insurance, and by reference made a part thereof, the following appeared: "The automobile described herein is paid for in full and is not mortgaged except in the amount of: No exceptions." Among what were styled the express conditions, limitations and agreements of the policy is one that recites that all rights thereunder are strictly personal to the assured and that the entire policy shall be void, unless otherwise provided by agreement in writing added thereto, "if the interest of the assured in the...