Zurich Ins. Co. v. Continental Cas. Co.

• Decision Date: 13 July 1965
• Docket Number: No. 297,297
• Citation: 212 A.2d 96,239 Md. 421
• Parties: ZURICH INSURANCE CO. et al. v. CONTINENTAL CASUALTY CO. et al.
• Court: Maryland Court of Appeals

Page 421

239 Md. 421

212 A.2d 96

ZURICH INSURANCE CO. et al. v. CONTINENTAL CASUALTY CO. et al.

No. 297.

Court of Appeals of Maryland.

July 13, 1965.

John J. Mitchell and Donahue, Ehrmantraut & Mitchell, Takoma Park, for appellants.

Charles E. Channing, Jr., Annapolis, for appellees.

Before PRESCOTT, C. J., and HORNEY, SYBERT, OPPENHEIMER and BARNES, JJ.

PRESCOTT, Chief Judge.

This appeal presents a controversy between two automobile liability insurance carriers: Zurich Insurance Company (Zurich), and Continental Casualty Company (Continental).

Brockway Motor Trucks (Brockway), apparently a corporation, in 1958, operated a used-truck sales business in Baltimore City. On, or about, August 12th of that year, a Mr. Kaumjian (according to appellees' brief; Kumjeon according to appellants'), a representative of Delta Chemical Company (Delta), entered into negotiations with Brockway concerning the possible purchase of one of its used trucks. Kaumjian selected a truck as probably being suitable for his purposes, and two or three days later called Mr. Barry, Branch Manager of Brockway and advised him he would like to try out the truck. ¹ Barry testified that he advised Kaumjian that his company did not ordinarily permit demonstration of used vehicles, but, if Kaumjian, inter alia, would have the truck adequately covered with insurance and return it the next day, he could use the truck for one trip to Wilmington, Delaware. According to Barry, Kaumjian assured him that Delta has a Fleet Policy and Kaumjian would include the truck in that policy by way of binder 'while it was on loan' (this was not done).

A representative of Delta 'picked up' the truck on, or about, August 13th, after signing an application for temporary license tags.

The truck was not returned the next day, and, after Kaumjian was contacted and gave an excuse for not having returned it, he was informed that he could keep it for one more day. The truck was not returned on the following day, and, when Kaumjian was reached again, he stated that he was satisfied with the truck with the exception of a few minor repairs. No demand was made at this time for the truck's return, and it was not returned, nor was any down payment made on the 'order' (the pertinent terms of which will soon be set forth). On August 18th or 19th, the truck was involved in a collision with a motor vehicle belonging to one James C. Burke; Burke sustained personal injuries and his vehicle was damages. At the time of the collision, the truck was being operated by Ernest Galloway, an employee of Delta, who was operating the same on the business of his employer. Delta's insurer was Continental; Brockway's was Zurich.

Burke brought suit against Brockway, Delta, and Galloway. Continental then made a written demand on Zurich that it, as the primary carrier, take over the defense of the cause. Zurich refused to comply with this demand. After an agreement with Zurich that $6,000 was a reasonable figure upon which to settle, Continental negotiated a settlement with Burke for that amount, and, then brought suit against Zurich for reimbursement. Judge Powers decided that Brockway owned the truck at the time of the collision and that Zurich was the primary insurance carrier. This appeal followed.

Two questions are presented: (1), Was Brockway the owner of the truck at the time Burke was injured?; and (2), If Brockway were the owner, was Delta's insurer (Continental) liable for all, or any part, of the settlement made with Burke?

I

The 'Used Truck Order' mentioned above stated that it was 'given and accepted subject to conditions':

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'(2) It is agreed that title is not intended hereby to pass to purchaser.'

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'(4) There are no understandings, agreements, or representations * * * not specified herein * * *.'

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'(6) This order shall not be binding upon vendor until accepted by vendor in writing hereon, by its authorized agent, * * *.'

Appellant first suggests that Delta must be held to have been the 'owner' of the truck at the time of the accident by reason of Code (1957), Article 66 1/2, Section 2(32), although conceding that title 'rested' in Brockway. The provision of the Code referred to is in the 'Motor Vehicles' Article, and states: 'The term 'owner' shall include any person, firm, association or corporation owning a vehicle or having the exclusive use thereof, under contract of purchase, lease, hiring or rental thereof, or otherwise.' Appellant argues that Delta had the exclusive use of the vehicle at the time of the accident; therefore, it necessarily follows, by reason of the statute, that Delta was the owner.

We do not think the answer to this claim requires lengthy elaboration. In Baughman v. Milstone, 144 Md. 223, 125 A. 69, this Court in construing the language of the statute (then Article 56, § 134) stated that statutes must be construed reasonably and with reference to the purposes sought to be accomplished by them. It then held that one who hired a motor vehicle by written agreement which gave to the hirer in temporary possession exclusive control of the vehicle for a short period of time was not the 'owner' thereof for the purposes of registration, titling, etc., under the provisions of the then Section 134 of Article 56, et seq. We do not think the Legislature intended by said Section 2(32) to constitute everyone, who takes a motor vehicle out for trial, the 'owner' thereof so as to be included in his insurance policies by reason of the statute alone, even though he may be temporarily placed in exclusive control of the vehicle; and we hold that the Legislature did not so intend.

Appellant next contends that Delta was the owner of the truck because Code (1957), Article 83, § 37(2) states that when goods are delivered to a buyer on approval or trial, the property passes when the purchaser signifies his acceptance, or his adoption of the sale in some manner; and, if the prospective vendee fails to signify his acceptance, his acceptance may be implied if the goods are not returned within a reasonable time. No claim is made that the parties to a contract of sale (we do not intimate that Delta and Brockway had a contract of sale at the time of the collision) are required to include these provisions in all contracts of sale. As a matter of fact, § 37 sets forth rules for ascertaining the intention of the parties as to the time of the passing of the property in goods 'unless a different intention appears.' In the instant case, the 'order' specifically stated that title was not intended to pass and the order would not be binding on vendor until accepted by vendor in writing, and Mr. Barry, Branch Manager for Brockway in Baltimore, testified that an order could not be accepted at 'branch level,' but it was necessary to mail the order forms to the home office in New York State for acceptance. He added that an order was an offer from a prospective purchaser until accepted by the home office. The 'order' was still in the Baltimore Branch of Brockway at the time of the accident, without acceptance by Brockway. Code (1957), Article 83, § 36 provides that title passes when the parties intend it to pass. As just stated above, the explicit terms of the order provide that title was not intended to pass by any action taken by the parties prior to the accident. We, therefore, hold...