Liberty Mutual Insurance v. American Automobile Insurance

Horney, J., delivered the opinion of the Court. This declaratory judgment proceeding was instituted by Liberty Mutual Insurance Company (Liberty) against American Automobile Insurance Company (American) and others to obtain a declaration as to which of two insurance policies would be primarily liable for damages recoverable by several persons for injuries they had sustained in an automobile accident. Prior to the filing of this proceeding the injured persons—who were all members of one family-—had brought suit for their personal injuries and/or property damage against Harold C. Miller (the father), who was insured by American, and John Robert Miller (the son), who was insured by Liberty. The record shows that the son, who was a minor, had obtained a “non-owners” policy in conformity with the financial ⁴⁹⁹ responsibility laws of this State [Code (1957), Art. 66%, § 93].

In the application for the policy, a renewal of which was in force at the time of the accident, the son—as a condition for obtaining that type of policy—had represented that he did not own an automobile and in fact he did not own one at that time. However, in the interim between the original application and the accident, the son had successively purchased three automobiles and had titled each of them in his name. But, nine days before the accident, he had assigned the title to the most recent acquisition—a 1953 Ford—to his father. It was this automobile, then being operated by the son, which was involved in the accident.

The father’s policy on the family automobile—a 1955 Pontiac—also insured all subsequently acquired automobiles owned by him. Liberty could not and did not deny liability to the injured parties under the financial responsibility law, but it asserted that it was liable only as a secondary insurer under the terms of its policy as to excess coverage. It contended that American was primarily liable by the terms of its policy concerning subsequently acquired automobiles. The testimony of the witnesses, and a deposition by the son, shows that the son alone took care of the maintenance and operated the vehicle.

And, while the father procured the loan to pay for the .Ford, it was the son who made the payments on the loan. The father also testified that he had not had the title of the Ford changed from his son’s name to his own until the lending institution had required him to do so due to the son’s minority. The chancellor, in finding as a fact that the father “was not the 'owner’ ” of the .Ford and that American’s policy “did not insure” it, in effect “declared” the rights, status and legal relationships of the parties with respect to the contracts of insurance involved in this proceeding. The sole issue presented by this appeal is a narrow one.

Although several other questions were presented in its brief, Liberty, in the course of its oral argument, frankly conceded that unless an estoppel had in fact been established, i.e., that the father was estopped from denying ownership of the Ford —the chancellor’s finding as to owmership must be affirmed. ⁵⁰⁰ In effect, Liberty’s approach to the issue appears to have a double thrust in that it seeks to have this Court rule as a matter of law that a registered title owner is estopped to deny actual ownership of an automobile, irrespective of the lack