U-Haul Co. v. Rutherford

Orth, J., delivered the opinion of the Court. THE DOCTRINE OF NEGLIGENT ENTRESTMENT The Court of Appeals has adopted and applied the doctrine of negligent entrustment as stated in 2 Restatement, Second, Torts, § 390. Snowhite v. State, Use of Tennant, 243 Md. 291, 311 ; Rounds v. Phillips, 166 Md. 151 . It reads: “One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them.” ³⁷⁶ Under this- statement of the doctrine the entruster is subject to liability for physical harm resulting to the en-trustee and to third persons when it is established that: 1) the entruster supplied the chattel for the use of the entrustee; and 2) that the entruster knew or had reason to know: a) that the entrustee because of: i) his youth; or ii) his inexperience; or iii) otherwise would be likely to use the chattel in a manner involving unreasonable risk of. physical harm; b) that such harm would be to : i) the entrustee, or ii) other persons whom the entruster should expect to share in or be endangered by the use of the chattel.

The doctrine is an out-growth of the rule that a vendor who sold an inherently dangerous instrumentality was liable to third persons for injuries sustained upon the principle that such instrumentality was placed in such position that injury might be inflicted, and that without notice or warning to the vendee in respect to the dangerous qualities. See State v. Katcef, 159 Md. 271 ; State v. Fox, 79 Md. 514 . A motor vehicle is a chattel within the doctrine; although it is not an inherently dangerous instrumentality, it is an instrument which is potentially dangerous. Rounds v. Phillips, supra, at 162.

Thus it is susceptible of being used in a manner involving unreasonable risk of physical harm. So the doctrine provides an exception to the general rule that the owner of an automobile is not responsible for the negligent use of it except upon the theory of respondeat superior. The Instant Case U-Haul Co., appellant, appeals from a judgment of $15,- ³⁷⁷ 000 entered in favor of Harry T. Rutherford and a judgment of $1000 entered in favor of Rutherford and Florence Y. Rutherford, his wife, appellees and plaintiffs below, against it and Walter H. Gough, each a defendant below, by the Superior Court of Baltimore City upon a verdict of a jury in an action by Rutherford to recover for personal injuries and by him and his wife to recover for loss of consortium, resulting from an automobile accident. The action was initiated by the filing of a declaration by appellees against appellant, Charles J. Jefferson and Shirley J. Jefferson, his wife, William Thomas Gowran, and Walter H. Gough.

The first count was as to the claim of Rutherford and the second count as to the claim of him and his wife. The claims were based on alleged negligent operation of motor vehicles by the defendants. Subsequently the declaration was amended to add two counts as the third and fourth counts. The added counts claimed in the alternative damages under the doctrine of negligent entrustment, the third count alleging that appellant negligently entrusted a motor vehicle to Gough and the fourth count alleging that Gowran so entrusted the vehicle to Gough. 1 The Evidence There was evidence from which the jury could properly find that about 10:30 A.M. on 16 September 1967 there was an accident on the Baltimore National Pike at Ingleside Avenue involving three motor vehicles.

An automobile operated by Mr. Rutherford was stopped facing west at a traffic light in the northernmost lane of the Baltimore National Pike at Ingleside Avenue. Stopped behind it was an automobile operated by Shirley J. Jefferson. A two-ton truck collided with the rear of the Jefferson automobile, ramming it into the rear of the Ruther ³⁷⁸ ford automobile. The Jefferson automobile bounced back off the Rutherford automobile and was struck a second time by the truck.

Again the Jefferson automobile was rammed into the Rutherford automobile. The force of the two impacts broke the seat latch of the Rutherford vehicle, jammed all four doors, bent the frame and drove it 28 feet into the intersection. The Jefferson vehicle was also extensively damaged. There was little damage to the truck and that to the front bumper.

It is not disputed that the accident was caused by the negligence of the driver of the truck without any contributory negligence on the part of the drivers of the other two vehicles. At the scene the driver of the truck showed a police officer investigating the accident a chauffeur’s license in the name of William Thomas Gowran and a card identifying Gowran as a maintenance man employed by the City of Baltimore. The officer issued a traffic summons in the name of Gowran and the driver of the truck signed it “William T. Gowran.” It later developed that the driver of the truck was not William Thomas Gowran but Walter H. Gough and that he had rented the truck that morning from U-Haul. Called by appellees at the trial as an adverse witness, 2 he explained that he had found Gowran’s license in a bar. “I went to the toilet.

I seen this folder laying on the ground in the toilet there. So I picked it up and put it in my pocket. I went back to the bar not knowing at the time it belonged to Mr. Gowran. So I went home to my room.

I wasn’t living with my wife at the time. Went home to my room, I opened it up and I seen the chauffeur’s license.” The next day his wife said she was going to move and he suggested he rent a truck to move her furniture. He looked in the telephone book “for a truck that size. So in the book it stated [a U-Haul branch in the Edmondson Village area] has a truck that size for moving.

So I went out there [from East Baltimore.] * * * I just walked in to the office. * * * I just took the license out of my pocket and put it on the desk. ³⁷⁹ I said, T want to rent that truck there, that two-ton truck.’ I said I wanted to haul three rooms of furniture, one way to Cumberland. * * * He said okay.” The clerk “made up a contract” and Gough signed it in the name of William T. Gowran. 3 The U-Haul rental contract received in evidence consisted of three sheets. On the third was printed the terms of the rental agreement and the cargo insurance conditions. The upper part of the second sheet appeared to be a carbon copy of the upper part of the first sheet. It included the name of the customer, in this case William T. Gowran, and his address and the number of his chauffeur’s license.

At the end of the upper portion was the signature “William T. Gowran.” The bottom portion of the second sheet contained information apparently completed when the truck reached its destination, and was returned to U-Haul. It showed amounts credited against the deposit made and required the customer’s signature when a refund was received. It bore the signature “William T. Gowran.” Gough testified that at the time he rented the truck he did not have a chauffeur’s or operator’s license to operate a motor vehicle. He had not had such a license since 1953.

He said he had driven once between 1956 and 16 September 1967. He was asked if he was convicted on 26 February 1956 in the Criminal Court of Baltimore for auto larceny, false name or registration of title, making false affidavit and displaying fictitious license. He admitted he had been convicted “about false application.” Gowran’s license was not produced at the trial. Gowran said it was never returned to him and what Gough did with it after the accident is not disclosed in the record.

Nor was the U-Haul representative who rented the truck to Gough called as a witness. ³⁸⁰ Application of the Doctrine of Negligent Entrustment The verdict against U-Haul was based on the third count of the declaration alleging negligent entrustment, the court having directed a verdict in favor of U-Haul as to respondeat superior. The count declared that U-Haul negligently intrusted its truck to Gough, “* * * in that it failed to adequately inspect the chauffeur’s license of Defendant Gowran which Defendant Gough presented to it at the time he leased the truck, failed to compare the signature on the license with the signature Defendant Gough had written, or should have been required to write, in the presence of Defendant U-Haul’s agents or employees, and to compare the physical description on the license with the Defendant Gough, and thereby permitted Defendant Gough, an unlicensed person, to operate the truck when Defendant U-Haul, its agents or employees, knew or by the exercise of ordinary care should have known.that Defendant Gough was incompetent to do so and was without a license to operate the same, * * The evidence was undisputed that U-Haul supplied the truck to Gough by renting it to him. And it was legally sufficient to show that U-Haul had reason to know, because its truck was to be operated on the highways, that anyone driving on the highways would be endangered by the use of the truck. Since Rutherford was proved to be a driver of an automobile on the highways, U-Haul should have expected him to be endangered by the use of the truck.

The question is whether the evidence was legally sufficient to show that U-Haul knew or had reason to know that Gough would be likely to use the truck in, a manner involving unreasonable risk of physical harm. The question is before us on the denial by the trial court of U-Haul’s motion for a directed verdict. Maryland Rule 552. In determining whether U-Haul’s motion for a directed verdict was properly denied, we must consider the evidence in a light most favorable to the Rutherfords, resolving all conflicts in their favor and assuming the truth of all the inferences which may be naturally and legitimately drawn from such evidence.

Such a motion should ³⁸¹ not be granted if there is any legally relevant and competent evidence from which a rational mind can infer a fact at issue. Yommer v. McKenzie, 255 Md. 220, 228 . But “it is fundamental that in a negligence action the plaintiff has the burden of proving all the facts essential to constitute the cause of action.” Peterson v. Underwood, 258 Md. 9, 15 . Under the doctrine as stated appellees had to show that U-Haul knew or had reason to know when it rented the truck to Gough