Unsat. C. & J. Fund v. Usf & G.

256 Md. 412 (1970) 260 A.2d 279 UNSATISFIED CLAIM AND JUDGMENT FUND, ET AL. v. UNITED STATES FIDELITY & GUARANTY COMPANY [No. 141, September Term, 1969.] Court of Appeals of Maryland. Decided January 8, 1970. The cause was argued before HAMMOND, C.J., and BARNES, McWILLIAMS, SMITH and DIGGES, JJ. James M. Gabler, with whom were John G. Prendergast, Jr. and Smith, Somerville & Case on the brief for appellant Hildenbrand and Francis B. Burch, Attorney General, and William E. Brannan and Alfred J. O'Ferrall, III, Assistant Attorneys General, on the brief for appellant Unsatisfied Claim and Judgment Fund.

David M. Buffington for appellee. SMITH, J., delivered the opinion of the Court. This is yet another case arising under the omnibus ⁴¹⁴ clause of a motor vehicle public liability and property damage insurance policy. Appellee United States Fidelity & Guaranty Company (U.S.F. & G.) issued a policy of insurance to William Elmer Grube (the father).

He was the "named insured". William Russell Grube (the son), then 23 years of age and just home from the Navy, bought an automobile. It was titled in the name of the father and added to the father's policy, a car previously owned by the father having been in the policy originally. On July 6, 1966, there was an accident while the car was being operated by Alan Thomas Hildenbrand (Hildenbrand), to whom the car had been entrusted by the son for the purpose of taking it to certain repair shops.

U.S.F. & G. brought a declaratory judgment action to determine whether its policy was applicable to the accident. Parties were Hildenbrand, Unsatisfied Claim and Judgment Fund (the Fund), and the person injured in the accident. Two issues were submitted to a jury, namely: "1. At the time of the accident in question, did the named insured, William Elmer Grube, the father, have such an interest in it that he was entitled to the right of possession and control of the vehicle?

"2. Was the operation of the 1961 Chevrolet by Alan T. Hildenbrand at the time the accident on July 6, 1966, operating within the scope of the permission given by William Russell Grube?" [sic] The jury answered both questions in the affirmative. Judge Watts in the Superior Court of Baltimore City granted the motion of U.S.F. & G. for a judgment n.o.v. and declared the driver of the vehicle at the time of the accident not protected under the policy issued by U.S.F. & G. to the father. Hildenbrand and the Fund appeal.

We shall affirm the action of Judge Watts. At the time of the accident and at the time of the purchase ⁴¹⁵ of the car, the son was unmarried, although he had been married previously. He resided in the home of his parents. The car was financed.

The loan obligation was signed by both the father and the son. The down payment was made by the son from money he had saved. The son made the car payments and paid all operating expenses, including repairs, gasoline, and oil. He was employed.

We regard this case as controlled by Selected Risks v. Miller, 227 Md. 174 , 175 A.2d 584 (1961), and Keystone Ins. Co. v. Fidelity & Cas. Co., 256 Md. 423 , 260 A.2d 275 (1970), decided today. The applicable clause in the insurance policy provided in pertinent part: "Persons Insured The following are Insureds under Part I: (a) with respect to the owned automobile, (1) the Named Insured and any resident of the same household, (2) any other person using such automobile with the permission of the Named Insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission, and (3) any other person or organization but only with respect to his or its liability because of acts or omissions of an Insured under (a) (1) or (2) above;" When title to the vehicle was placed in the name of the father, this raised a presumption of ownership.

Such presumption is not conclusive, however, and is rebuttable by evidence to the contrary if such is produced. Liberty Co. v. American Co., 220 Md. 497, 500 , 154 A.2d 826 (1959). For purposes of the case Hildenbrand and the Fund were treated as plaintiffs. In considering the motion for judgment n.o.v., the evidence and the reasonable inferences ⁴¹⁶ to be drawn from it must be considered in the manner most favorable to Hildenbrand, the Fund's interest coinciding with his interest.

P. Flanigan & Sons v. Childs, 251 Md. 646, 653 , 248 A.2d 473 (1968). In the view we take of this case, we are obliged to consider only whether there was legally sufficient evidence to establish that the father had such an interest in the vehicle as would entitle him to the right of possession and control of the vehicle, since if he did not, the permission of the owner who is not the named insured would not bring Hildenbrand within the omnibus clause. Selected Risks v. Miller, supra , and Keystone Ins. Co. v. Fidelity & Cas.

Co., supra . The undisputed testimony of the son was that he owned the vehicle. This would have the effect of rebutting the presumption that might have arisen by virtue of the titling of the vehicle in the name of the father. The appellants seek to distinguish this case from Selected Risks v. Miller, supra .

Were they successful, their contention would cover Keystone, supra, also. They point to the fact that in Selected Risks v. Miller, supra , Judge (later Chief Judge) Prescott, in the opinion for the Court quoted with approval from 5A Am. Jur., Automobile Insurance, § 95 at page 94, saying in his opinion: "[T]he word `permission' or `consent' connotes the power to grant or withhold it, and, therefore, in order for one's use and operation of an automobile to be within the meaning of an omnibus clause requiring the permission or consent of the named insured, the latter must, as a general rule, own the insured vehicle or have such an interest in it that he is entitled to the possession and control of the vehicle and in a position to give such permission." Id. at 178. (emphasis added by appellants) They say, "It is clear from the context that the italicized word `or' was employed by the Court to express an alternative, ⁴¹⁷ or to give a choice of one among two or more things." They contend that the father was in a position to exercise considerable dominion and control over the use of the automobile by the son.

They say that, without the consent of the father, the son could not have obtained the ownership of the car, being unable to pay for it; that he would have had no insurance coverage on it; that he could not have continued to retain it in his possession; that the father could have cancelled the registration of the automobile and that he could have had the insurance coverage cancelled. In 45 C.J.S. Insurance, § 829 at page 123 of the 1969 pocket parts it is said: "More generally stated, `permission' or `consent' must come from someone in a position to give or grant it, having a relation to or control over the car such as to entitle him to give or withhold permission or consent." It may be said that it is with that background that the attempt is here made to bring this case outside of the holding in Selected Risks v. Miller, supra , and Keystone Ins. Co. v. Fidelity & Cas. Co., supra .

The gist of the argument of appellants here is that, although as a general proposition where a named insured does not own the automobile he has no right to grant or withhold permission to use it as we have held in Selected Risks v. Miller, supra , and Keystone Ins. Co. v. Fidelity & Cas. Co., supra , here the father, although not owning the automobile, did have such control over it that he was entitled to grant or withhold permission to use it. Therefore, they say, he could grant or withhold permission to the son, the actual owner, to use it, thereby facing us with the question of whether the use by Hildenbrand, the second permittee, was within the scope of the permission granted by the son and, therefore, within the policy coverage. 7 Appleman, Insurance Law and Practice (1962), § 4358 states: ⁴¹⁸ "Where legal ownership is in one person, who is not the named insured, permission of the owner is not sufficient to give an operator protection under an omnibus clause in the policy; only permission of the named insured satisfies the policy requirements." And in § 4360 it is said: "But the actual owner of the automobile has no authority to grant permission for its use ordinarily where he is not the named insured." See in this regard, among other cases, Nolan v. American Sur.

Co. of New York, 221 F. Supp. 166 (E.D. Ky. 1963). 7 Am.Jur.2d, Automobile Insurance, § 115 (1963), states: "An omnibus clause requiring the permission of the named insured does not apply where the insurance is taken out in the name of one not the real