Schmidt v. State Farm Mutual Automobile Insurance

SHINN, P. J. In this action plaintiff Schmidt, as administrator of the estate of Lawrence E. Stephens, deceased, sought judgment declaring that the estate is indemnified by defendant’s policy of insurance against liability for damages arising [297]out of Stephens’ operation of an automobile. Plaintiff obtained judgment and defendant appeals.

On June 18, 1956, the automobile was registered to Roberta F. Miller or G. A. Miller as registered owners. They had purchased the car under a conditional sale contract from A1 Harmon, Inc. The contract was assigned by Harmon to Pacific Finance Corporation which was registered as legal owner.

October 5, 1956, G. A. Miller entered into an agreement by which he assigned all interest in the car to Stephens. The court found that one of the conditions of the agreement was that it was subject to the consent of Pacific Finance. On the same day Miller and Stephens went to Pacific Finance. Miller signed his name on the reverse side of the registration card (white slip) but did not write down his address, which appeared upon the obverse side; Miller also signed the owner’s certificate (pink slip); he delivered the white slip and the caito Stephens but did not deliver the pink slip.

Pacific Finance retained the pink slip, took from Stephens a credit statement and informed him he would have to obtain new insurance on the car for himself. October 8th, Stephens had an accident with the ear in which he met his death, Wesley M. McGhee was killed, Leslie E. Reedhed was injured and property of Ringly Truck Lines was damaged. The widow of McGhee, Reedhed and Ringly Truck Lines brought an action against the estate seeking recovery for the alleged negligence of Stephens. Defense of the action was tendered to defendant, which refused to defend, and denied liability.

Under the liability policy issued to the Millers, Stephens was covered if at the time of the accident the Millers had not parted with their title and Stephens was using the car with their permission.

The court found that the certificate of transfer was not signed by Pacific Finance as legal owner until October 11th, when it signed both as a legal owner under the Millers and as new legal owner under Stephens. The certificate and an application for reregistration to Stephens as registered owner and Pacific Finance as legal owner were mailed to the Department of Motor Vehicles on October 11th. The court also found that no title had passed to Stephens before the occurrence of the accident.