Title: Farmers Mut. Ins. Co. v. Un. Pac. Ins.

State: oregon

Issuer: Oregon Supreme Court

Document:

Affirmed January 25, 1956.
*299 Charles S. Crookham, Portland, argued the cause for appellant. With him on the brief were Vergeer & Samuels, Portland.
Wayne A. Williamson, Portland, argued the cause for respondent. With him on the brief were Mautz, Souther, Spaulding, Denecke & Kinsey, Portland, and James B. O'Hanlon, Portland.
Before WARNER, Chief Justice, and ROSSMAN, LATOURETTE, and PERRY, Justices.
AFFIRMED.
PERRY, J.
This is a suit for contribution. The plaintiff Farmers Mutual Insurance Company issued its policy of automobile insurance to one Rudolph F. Moltz, an employee of the Don Meurs Logging Company, upon a one-half ton Ford truck used by Moltz solely for his convenience in going to and from his employment, and not as an accessory for the use of his employer.
On June 13, 1951, the Don Meurs Logging Company, while engaged in its logging activities, needed additional chokers in its work, and asked Mrs. Rena V. Meurs, the wife of Donald Meurs, to drive to Portland to secure this equipment. Mr. Moltz volunteered the use of his motor vehicle for the purpose of this errand, *300 and the parties agree that no cash or other consideration was to be paid Moltz for the use of the truck. While in Portland, Mrs. Meurs was involved in an accident, and the plaintiff as a result of this accident was required to pay the sum of $2,000.
At the time of the accident the defendant had in full force and effect its motor vehicle insurance policy insuring the Don Meurs Logging Company for liability for bodily injury and property damage caused in the operation of a Mack log truck and a Paige & Paige log trailer. Attached to the policy as a part thereof were the following endorsements:
*304 The plaintiff contends that these hired automobile endorsements include the use of the Ford truck driven by Mrs. Meurs at the time of the accident, and, as a result, the defendant is required to share proportionately in the loss.
The trial court found for the defendant and the plaintiff has appealed.
It is the contention of the plaintiff that the defendant in defining the words "hired automobile" as a motor vehicle "used under contract," included therein any motor vehicle used in the furtherance of the insured's business, whether compensation for its use was to be paid or not. The plaintiff arrives at this conclusion by reasoning that even the gratuitous use of a motor vehicle by an assured of the defendant under such an endorsement creates a bailment, which is in effect a contract.
There is considerable controversy between courts and text writers as to whether or not a gratuitous bailment may be considered truly as a contract, because of the lack of consideration, that necessary element of contracts. Brown on Personal Property, 225, Bailments, ch X § 73; 4 Williston on Contracts, 2902, § 1039.
However, it is not necessary for us to enter into that controversy in this case, but only to determine whether or not it was the intention of the defendant and its assured, by using the words "used under contract" in the "Hired Automobile Endorsement," to include those bailments gratuitous to the bailee, or only those which were lucrative to a bailor.
1-4. In the case of Clark Motor Co. v. United Pac. Ins. Co., 172 Or 145, 149, 139 P2d 570, this court stated:
As stated in the above-cited case, "reasonable doubt as to the meaning of a policy must be resolved in favor of the insured," but in the endorsements before us, viewing them in their entirety, there can be no reasonable doubt as to the type of contract referred to in the defining clause. The premium to be paid for this coverage, if used, is "cost of hire," and there is included in "cost of hire" the amount incurred as "remuneration of the named insured's chauffeurs employed in the operation of such automobiles." Also, there is provided authority for the insurer to inspect the records of the assured for the purposes of determining and verifying these expenses.
Endorsement No. 2, providing for a minimum premium in either of two events, specifically refers to the expense incurred by the assured in the hire of automobiles.
5. It is clear, the word "hire" preceded by the words "cost of" as used in the endorsements can only signify the use of a motor vehicle for monetary recompense, or consideration to the bailor. Therefore, we can reach but one conclusion; that is, the word "contract" as *306 used in the policy refers to contracts based upon a monetary consideration.
The views above expressed make it unnecessary for us to consider the manner of applying a ratio of contribution between the parties, or attorneys' fees under ORS 736.325.
The decree of the trial court is affirmed.