First National Bank v. Malady , 242 Or. 353 ( 1966 )

SLOAN, J.

This declaratory judgment proceeding was initiated by plaintiff Truck Insurance Exchange to test the coverage of a liability insurance policy it had issued to plaintiff Sites Freight Lines, Inc., and to the individually named plaintiffs Herman Sites, now deceased, and his wife Pauline. Herman was the principal owner of the Sites Freight Lines, Inc. The question presented relates to the omnibus clause of the policy.

A car specifically listed in the policy was involved in an accident at a time when the car was being operated by persons who were not named as insureds. The complaint sought a declaration that those persons were operating the car without the permission of a named insured. The named defendants are those who were harmed, physically or financially, by the accident and whose rights are alleged to be adverse to plaintiffs. The trial jury found that the use of the car at the time and place of the accident was with the permission of a named insured. Plaintiffs’ appeal from the judgment entered on the verdict. Exposition of the case will be simplified by referring to the primary plaintiff only, Truck Insurance Exchange.

The omnibus clause of the policy read:

‘ “* * * The unqualified word ‘insured’ includes * * * (2) with respect to the described automobile or a substitute automobile, any other person or organization legally responsible for its use, provided the actual use of the automobile is by the named insured or with his permission,

The real thrust of the appeal is that the court erred in ruling that plaintiff had the burden of proof. The significant assignment of error is directed at an instruction to that effect given to the jury, to which timely exception was taken. Most of the other assignments are related to this decision of the court. Before explaining our conclusions on this, and other questions presented, the facts should be related.

One of the automobiles described in the litigated policy was a 1951 Chevrolet. Although this car was owned and used almost exclusively by Dale Sites, a 2á-year-old son of Herman and Pauline Sites, the car was registered in Herman Sites’ name. The record does not reveal why Herman retained the registered title.

On the evening of March 9, 1963, Dale Sites, accompanied by two companions, Coffield and Sheets, drove the Chevrolet to a farm house of a Mr. and Mrs. Murphy who were mutual friends of the three young men. Coffield was a cousin and frequent companion of Sites. The Murphy home was near Estacada. The young men and their host engaged in some “horse play”, beer drinking and other activity. While there, it was decided that some of the group would do some night deer hunting. Whether or not Dale Sites was interested in the hunting was uncertain. There was some evidence that he intended to participate. The young men had a rifle suitable for the intended purpose, but no ammunition.

Dale loaned his car to Sheets for the purpose of going to a store in Estacada to buy ammunition. Coffield accompanied Sheets in Dale’s car. Coffield and Sheets left the farm about 10:30 p.m. There was evidence that they arrived at the store in Estacada but that no ammunition was available there. At 2:30 a.m. on the following morning, the car was involved in a collision on U. S. Highway 26 a few miles east of Gresham, at a point some 15 miles north of the place of departure. Both Sheets and Coffield were killed, the occupants of the other car were killed or maimed. It was uncertain as to whether Sheets or Coffield was driving the car at the time of the accident. It is not known where the two young men had been in the interval between the time they left the store in Estacada and the time of the accident. The rifle was found in the car with some shells for the rifle taped to the gun.

Dale Sites testified that he gave permission to Sheets only to use the ear and for the purpose of going to Estacada for ammunition. Dale testified, in effect, that he assumed they would go to Estacada and return and would not be gone for long. Defendants’ claim that all of the evidence could have caused the jury to reject as untrue the testimony of Sites, which is what the jury did. Because of the gaps in the sequence of events and the uncertainty as to who was driving at the crucial time, it is apparent why the placing of the burden of proof was important in this case. The issue in the instant case was one of fact, not of law.

Plaintiff must rely on Travelers’ Ins. Co. v. Greenough, 1937, 88 NH 391, 190 A 129, 109 ALR 1096. Greenough was also a case involving permissive use of a car. The New Hampshire court ruled that if the case had been one brought against the insurance company the burden of proof would fall on the person claiming policy coverage, therefore, the burden should not shift merely because the insurance company was the initiating party. The court reaches this categorical result without reference to the nature of the issues presented for determination. The case has been criticized by two of the leading authorities on the subject.

In 2 Anderson, Declaratory Judgments (2d ed 1951) at page 872, et seq., it is said the Greenough case is without precedent or reason. At 6 Moore’s Federal Procedure, page 3157, 1953, it is said that “* * * the Greenough doctrine [is] unwise in its own context. The reasons that underlie the general rule that the moving party must bear the burden of proving the prima facie elements of his claim are also applicable in the vast majority of declaratory actions. Generally, it is reasonable and fair that one who brings another into court should have the burden of proving the prima facie elements of his asserted claim.” And see a comprehensive review of Developments in the Law, Declaratory Judgments, 1941-1949, 62 Harv L Rev 787 at 837. The criticism of the Greenough case is justified. To follow that decision would mean that a person claiming coverage would always have the burden of proof, regardless of the issues presented by the pleadings. In addition to being unwise, the rule would violate ORS 41.210 that places the burden upon him who asserts an affirmative issue. We adopt the rule that in most of the declaratory judgment cases the plaintiff initiating the action and who makes affirmative allegation must bear the burden of proving what he alleges.

In the instant case plaintiff’s complaint alleged the affirmative fact that Coffield was driving when the accident occurred. It was incumbent on plaintiff to prove its allegation that Coffield was the driver. The only basis for shifting the burden of proof to defendants, in this case, would be to apply the categorical rule of Greenough and say that the insurer never has the burden. That we decline to do. It was proper, to place the burden on this plaintiff to prove the allegations of the complaint.

We recognize that there may be cases presented in which the issues involved would reverse the burden and perhaps the order of proof. If so, the cases must be determined as they arise.

The remaining assignments of error, even though directed to particular instructions or rulings of the court are, in reality, the equivalent of a motion for a directed verdict. Each assignment is predicated upon a claimed lack of evidence. One assignment claims error because the trial court refused to withdraw the case from the jury and decide the issue on a question of law. We view the case as one for jury determination.

Dale Sites, who gave the permission for use of the car, was the actual owner of the car and had every right to loan it to others. This would be true whether he was acting as the owner or derivatively from the authority granted by his father, Herman. Dale did testify that he refused permission for Coffield to drive and that he expected that they would drive to Estacada, get the ammunition and return. The evidence of all of the events of the evening could have lead the jury to believe that the three young men were out on a lark and that it was doubtful that such specific instructions and limitations, in the circumstances described in the evidence, were expressed. We think it unnecessary to detail this evidence. It would have been for the jury to infer whether the permission was granted to go to Estacada or if it were granted to get ammunition.

And having set about proving the essential allegation that Coffield was the driver at the time of the accident, plaintiff cannot claim that the evidence was conclusive in that respect. The evidence in this respect was clearly for the jury.

The other issues argued as to what the evidence did or did not prove actually relate to the weight and the truth of plaintiff’s evidence and the inferences to be drawn from it. This was jury work. The evidence was sufficient to go to the jury to answer the direct question put to the jury: Was the actual use of the car at the time and place of the accident with the permission of a named insured? We find nothing to cause a reversal.

Respondent William J. Masters, as the personal representative of the estate of Russell Sheets, deceased, filed a cross-appeal from a ruling of the court denying him his attorney fees. We can find no basis for the allowance of attorney fees. It is apparent that ORS 736.325 does not apply to this case. There is no other provision, by contract or statute, which would require plaintiff to pay attorney fees. See Adair v. McAtee, 1964, 236 Or 391, 393, 385 P2d 621, 388 P2d 748.

Affirmed.