WILLIAMS v. GENERAL INS. CO. OF AMERICA et al.†
This is an appeal from a judgment in favor of plaintiff and against the defendant General Casualty Company in an action based upon a policy of automobile liability insurance. The policy was in the usual form, but in particular covered the operation of any automobile with the permission of the owner except one owned in whole or in part by the plaintiff or any member of his household.
It was alleged that while the policy was in force and effect, plaintiff was operating an automobile with the consent of the owner, which automobile was not owned in whole or in part by plaintiff or any member of his household; that while so driving said automobile, he collided with one Robert Young; that thereafter said Robert Young filed an action and recovered a judgment against plaintiff herein, Carl R. Williams; that said Carl R. Williams had paid said judgment; and that demand had been made upon the defendant insurance company for the repayment thereof under the terms of the policy, which payment was refused.
Plaintiff Williams prevailed at the trial of the instant case, and the defendant insurance company appeals from the judgment.
One question in particular, raised by the appeal, is decisive thereof and its determination necessitates the remanding of the cause for a new trial, for which reason it will be unnecessary to refer to the several other questions involved in the appeal.
Appellant established at the trial that after the accident it was informed thereof by respondent, and that on the day following the accident a representative of the insurance company was sent to interview respondent about the accident. The representative had a portable typewriter and wrote out on the typewriter a statement based on the information then and there obtained from respondent, which statement respondent then and there signed. Said statement contains the following: “The car I was driving was a 1926–Essex Coach which I bought from B. A. Elias on May 7th, 1932, for $20.00 at that time and the balance of $15.00 was to be paid on June 1st, 1932. I was to make what repairs were necessary to the car. B. A. Elias still holds the pink slip on the car and it is still registered in his name. The car has License number 5–M–2672 and motor number 358353. The car has been in my possession at all times and I have been driving it in my work as a County Health Inspector. I have made several repairs on the car and paid for same myself. Out of the $15.00 balance which I am to pay on June 1st, 1932 there will be possibly 4.50 taken out for a generator. The balance will make the complete payment for the car and the pink slip of ownership will then be delivered to me * * *.”
Relying on this signed declaration by plaintiff herein, the insurance company denied liability and did not therefore represent him at the trial of the damage suit resulting from the accident.
Defendant insurance company contends that plaintiff was estopped by reason of his signed statement, upon which the company acted, from denying his ownership of the car. At the trial of the instant case plaintiff, who had been in the insurance and newspaper business, but at the time of the accident was county health inspector, testified that he did not know what was in the signed statement at the time he signed it. The issue of estoppel was adequately raised by the evidence. It is quite true, as contended by respondent, that it is the general rule that an estoppel, to be available, must be pleaded; but to this general rule there is an exception. When it appears that no opportunity is afforded to plead an estoppel, the general rule does not apply. Mentry v. Broadway Bank, etc., Co., 20 Cal.App. 388, 129 P. 470; Guy v. Leech, 47 Cal.App. 704, 190 P. 1067; Blood v. La Serena L. & W. Co., 113 Cal. 221, 41 P. 1017, 45 P. 252; Hendricksen v. State Subsidiary, Ltd., 3 Cal.(2d) 459, 45 P.(2d) 190; Kenny v. Christianson, 200 Cal. 419, 253 P. 715, 50 A.L.R. 1297. Under such circumstances the issue may be, and generally is, raised by the evidence, which is sufficient. At the time the answer was filed in the instant case, the defendant and appellant had no knowledge that the respondent would testify that the statement was signed by him in ignorance of its contents, and therefore there was no reason for alleging in the answer that the plaintiff was estopped from denying the truth of such signed statement. Although the issue was raised by the evidence, it is just as effective and material as if raised by an allegation in the answer. As declared by Herman, in Estoppel and Res Judicata, vol. 2, § 1305, p. 1448, “Equitable estoppels growing out of acts in pais, constitute an exception to the general rule, and are equally conclusive whether pleaded or given in evidence.” The trial court found that plaintiff and respondent was not the owner of the car in question, but did not find on the issue of estoppel.
It seems obvious that this issue was vital and of the very essence of appellant's defense, and that it was therefore material appears to be equally obvious. The existence of an estoppel is a question of fact (Di Nola v. Allison, 143 Cal. 106, 76 P. 976, 65 L.R.A. 419, 101 Am.St.Rep. 84), and it is also well settled that the failure to find upon a material issue is a ground for a new trial (Lyden v. Spohn–Patrick Co., 155 Cal. 177, 100 P. 236; Black v. Harrison Home Co., 155 Cal. 121, 99 P. 494; Great Western Gold Co. v. Chambers, 153 Cal. 307, 95 P. 151), and, also, it is held that: “It is the duty of the court to find upon all the material issues, regardless of any request of the parties.” (Haight v. Tryon, 112 Cal. 4, 44 P. 318). See, also, Sun–Maid Raisin Growers v. Papazian, 74 Cal.App. 231, 240 P. 47; Pereira v. Smith, 79 Cal. 232, 21 P. 739. As was declared in Cargnani v. Cargnani, 16 Cal.App. 96, 116 P. 306, 307: “It is settled beyond controversy that it is the duty of the court to find on all the material issues, and a failure in that respect is ground for a new trial as a ‘decision against law.’ ‘A judgment based upon findings which do not determine all such issues is, in our opinion, “a decision against law” for which a new trial may be had. In such case a re–examination of the facts becomes necessary in order that the issues of fact may be determined.”’ In Banning v. Kreiter, 153 Cal. 33, 94 P. 246, 248, a case analogous, in effect, to the case at bar, the defendant claimed an easement of a strip of land for use as an alleyway. This right defendant supported by pleading estoppel, and this estoppel, in turn arose from the declaration of the authorized agents of plaintiff in selling the property. The court found for plaintiff but failed to find upon defendant's plea in estoppel. The Supreme Court held that this omission was prejudicial error, if there was any substantial evidence to support the plea. After reviewing the evidence, the higher court declared as follows: “Thus it is apparent that there is evidence, substantial and strong, to support the plea of estoppel, and it was therefore error for the court to fail to find upon it.”
In the case at bar there is evidence, substantial and by no means weak, to support appellant's claim of estoppel, and, as in the Banning Case, supra, it was error for the court to fail to find upon it.
The judgment is reversed, and the cause remanded.
I dissent. Not that abstractly I am not in accord with the controlling legal principles that are declared in the prevailing opinion, but that my perusal of the record herein leads me to the conclusion that such principles may not properly be applied to the facts. Particularly do I accept as a correct declaration of the law the foundational statement contained in the opinion of my associates to the effect that, although as a general rule, in order to be available to a party in an action, estoppel must be specially pleaded, an exception exists when it appears that the party who seeks to benefit by such a plea has had “no opportunity * * * to plead estoppel.” But it is just there that my first objection to the proposed judgment herein begins to operate. To my mind, at each and every stage incident to the prosecution of the action against the defendant, it was afforded not only ample opportunity to plead estoppel, but as well, if it had been within its power and its ability, to prove the facts necessary to the establishment of such a plea. As a matter of fact, as is practically demonstrated by the record, it did neither.
With reference to its opportunity: It is manifest that at all pertinent times the defendant had in its physical possession the very document or writing upon which its entire defense to the action depended; and that at the outset, the defendant knew, or at least should have known, as a legal proposition, that in the absence of evidence of fraud, or something akin thereto in the evidence, should plaintiff assert the ineffectiveness or nonbinding force of that writing, the only unanswerable replication thereto would be by way of a plea, supported by clear evidence, of, an estoppel. At no time in the course of the proceedings was the defendant misled or lulled into a sense of security by any act of plaintiff. Even before the action to recover a judgment for damages was brought against plaintiff by the victim of the collision that occurred between the automobile that was driven by plaintiff and that which was driven by the injured person, the defendant had been fully apprised by plaintiff that he entirely repudiated the statement contained in the writing to the effect that plaintiff was either the owner of the automobile that he was driving, or that he either had or claimed to have any “interest” therein. That much very clearly stands out and is established not only by testimony that was given by plaintiff, but as well by the several admissions made on the witness stand by the authorized investigator of claims of the defendant corporation. In part, the investigator thus testified:
“A. * * * I think Mr. Williams (plaintiff) called me up on the phone at the office.
“Q. And told you, did he not, that he had not purchased this car and owned no interest in it? A. I don't recall what the conversation was on the phone.
“Q. Well, was not that the substance of the conversation? A. It probably was. * * *
“Q. Well, you do recollect, don't you, that a dispute developed between Mr. Williams and your company as to whether this accident was or was not covered by his policy, don't you? A. That was some time after I had made the investigation and the file was out of my hands.
“Q. You recall a dispute of that kind arising, don't you? A. Yes.
“Q. And you recall that that dispute centered around the question as to whether Mr. Williams did or did not own an interest in this car, don't you? A. Yes.
“Q. And that the company, by virtue of his first statement, claimed that he did own an interest in it, you recall that? A. Yes.
“Q. And you recall that that dispute arose prior to the time that the personal injury action was commenced, don't you? A. Yes.”
Mr. Williams (plaintiff) confirmed the facts respecting that situation. In substance, he said that at a time after he had made his written statement to the company, he had a conversation with the investigator, and then said that he had “rented that car, but that (he) considered that (he) had an option on every car on Mr. Elias' lot.”
Not only before the date when the personal injury action was commenced was the defendant fully aware of plaintiff's position with reference to his repudiation of the statements contained in the writing which theretofore he had delivered to the defendant, wherein, in effect, he admitted a possible equity in the automobile, but certainly, and without the least equivocation, on the trial of the action, at its very inception, was the defendant again particularly notified by testimony given by plaintiff, that he neither owned the automobile, nor had any interest in it. In that regard, as the first witness called on the trial, in part, plaintiff testified as follows:
“Q. Did you own that automobile? A. I did not.
“Q. Or any interest in it? A. I did not.”
Furthermore, the evidence shows that in the course of its independent investigation of the question of whether plaintiff owned, or had any interest in, the automobile, even prior to the date when the instant action was commenced, the defendant reliably had been informed through other sources of information just what the situation was with respect to the ownership of, or option to purchase, the automobile; from all of which the defendant was again placed on notice as to the fact, that, in effect, plaintiff not only repudiated his statement of ownership of the automobile, but also that on the trial of the action, in all probability, he would continue to repudiate such statement and the effect thereof. But even in such circumstances, and with such knowledge and notice of facts on the part of the defendant, with such full “opportunity” on its part so to do, at no time during the course of the trial, either in the submission of evidence or in the argument of counsel in the case on its merits, or at any time thereafter, did the defendant either plead, or attempt to plead, or even suggest, an estoppel. It therefore should follow that never having availed itself of any one of its several manifest opportunities to plead estoppel, the defendant should not now be permitted to successfully raise the question for the first time on its appeal from the judgment.
The prevailing opinion also contains the statement that “the issue of estoppel was adequately raised by the evidence.” Necessarily, if at all, it must have been raised in that way. The original issues made by the pleadings assuredly did not do so. At the outset of the trial that much was negatively stipulated by the parties. At that time, after respective counsel apparently had orally agreed as to what issues were involved, the judge of the trial court said: “As I understand, I have only two issues, one is the question arising out of the ownership of the automobile; and the other is the question whether the defendant has waived its right under the policy to have the papers turned over to it. So that, with that understanding, it would seem to be unnecessary to spend any further time going through these particular allegations of the pleadings.” To which statement the attorneys who represented the parties responded respectively as follows:
“Mr. Belcher: That is my understanding of the matter. Is that yours?
“Mr. Pinkham: That is perfectly clear.”
So that beyond peradventure, the question of whether the plaintiff was estopped to deny his ownership of the automobile was not made an issue by the pleadings; consequently it could be injected into the case by no means other than by evidence introduced and accepted as binding on the trial of the action. But that suggestion, although admitting the possibility of raising the issue in such a way, may not be considered as conclusive as to whether an issue actually was thus raised. Generally speaking, and without reference to the instant situation, the assumed fact that an issue of estoppel is contended to have been raised solely through evidence introduced on the trial of an action does not relieve the party who asserts the existence of an estoppel from establishing the fact that the issue was properly raised. In other words, in order that it may be properly presented and proved, an estoppel independently raised by the evidence must depend upon the same basic rules that govern in an estoppel that is presented by written pleadings. Hence the question regarding the correctness of the statement contained in the prevailing opinion herein, that “the issue of estoppel was adequately raised by the evidence.”
In connection with the required foundation for the establishment of an estoppel, the opinion in the case of Bank of America v. Pacific Ready–Cut Homes, 122 Cal.App. 554, 561, 10 P.(2d) 478, 481, contains the statement that: “Generally speaking, there are four elements essential to the application of the doctrine of estoppel: First, the party to be estopped must be apprised of the facts; second, he must intend that his conduct shall be acted upon, or his conduct must be such that the party asserting the estoppel had a right to believe that it was so intended; third, the party asserting the estoppel must be without knowledge, and without ready means of obtaining knowledge, of the true state of facts; and, fourth, he must rely upon such conduct to his injury.” (Citing authorities.)
Applying such tests to the facts herein, it would seem plain that at least as to the third and the fourth essentials, the legal requirements have not been met. From that which hereinbefore has appeared, it is indisputable that the defendant not only had “means of obtaining knowledge of the true state of facts,” but also that in pursuit of its independent investigation of the facts, it actually acquired “knowledge” from the dealer with whom plaintiff had made his optional arrangement respecting the possible purchase by plaintiff of some automobile, of exactly what the situation was with reference to the asserted “ownership” by plaintiff of the automobile in question; and that “the true state of facts” was wholly at variance with the statement upon which the defendant depended to establish plaintiff's estoppel. In addition thereto, in remembering that the burden of proving an estoppel was on the defendant, it should be noted that neither of the witnesses introduced by the defendant in its behalf offered even the slightest affirmative evidence to the effect that it was without “knowledge,” or that it was unaware of the true facts. More than that, and in considering the necessary element of reliance by the defendant upon the truth of the written statement made by plaintiff, every scrap of evidence pertinent thereto clearly indicates that the defendant did not so rely. In fact, a declaration to the effect that the defendant was misled in that regard could find not the slightest support in the evidence. Its own showing in that particular was to the contrary; and that situation, added to the testimony given by witnesses introduced by plaintiff, could leave not the least doubt that after being in receipt of plaintiff's repudiation of his former statement of his ownership of the automobile, it proceeded to a searching and complete independent investigation of the facts respecting such ownership, with the result that in truth it was in no position either formally to allege, or, either specifically or by implication, orally to assert, that it had relied upon plaintiff's original written statement concerning either his ownership of the automobile or his equitable title therein or thereto. Hence, my inability to agree with my associates in their declaration, as hereinbefore set forth, that “the issue of estoppel was adequately (or at all) raised by the evidence.”
As a final and conclusive reason for the reversal of the judgment herein, in substance it is confidently asserted that since estoppel of plaintiff was an issue on the trial of the action, the trial court committed prejudicial error in failing to make a finding of fact to that effect. Again, I find myself not entirely in harmony with the conclusions reached by my respected associates. It ought to be clear that if from the evidence no proper finding of fact would be possible other than one against the contention made by the appellant, an error made in failing to find upon the issue in question would not be prejudicial to the defendant; and consequently not available as a reason for reversal of the judgment. And just that situation would appear to prevail: The defendant failed to establish estoppel; the evidence was all against any such conclusion; and if the court had made a finding of fact in that connection, necessarily it would have been that no estoppel was created. But even assuming the possibility that ordinarily a finding on the issue should have been made, it may be that the defendant is not entitled to complain of the failure of the trial court in that regard: No formal issue of estoppel was presented by the pleadings; the stipulation made by the parties did not include it; the issues as stated by the trial judge, to which the parties expressly assented, made no reference to any such issue; nor at any time during the course of the trial, or during the argument, did the defendant suggest, or even hint, that such an issue was before the court. Furthermore, the record is silent as to any request having been made by the defendant to the trial court that any finding be made with respect to any such possible issue; no motion for a new trial was made; the trial court was given no opportunity to correct any alleged error respecting its failure to find on such an issue. In other words, in no manner was the trial court ever informed that the defendant relied upon an estoppel, or that a finding with reference thereto was either expected or required. In such a situation, is it the law of the land that a defendant may say nothing; take a chance on obtaining a favorable judgment in its behalf; and failing in that regard, successfully raise the concealed point for the first time on the appeal from the judgment? Rather, is it not more nearly in accord with the administration of justice to declare that, considering the circumstances, the defendant effectively waived whatever right to a finding of fact it ordinarily might have had?
I concur: YORK, J.