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District Court of Appeal, Second District, Division 3, California.


Civ. 13134.

Decided: July 29, 1942

Jennings & Belcher, of Los Angeles, for appellant. James C. Hollingsworth, of Ventura, and Henderson & Churchill, of Santa Paula, for respondents.

Plaintiffs, husband and wife, recovered judgment against Stanley Reis, John Reis and Fred W. Gray as damages for injuries to their persons and property sustained in a collision of their automobile with another car owned by defendant Gray and driven by Stanley Reis at the request of John Reis, who was riding in the car at the time. Defendant Gray appeals.

The judgment against Gray can be sustained only in case the evidence was sufficient to support the finding of the trial court that the car was being driven at the time of the accident with the permission of Gray, in which case the latter would be responsible for the negligence of the driver. As we have concluded that the judgment must be reversed, our discussion will cover all phases of the case as they are presented in the briefs.

Defendant Gray was a dealer in secondhand cars, Frank P. Hume was his sales manager, and John Reis was employed as one of his salesmen working on a lot from which cars were sold. At about 9 p.m. June 13, 1940, John Reis, being the only person on the lot, left his own car there and took an Oldsmobile from the lot to his home, kept it there the rest of the night, did not go to work the following day (his birthday), but during the day drove the car some 37 miles. In the evening John and his brother Stanley and two young women took a ride in the car; Stanley, at John's suggestion, drove the car from Los Angeles on the coast highway to the outskirts of Oxnard, some 63 miles, where they turned around and came back to the point where the accident occurred. John rode in the rumble seat, part of the time with one of the girls and the rest of the time alone. The accident occurred some 23 hours after John had taken the car from the lot of defendant Gray. During this time John was not engaged at all in the business of his employer.

For the purpose of a discussion of the matter of implied consent from a viewpoint most favorable to respondent, we shall assume as a premise, without conceding its verity, that as Gray owned the car, John was his employee and Stanley drove the car at the suggestion of John, an inference could be drawn that Stanley was driving and using the car with the implied consent of Gray. Such inference would be sufficient to support an affirmative finding on that issue, unless the evidence contrary thereto was so clear, positive, uncontradicted and of such a nature that it could not rationally have been disbelieved. If there was such complete evidence opposed to the inference, the fact of implied consent was disproved as a matter of law. Blank v. Coffin, 1942, 20 Cal.2d 457, 126 P.2d 868. We think there was such evidence and that upon the undisputed facts of the case the inference of permissive use alone does not support the finding. Because of this conclusion it will be necessary to make a somewhat comprehensive statement of the evidence.

First we shall notice the testimony of John Reis, for if there is not to be found therein contradiction of the defendant Gray and certain of his witnesses whose testimony we shall mention later, the evidence that John Reis had no express or implied permission to take the car from the lot for personal use on a pleasure trip stands without contradiction. As we shall point out, there was no such contradiction. Before giving specific attention to the facts testified to by John, we might say that it was shown that he had been employed by Gray as a salesman upon a former occasion and had been discharged for taking a car off the sales lot without permission and retaining it overnight. A year and a half after this incident he was reemployed and had been working for two or three weeks before he took the Oldsmobile that was involved in the accident.

John testified that upon several occasions he had taken cars off the lot to demonstrate them to prospects; that on these occasions neither Gray nor his manager Hume was on the lot; that he had occasionally driven a car from the lot during the noon hour to a lunch room a few blocks away and that Mr. Hume had had knowledge of his making such use of cars. He testified that before he took the Oldsmobile on the night of June 13 he had not asked Gray or his manager for permission to use it, had not received such permission and that he took it without their knowledge. The only explanation he offered for his actions was that he had some thought of buying the Oldsmobile and wished to try it out. He testified that he had mentioned the matter to Gray, but the latter denied this. He had been selling cars for about five years, was familiar with motors, had run the motor of the Oldsmobile while it was standing on the lot and had listened to it; that on the night of June 13 he drove it six or seven miles to his home, was not entirely satisfied then with the extent of the demonstration but by the time he had driven it the next day for a total distance of some 37 miles he was more than satisfied with its condition. This was before the start of the trip to Oxnard. The price of the Oldsmobile was $295. The down payment would have been $100. John's own car was worth not more than $50 and in the time he had worked for Gray he had earned only $41 and he had no money but in fact had endeavored unsuccessfully to borrow $25 from Gray at the time he went to work and later had obtained a $10 advance on his commissions before they were due. The sum of this testimony is that John had demonstrated cars to customers a few times without the prior knowledge or consent of Gray or Hume; that he had used a car to go to lunch a few times, on which occasions he told Hume where he was going; that he took the Oldsmobile and kept it because he had in mind buying it and wished to see how it ran; that he was entirely satisfied with its condition before he started the ride to Oxnard.

There is one other fact testified to by John, namely, that he told a Mr. Daly, Gray's bookkeeper, that he intended to take the Oldsmobile from the lot. This testimony, received over defendant's objection, will be discussed later.

Defendant Gray testified to the previous employment of John and his discharge for taking a car without permission; of having told John that he was being discharged because of his violation of that rule; that he informed him at the time of his reemployment, which he had under consideration for two days before deciding on it, that their rule was very strict as to the removal of cars from the lot; that no car was to be taken without the permission of himself or Hume; that John had never mentioned to him a possible purchase of the Oldsmobile; that there had never been a time to his knowledge when John had taken a car off the lot at lunch time or on any occasion without obtaining permission; that he did not know that the Oldsmobile had been taken from the lot until the day after the accident; that Hume was in charge of the lot when Gray was away; that Daly had nothing to do with the sale of cars or the used–car end of the business; that the cars carried no collision insurance and when a demonstration was allowed it was confined to a drive of four or five blocks, and that no salesman ever took a car off the lot prior to the occasion in question without the consent of Gray or Hume.

The witness Hume testified that he was sales manager for Gray in charge of the cars and employees on the used–car lot; that he had never known of any occasion when John took a car off the lot prior to the occasion in question except for a demonstration around four or five blocks; that on the day John came to work Hume instructed him that no car was to be taken off the lot for a demonstration without notification to Gray or Hume; that John had never discussed a possible purchase of the Oldsmobile with him; that he did not discover the disappearance of the Oldsmobile for 48 hours after it had been taken; that he had given no one permission to take the car, and that he knew of no occasion when John had used a car for the purpose of going to lunch or that he had ever taken a car off the lot without express permission.

John Reis did not deny having been instructed that cars could be taken off the lot only for demonstration purposes and then only with the consent of Gray or Hume.

Stanley Reis testified that he had no intention of buying the car and did not drive it for the purpose of demonstrating it to himself.

Whatever evidence there was in support of or opposed to the inference that the car was being driven with the consent of Gray at the time of the accident must be found in the foregoing facts and the testimony of the witnesses.

It may be conceded that if full credence was given to the testimony of John Reis the conclusion was properly drawn that he had implied permission to demonstrate the car to himself in a usual manner. The use of the car for an extended pleasure trip was quite another matter.

We therefore do not question the sufficiency of the evidence to show that John had implied permission to take the car in order to try it out as a prospective purchaser. When we speak of the inference of consent, we refer to consent to the use of the car by Stanley as distinguished from its use for limited purposes by John.

Each case where the question of an owner's consent is involved necessarily rests upon its own peculiar facts. A case such as the one before us, where all of the direct evidence and strong circumstantial evidence was opposed to the inference that the use of the car at the time of the accident was permissive and in which the finding of the trial court was in accordance with the inference, calls for an examination of the entire record to ascertain whether there was reason to reject the direct and circumstantial evidence and follow the inference, or whether the evidence opposed to the court's finding was reasonable, uncontradicted, unimpeached, and in all respects so satisfactory as to compel its acceptance. Circumstantial evidence is frequently of great importance, for it may tend strongly to show that the claim that the driver was using the car with the owner's permission is highly unreasonable, which we think is true in the present case, or not unreasonable at all under facts such as those involved in Blank v. Coffin, supra, 1942, where it was held error to direct a verdict for the defendant. In that case an employee had been given the exclusive use and possession of his company's car and he used it continually in his business, even in the evenings, but also frequently on his own pleasure jaunts and under circumstances which would readily have brought to the employer's attention his personal use of the car. The case was held to be one in which the jury could have believed that the employee's superiors probably knew of such personal use and winked at it and for that reason it was held that the inference that the employer did consent might reasonably have been followed by the jury in preference to the testimony of witnesses that there was no such consent. A comparison of the facts of that case with those of the case before us is appropriate because the one case involved a not unusual situation where the inference of implied consent could properly be drawn from the entire evidence, whereas our own case presents a situation, also not unusual, where evidence of a positive and satisfactory character, both direct and circumstantial, reasonably and logically dissolves the supposed inference.

Gray's secondhand cars were not insured against collision damage; his sales lot was kept open until 10 p. m. for the accommodation of customers; he permitted short demonstrations to be made by his salesmen with the consent of himself or his manager; he had discharged John Reis from a former employment for using a car without his permission, and when he reemployed him he gave him strict instructions not to repeat his escapade. It would have been an unbusinesslike and foolish policy to allow his salesmen to use his uninsured automobiles for their own business or pleasure, to say nothing of allowing their retention overnight. These circumstances of the case and the reasonableness of Gray's rules for his employees would have been sufficient to warrant the trial court in making a finding contrary to the inference of permissive use. And if we turn to the testimony of John Reis and accord it the greatest possible weight we find that under a pretext that he wished to buy the car he took it home, kept it all night and the following day for the alleged purpose of demonstration, and after he was entirely satisfied with it, took his brother and a couple of girls on a 125–mile pleasure trip. If an inference of permission to keep the car for 23 hours is consistent with the undisputed facts of the case, when would the permission have run out? And would it have lasted until the owner discovered the loss of the car and demanded its return? These questions bring us back to the realities of the situation. When we look not only to the facts of Gray's ownership and John's status as an employee, but also to the entire, firmly established and indisputable facts of the case, which must be considered as a whole, we have to say that an inference that the driver of the car was using it at the time of the accident with the owner's consent cannot be drawn, or, stating it in another way, that the inference which might be drawn from certain of the facts is dispelled, if it is recognized at all, by the overwhelming weight of the evidence, which satisfies our minds that the inference can no longer reasonably survive. Whichever way the proposition is stated, the result is that whenever it becomes necessary to determine whether the evidence opposed to the inference is so strong and satisfactory that the inference ceases to furnish substantial conflict in the evidence upon the point, the question on appeal becomes purely one of law.

The instant case is governed by the principles stated in Engstrom v. Auburn Auto. Sales Corp., 1938, 11 Cal.2d 64, 77 P.2d 1059; Crouch v. Gilmore Oil Co., Ltd., 1936, 5 Cal.2d 330, 54 P.2d 709; and Maupin v. Solomon, 1919, 41 Cal.App. 323, 183 P. 198. In the Engstrom case the inference of permissive use was held to be overcome by uncontradicted testimony that the driver, who had borrowed the car, had promised to return it a day prior to the accident and had retained it longer without the owner's consent. And so in our case, if John Reis had implied authority to demonstrate the car to himself, his right to use it was only a right to demonstrate it and the retention of the car thereafter and Stanley's driving it on a pleasure trip were wholly unauthorized in any view of the facts. Under the circumstances there was the same duty to return the car promptly that there would have been had Gray given his express consent that the car be tried out and John Reis had expressly promised to return it when the demonstration was over. The finding that the automobile was being driven at the time of the accident with the implied consent of the defendant Gray is unsupported by the evidence.

We think the trial court was probably influenced to make the finding as to permissive use by certain testimony that was admitted upon the promise of counsel for plaintiffs to lay a foundation for it, which they failed to do. The court permitted John Reis to testify that either on the night that he took the car or the night before, he told a Mr. Daly he was going to take it and try it out. It appears without dispute that Daly was an auditor and clerk in the employ of appellant, that he took care of the books and had no other connection with the business. No authority was shown on the part of Daly to permit cars to be taken from the lot. Appellant objected to the introduction of this evidence and it was admitted only upon the promise that it would be connected up by a showing of authority on the part of Daly. No such showing was made. Appellant moved to strike out the testimony on the ground that it related to matters entirely outside the scope of Daly's employment and was incompetent to show knowledge on the part of appellant that Reis intended to take or had taken the car. This motion was denied. The evidence was clearly inadmissible upon that issue. “An agent's knowledge of matter which is outside the scope of the agency or not related to its purpose is not imputed to the principal.” 3 C.J.S., Agency, § 264, p. 197; Foorman v. Myers, 1934, 1 Cal.App.2d 719, 722, 37 P.2d 469.

It is urged by respondents in justification of the ruling that the conduct of Reis was material to show that he acted “in accordance with customary routine” and not surreptitiously and that he believed he had permission to use the car. No such contention was made in the court below. We have carefully read the record pertaining to the rulings upon the objection and the motion to strike out this testimony, and it appears therefrom that the sole question upon which the court ruled was one relating to the authority of Reis to take the car and to the related question of the knowledge, if any, that was possessed by appellant or his employees of Reis' intention to take it. The state of the record is such that we must presume that the court gave some weight to this incompetent testimony, and for that reason we believe that the error was prejudicial.

Furthermore, despite the inference which we assumed in the beginning for the purposes of discussion of the first point considered, we believe that under the undisputed facts Stanley Reis could not on any theory be deemed to have been using the car with Gray's implied consent. His driving it was no part of the demonstration of the car either for his benefit or for John's. Implied consent that one person may use a car for a particular purpose is no consent at all that he may turn it over to whomsoever he pleases to be driven for any other purpose. This rule is stated in Howland v. Doyle, 1935, 6 Cal.App.2d 311, 314, 315, 44 P.2d 453, and has been followed in Sommers v. Van Der Linden, 1938, 24 Cal.App.2d 375, 381, 75 P.2d 83; Garrison v. Booth, 1935, 10 Cal.App.2d 738, 742, 52 P.2d 535; and Engstrom v. Auburn Auto. Sales Corp. supra, 1938, 11 Cal.2d 64, 68, 77 P.2d 1059. The rule of these cases is to be distinguished from the one followed in Haggard v. Frick, 1935, 6 Cal.App.2d 392, 44 P.2d 447, and cases therein cited, holding that an owner invests the borrower of his car with authority to select an operator for it where he loans it without definite direction or reservation as to its use.

Finally, it is contended by respondent that it is to be presumed under section 1963, subd. 1, of the Code of Civil Procedure that a person is innocent of crime or wrong; that under section 503 of the Vehicle Code, St.1939, p. 1481, it is unlawful for any person to drive or take a vehicle not his own without the consent of the owner thereof and in the absence of the owner and with intent to either permanently or temporarily deprive the owner thereof of his title to or possession of such vehicle, whether with or without intent to steal the same, and that when effect is given to said section 1963 there arises a presumption that the car was being driven with the consent of the owner.

We may assume, without so deciding, that the presumption of innocence sought to be invoked should be given effect to the full extent which the proven facts will allow, as to the conduct of both Stanley and John, but when this is done the conclusions we have heretofore stated are not affected in any degree. So far as Stanley's conduct is concerned there was no evidence whatever that he was implicated with John in the taking of the car or had reason to believe that John's permission to use it was limited to a demonstration of it. He was driving the car at John's suggestion, he was under no active duty to return it to Gray and committed no wrong in failing to do so. His innocence of crime or wrong did not depend upon his having Gray's permission to use the car but upon his good faith in acting upon John's permission to drive it, and the presumption on this point is in his favor. 31 C.J.S., Evidence, § 126, p. 745; Hedden v. Waldeck, 1937, 9 Cal.2d 631, 636, 72 P.2d 114; Arakelian v. Sears, 1921, 53 Cal.App. 646, 653, 200 P. 757. Not only would it be wholly unreasonable to believe from the evidence that Stanley, himself, had Gray's permission to use the car, but such consent would be irrelevant, upon any factual basis derivable from the record, to the question of his innocence, and for both of these reasons the presumption as related to his conduct, can have no application. No more can the presumption of innocence be applied to the conduct of John in the decision of any material issue. In the first place it is not John's negligence that is sought to be imputed to Gray––only Stanley's. Granted that the presumption of innocence if extended in John's favor would be evidence that he had Gray's consent to use the car even up to and at the time of the accident, that fact would still be irrelevant to the question of Gray's responsibility, since John's limited authority to use the car would have given him no right to turn it over to Stanley to use and his act in so doing would have imposed no liability upon Gray for Stanley's negligence. In addition to this, the undisputed testimony that John at most had a limited authority to use the car and that he exceeded that authority, and the absence of all evidence, direct or circumstantial, that he had a right to possession of the car at the time of the accident, establish the fact of nonconsent so firmly and satisfactorily as to completely overcome any presumption of consent derivable from the presumption of John's innocence. If the inference of permissive use is overcome by the weight of the undisputed evidence, it cannot be restored by resort to the disputable presumption of innocence. The presumption as well as the inference is overcome as a matter of law where it ceases to furnish a substantial conflict with the evidence opposed to it. A conclusion of fact, whether resulting from a process of inference or from a declared disputable presumption, can have probative force only so long as it is sustainable in reason. But as we have said, presumptive evidence that John had the right to the use of the car at the time of the accident is wholly irrelevant to the question of Gray's liability, which is nonexistent unless Stanley's negligence can be imputed to him, and we have shown that this cannot be done.

The judgment is reversed.

I concur except in the discussion of the presumption of innocence. As to that matter I express no opinion. Even if the presumption is applicable here, the evidence opposing it is so strong that the error in admitting evidence of the conversations with Daly must be regarded as prejudicial.

SHINN, Judge.

I concur: SCHAUER, P. J.