STEWART v. NORSIGIAN ET AL

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District Court of Appeal, Fourth District, California.

STEWART v. NORSIGIAN ET AL.

Civ. 3126.

Decided: May 25, 1944

Rae B. Carter and Edmond A. Chevalier, both of Fresno, for plaintiff and appellant. Crider, Runkle & Tilson, of Los Angeles, for defendant and appellant. Chester O. Hansen, of Fresno, for defendant and respondent.

This is an action by the administratrix of the estate of James E. Stewart, deceased, to recover damages resulting from his being killed in a collision between a motor cycle which he was riding and an automobile being driven by John Norsigian. The collision occurred in the early morning of either January 21 or January 22, 1942.

Plaintiff recovered judgment against Norsigian and Pacific Finance Corporation for $25,000 and judgment went in favor of B. J. LaFontaine for his costs. Pacific Finance Corporation has appealed from the judgment against it, and, as a matter of precaution, plaintiff has appealed from the portion of the judgment in favor of LaFontaine. Norsigian has not appealed. Both appeals are presented on the same transcripts so we will dispose of both of them in this opinion.

Pacific Finance Corporation urges that it was not the owner of the car driven by Norsigian and that he was not its agent, servant nor employee and was not driving the car on its business so no recovery could be had against it. As an alternative it argues that if it be held to be the owner of the car in question, and if Norsigian be held to have been driving it with the Corporation's implied consent, its liability is limited to $5000 by section 402 of the Vehicle Code, St.1937, p. 2353.

Plaintiff argues that Pacific Finance Corporation was the owner of the car and that its liability arises under the doctrine of respondeat superior; that if this doctrine does not apply, then it must be held that Pacific Finance Corporation was the owner of the car which Norsigian was driving, with its implied consent, so that its liability is fixed by section 402 of the Vehicle Code.

Plaintiff assumes the same position in her appeal from the judgment in favor of LaFontaine, but states that if it be held that the Pacific Finance Corporation was not the owner of the car, and, that it is not liable under the doctrine of respondeat superior, then it must be held that LaFontaine was its owner and that his liability should be determined at a second trial.

LaFontaine was a dealer in new and used automobiles. He was doing business in the city of Selma in Fresno County under the name of Selma Auto Electric Company.

On August 30, 1941, LaFontaine sold the car in question, a Ford sedan, to Ray R. Blair on a conditional sales contract providing for monthly payments. LaFontaine assigned this contract and his interest in the car to Pacific Finance Corporation and guaranteed payment of the balance due. A registration certificate (pink slip) was issued showing Pacific Finance Corporation as the legal owner and Blair as the registered owner.

A very few days before the accident here in question, two or three according to the witnesses, Blair drove the car into the place of business of LaFontaine and told him that he was going into the Army or the Navy and he could not continue the payments on the contract and wanted to turn the car back. LaFontaine told him that he should notify the Pacific Finance Corporation at its office in Fresno that he had surrendered the car and had abandoned the contract. Blair replied that he would try to do so as the office did not close until five o'clock. There is no evidence that Pacific Finance Corporation received any notice of the surrender of the car other than the inference which might be drawn from an affidavit made by its representative to which we will later refer.

LaFontaine testified that when Blair surrendered the car, he, LaFontaine, became obligated to pay the unpaid balance on the contract; that he could either pay the balance out of his own funds or resell the car and pay the amount due out of the selling price. After the accident LaFontaine paid the balance due Pacific Finance Corporation and became the owner of the Ford. LaFontaine sold the Ford to a Mr. Woodward on March 31, 1942. There was no change in the record of ownership of the car between the time of the issuance of the pink slip when the sale was made to Blair and the time of the accident.

Norsigian was in the employ of LaFontaine as a mechanic. On the afternoon of January 20 or 21, 1942, he told LaFontaine that he wanted to buy a car and was interested in the purchase of this Ford; that before buying it he wanted to drive it. LaFontaine consented and Norsigian drove it home that evening. He then drove it to Fresno, returning towards Selma on Highway 99 early next morning. The collision which resulted in the death of Stewart occurred about two o'clock on that morning. There is no contention made that the accident was not proximately caused by the negligence of Norsigian.

We will first consider the liability of Pacific Finance Corporation under the doctrine of respondeat superior.

There is no evidence that Norsigian was ever employed by Pacific Finance Corporation or that any of its representatives had ever heard of him prior to the accident. The only evidence in the record on that subject is to the effect that Norsigian was employed by LaFontaine.

Plaintiff calls our attention to the well established rules that all conflicts in the evidence are settled in the trial court and that on appeal all reasonable inferences must be drawn in favor of the verdict and judgment. Juchert v. California Water Service Co., 16 Cal.2d 500, 106 P.2d 886; Whitechat v. Guyette, 19 Cal.2d 428, 122 P.2d 47; Mah See v. North American Acc. Ins. Co., 190 Cal. 421, 213 P. 42, 26 A.L.R. 123. She then argues that one inference may be based on another inference (West Coast Life Ins. Co. v. Crawford, 58 Cal.App.2d 771, 138 P.2d 384) and maintains that the various inferences that may be drawn from the evidence support the verdict and judgment.

While there is general language in West Coast Life Ins. Co. v. Crawford, supra, supporting the argument of plaintiff, a study of that case and others shows the rule to be that an inference may be based on another inference when the first inference is the only one which a reasonable mind could draw from the facts proven. It then becomes a proven fact and a subsequent inference may be drawn from it as an inference must be founded on a fact legally proved. Sec. 1960, Code Civ. Proc. This is recognized in the opinion in the West Coast Life Insurance Co. case.

Plaintiff argues that the doctrine of respondeat superior may be invoked here because of the inference of agency which she argues may be drawn where the car, owned by one person, is in the possession of another and is being driven by him. She cites cases in support of this argument such as Fearn v. Ralph Hamlin, Inc., 215 Cal. 211, 8 P.2d 1015; Ryan v. Farrell, 208 Cal. 200, 280 P. 945; Blank v. Coffin, 20 Cal.2d 457, 126 P.2d 868; and Souza v. Corti, 22 Cal.2d 454, 139 P.2d 645, 147 A.L.R. 861.

An examination of these cases and others discloses that such an inference has been drawn under two sets of circumstances: First. Where the operator of the car belonged to the family group of the owner, and second, where the driver was the employee of the owner. Certainly the family group cases cannot apply here. Norsigian was not employed by Pacific Finance Corporation. We have been cited to no case and have found none, permitting the drawing of such an inference, where the driver of the car was not an employee of the owner and was a total stranger to the owner, was not a member of the family group of the owner, and was not operating it under the direction of nor for the benefit of a member of his family.

A search of the record has disclosed no evidence justifying the inference that Norsigian was operating the car as the agent, servant or employee of Pacific Finance Corporation. All of the evidence, and it was all offered by plaintiff, is to the effect that Norsigian was a complete stranger to Pacific Finance Corporation and its representatives, that he was not employed by it and that they did not know he had possession of the car until after the accident.

In Blank v. Coffin, supra [20 Cal.2d 457, 126 P.2d 870], it was said:

“Whether a particular inference can be drawn from certain evidence is a question of law, but whether the inference shall be drawn, in any given case, is a question of fact for the jury. See cases cited in 10 Cal.Jur. 738–739, § 60.

“Usually, the opposing party introduces evidence as to the nonexistence of the fact in issue, and the jury must then determine the existence or nonexistence of the fact from all the evidence before it. If the evidence contrary to the existence of the fact is clear, positive, uncontradicted, and of such a nature that it can not rationally be disbelieved, the court must instruct the jury that the nonexistence of the fact has been established as a matter of law. (Citing cases.) The jury, however, is the sole judge of the credibility of the witnesses (Cal.Code Civ.Proc., § 1847; see cases cited in 27 Cal.Jur. 182, § 156) and is free to disbelieve them even though they are uncontradicted if there is any rational ground for doing so. (Citing cases.) In most cases, therefore, the jury is free to disbelieve the evidence as to the nonexistence of the fact and to find that it does exist on the basis of the inference.”

Plaintiff maintains that the jury was fully justified in disbelieving the evidence of Norsigian and LaFontaine that the former was an employee of the latter and that he was not an employee of the Pacific Finance Corporation. She bases this argument on the fact that Norsigian was contradicted by other witnesses as to some of the circumstances of the accident and, on the further fact that LaFontaine made an affidavit that the Ford had not been operated on the highways of California after December 1, 1941, which was contradicted by the proven facts of the case.

While this evidence might furnish sufficient reason for disbelieving the testimony of Norsigian and LaFontaine, that fact can not aid the cause of plaintiff. If the evidence of these witnesses as to the employment of Norsigian be rejected as untrue, there is an entire lack of any evidence on the question of his employment by any one. There is no claim that he belonged to the family group of Pacific Finance Corporation, nor to that of any of its representatives, so that question is eliminated from the case. If we eliminate his evidence, and that of LaFontaine, on the subject of employment, there is no evidence on that question and nothing to indicate employment by Pacific Finance Corporation. Under these circumstances there is an entire absence of proof of the fact of employment which must be established in order to support the inference of agency on which plaintiff bases her argument. It follows that we cannot support the judgment against Pacific Finance Corporation under the doctrine of respondeat superior. There is nothing in the record indicating that Norsigian was either its agent, servant or employee and no proven fact to support such an inference.

We must next consider the liability of Pacific Finance Corporation under the provisions of section 402 of the Vehicle Code which makes the owner of a motor vehicle liable up to $5000 for death or injury to one person resulting from the negligent operation of the vehicle by a person operating it with the express or implied consent of the owner.

Subdivision (f) of that section, in effect at the time of the accident, provided in part as follows:

“If a motor vehicle is sold under a contract of conditional sale whereby the title to such motor vehicle remains in the vendor, such vendor or his assignee shall not be deemed an owner within the provisions of this section, but the vendee, or his assignee shall be deemed the owner notwithstanding the terms of such contract, until the vendor or his assignee retake possession of such motor vehicle.” (Emphasis ours.)

In order to fix liability under section 402 of the Vehicle Code, two facts, in addition to negligence of the operator, must be established: First, that Pacific Finance Corporation was the owner of the Ford at the time of the accident and second, that Norsigian was driving it with the consent of Pacific Finance Corporation. In this connection it must be remembered that at that time Pacific Finance Corporation was shown as the legal owner, and Blair as the registered owner on the records of the Motor Vehicle Department as there had been no change in the registration of the car until after the accident. It must be borne in mind that the car was in the physical possession of LaFontaine on his sales lot in Selma; that he was the original vendor of the automobile with Pacific Finance Corporation as his assignee; that he had an understanding with Pacific Finance Corporation that it would finance new and used cars sold by him on conditional sales contracts and had guaranteed payment of the balance due under the Blair contract.

Under date of January 21, 1941, an agent of Pacific Finance Corporation executed an affidavit for it which contained the following:

“Pacific Finance Corporation of California being first duly sworn, deposes and says: That he is the owner within the meaning of the Vehicle Code of that certain Ford * * *; that as allowed under lease contract dated the 30th day of August 1941, he repossessed said Ford * * * on or about the 15th day of Jan. 1942, from R. R. Blair, whose post office address is/was 640 Franklin, Fresno, for the following reasons: non–fulfillment of contract. Signed Pacific Finance Corporation of California. Countersigned R. N. Roe, and now has the above described vehicle in his possession.”

This affidavit contains the only information in the record of the exact date of the surrender of the car which was regarded as a “repossession” by Pacific Finance Corporation which stated that on January 21, 1942, it had the car in its possession. As the car was then on the LaFontaine sales lot in Selma, where it had been since Blair surrendered it, the only conclusion to be reached is that the possession by LaFontaine was possession by Pacific Finance Corporation and for it.

When the car was repossessed by Pacific Finance Corporation, as stated in its affidavit, Blair's interest was forfeited under the terms of the contract and Pacific Finance Corporation became the owner of the car as the legal ownership and the registered ownership as shown on the pink slip became merged in it. This conclusion finds some support in subdivision (f) of section 402 of the Vehicle Code, already quoted, which in effect provides that the conditional sales vendor and his assignee shall not be considered the owner of the motor vehicle “until the vendor or his assignee retake possession of such motor vehicle.”

Under the circumstances disclosed here we conclude that Pacific Finance Corporation was the owner of the car as that term was used in section 402 of the Vehicle Code in 1942.

We have little difficulty in concluding that the evidence justified the jury in the implied finding that Norsigian was driving the Ford with the implied consent of Pacific Finance Corporation at the time of the accident. As we have observed, LaFontaine had possession of the car for Pacific Finance Corporation and was obligated under his guaranty to pay the balance due on the purchase price. He testified that he could make this payment out of his own funds or by a resale of the car. This stands uncontradicted in the record. He held possession for Pacific Finance Corporation, had the right to sell the car and had it on his sales lot. His right to sell the car would include the use of the usual and ordinary means of effecting a sale which includes a demonstration to a prospective purchaser. The accident happened during such demonstration. It should make little difference whether the driver, during the demonstration, was an employee of LaFontaine or of the owner, or was the prospective purchaser. As LaFontaine had possession of the car for Pacific Finance Corporation, the owner, and had the right to sell it, the consent of the owner to the demonstration must be implied through consent given by LaFontaine.

We therefore conclude that Pacific Finance Corporation is liable under section 402 of the Vehicle Code in the sum of $5000 damages caused by the negligence of Norsigian while operating the car with its implied consent.

We must next consider the appeal by plaintiff from the portion of the judgment in favor of LaFontaine.

Norsigian was bailee of the car while he was using it. Baugh v. Rogers, 24 Cal.2d 200, 148 P.2d 633. The liability of LaFontaine must arise, if at all, under the provisions of section 402 of the Vehicle Code. That section fastens liability only on the “owner of a motor vehicle”. As we have concluded that Pacific Finance Corporation, and not LaFontaine, was the owner of the Ford at the time of the accident the judgment in favor of LaFontaine was proper.

The portion of the judgment in favor of B. J. LaFontaine is affirmed.

The judgment against Pacific Finance Corporation is reduced to $5000 and as so reduced is affirmed. As between plaintiff and Pacific Finance Corporation neither party will recover costs of appeal.

MARKS, Justice.

BARNARD, P. J., and GRIFFIN, J., concur.