ALLSTATE INSURANCE COMPANY, a corporation, Plaintiff and Respondent, v. Fred CHINN, Timothy Chinn, and J. Serafin Garnica, Defendants and Appellants.
Respondent Allstate Insurance Company took a declaratory judgment determining that an automobile liability insurance policy it issued to appellant Fred Chinn does not cover liability arising out of an accident on March 9, 1964 involving Fred's minor son, Timothy Chinn. Fred appeals in his own behalf and as administrator of Timothy's estate (Timothy having died in a later, unrelated accident). The other appellant, Garnica, sustained injuries in the accident here in question. The policy issued by Allstate insured Fred Chinn against liability arising out of the ownership or use of a designated 1954 Chevrolet or a non-owned automobile; the policy also provided protection against the liability of immediate relatives arising from certain motor vehicle operations.
A few days before the accident Timothy acquired a 1949 Plymouth automobile from one Francis Puller. He did not comply with the requirements of Vehicle Code sections 5600 et seq., relating to the transfer of title. There was evidence that a week or two after the accident Timothy had a friend sell the car to an auto wrecker; as part of this transaction the certificate of ownership was made out to show a transfer directly from Puller to the wrecking firm. Timothy Chinn's name does not appear in the chain of title.
Fred Chinn had signed Timothy's application for an operator's license as provided by Vehicle Code section 17701; but he did not know of Timothy's purchase of the Plymouth until after the accident had occurred. It was Fred Chinn's policy not to allow Timothy to buy a car; Timothy was not allowed to use his parents' car unless ‘necessary.’ Fred did not learn of the accident until one week after it occurred.
The court below took judicial notice of the file in the personal injury action which appellant Garnica brought as a result of the accident. The complaint in that action charges both Fred and Timothy Chinn with negligence in the management, maintenance, driving and operation of the Plymouth automobile; in separate causes of action the complaint alleges that Fred Chinn is liable under Vehicle Code sections 17707 (signature of parent on minor's application for operator's license) and 17708 (permitting minor to operate motor vehicle) for his son's negligence.
The trial court found that Timothy Chinn was the owner of the Plymouth automobile, that it was furnished to him for his regular use, and that respondent's insurance policy therefore does not protect either Timothy or Fred Chinn against liability arising from the accident.
Liability of Fred Chinn
We note first that the protection afforded to Fred Chinn is not affected by the status of the Plymouth as owned or non-owned. The insurance policy provides:
‘Allstate will pay for an insured all damages which the insured shall be legally obligated to pay because of:
A. bodily injury sustained by any person, and
B. injury to or destruction of property, arising out of the ownership, maintenance or use, including loading and unloading, of the owned automobile or a non-owned automobile.
‘The following persons are insured under this Part
‘1. the named insured with respect to the owned or a non-owned automobile; * * *.
Fred Chinn is the named insured and any legal liability on his part arose out of the use of the Plymouth automobile (whether woned or non-owned). Therefore, the policy by its plain language covers any liability of Fred Chinn arising out of the accident in question.
Respondent contends that the only non-owned automobile coverage extended to Fred Chinn is that required by Vehicle Code section 16452.1 Thus it is claimed that because Fred's liability is derivative rather than direct it is not covered by respondent's insurance policy. In support of this view, respondent cites Wisdom v. Eagle Star Ins. Co. (1963) 211 Cal.App.2d 602, 27 Cal.Rptr. 599, and Osborne v. Security Ins. Co. (1957) 155 Cal.App.2d 201, 318 P.2d 94. But these cases do not support respondent's contention. Both cases indicate that Vehicle Code section 16452 (part of the Financial Responsibility Law) does not require coverage of an insured's liability arising out of the use of a non-owned car by another party (derivative liability imposed by Vehicle Code section 17707, 17708). But because neither policy provided the minimum non-owned automobile coverage which the statute does require, such coverage was held to be extended by operation of law. Thus the coverage of the policies in those cases was held to be the same as the minimum required by the statute.
In the present case, as the language quoted from the policy shows, greater coverage was provided than the statute requires. Respondent could have used the statutory language or, by an exclusion, could have limited the broad language of the policy. Having failed to do so, and having omitted the qualifying term ‘by him’ which appears in section 16452, respondent is bound by the language it adopted. Under that language, Fred Chinn's liability arising out of the March 9 accident is covered even though it is derivative. (Cf. Martinez v. Allstate Ins. Co. (1968) 261 A.C.A. 884, 68 Cal.Rptr. 278; Fazzino v. Insurance Co of North America (1957) 152 Cal.App.2d 304, 308, 313 P.2d 178.)
Liability of Timothy Chinn
The insurance policy contains the following language:
‘The following persons are insured under this Part
‘4. Any relative with respect to a nonowned private passenger automobile or trailer not regularly furnished for use of such relative; . . .
‘Definitions of words used under this Part
‘2. Automobiles Covered
(e) ‘non-owned automobile’ means an automobile, including a trailer, not owned by the named insured or any relative, other than a temporary substitute automobile; * * *'
Thus Timothy Chinn's liability for his negligent use of the Plymouth antomobile is covered by the policy only if the Plymouth was a ‘non-owned automobile’ and was not regularly furnished for his use. The trial court found against appellants on both of these issues.
Appellants contend that the definition of ‘owner’ contained in section 460 of the Vehicle Code should have been applied; the sale to Timothy was never registered as required by law, and he was not the owner of the Plymouth under that definition. Second, appellants assert that even if the definition in section 460 is not used, the policy is ambiguous in its reference to ownership and must be construed against the insurer.
Section 460 (which provides that an owner of a motor vehicle is a person having ‘all the incidents' of ownership) does not provide the exclusive definition of ‘ownership’ to be used in construing insurance policies. On the contrary, the statutory definition of ‘ownership’ is ‘not necessarily controlling’ because the words of an insurance policy are to be taken in their ‘ordinary and popular sense.’ (Matsuo Yoshida v. Liberty Mutual Insurance Co. (9th Cir. 1957) 240 F.2d 824, 827 [construing language then appearing in Veh. Code, § 66].) For the purpose of determining liability insurance coverage, there may be several ‘owners' of an automobile. (Matsuo Yoshida v. Liberty Mutual Insurance Co., supra; Uber v. Ohio Casualty Ins. Co. (1967) 247 Cal.App.2d 611, 615, 55 Cal.Rptr. 720; McClary v. Concord Avenue Motors (1962) 202 Cal.App.2d 564, 21 Cal.Rptr. 1.) The purchaser of an automobile need not comply with Vehicle Code requirements in order to become its owner under the terms of an insurance policy. (Uber v. Ohio Casualty Ins. Co., supra; Everly v. Creech (1956) 139 Cal.App.2d 651, 657, 294 P.2d 109.) Here Timothy acquired equitable ownership when he paid for the car and took unconditional possession under the intended sale.
Mission Ins. Co. v. Feldt (1964) 62 Cal.2d 97, 41 Cal.Rptr. 293, 396 P.2d 709, and Ohio Cas. Ins. Co. v. Armendariz (1964) 224 Cal.App.2d 56, 36 Cal.Rptr. 274, cited by appellants, are distinguishable. In each case the insured was issued a policy under California's assigned risk insurance plan which insured him only for the operation of non-owned vehicles. Upon receipt of the insurance policy, each insured was then issued an operator's license by the Department of Motor Vehicles valid only for the operation of vehicles not registered to the insured. The court in each case held that ‘not owned’ was the equivalent to ‘not registered to’ in this situation. This result was reached because the insurance policy and the operator's license were issued as part of the same statutory insurance plan and because of the public policy in favor of insurance coverage for drivers under the assigned risk plan. Similar special circumstances are not seen in the present case; we therefore apply the usual rule that the purchaser of an automobile may be the owner for insurance purposes even though he is not the registered owner.
Appellants' contention that ambiguities in an insurance policy should be construed against the insurer is correct.
‘If semantically permissible, the [insurance] contract will be given such construction as will fairly achieve its object of securing indemnity to the insured for the losses to which the insurance relates.’ (Continental Cas. Co. v. Phoenix Construction Co. (1956) 46 Cal.2d 423, 437, 296 P.2d 801, 809, 57 A.L.R.2d 914; also see Arenson v. Nat. Auto. & Cas. Ins. Co. (1955) 45 Cal.2d 81, 286 P.2d 816; Juzefski v. Western Cas. & Surety Co. (1959) 173 Cal.App.2d 118, 121, 342 P.2d 928.) Although this rule of construction has ‘particular application’ where exclusions from the policy are involved, there must still be some ambiguity in the policy language before construction against the insurer is called for. (Matsuo Yoshida v. Liberty Mutual Insurance Co., supra, 240 F.2d 824, 826.) It has been held a number of times that the transferee in possession of a motor vehicle is the owner thereof—although possibly not the only owner—under the terms of a liability insurance contract. (E. g., Everly v. Creech, supra, 139 Cal.App.2d 651, 294 P.2d 109; Uber v. Ohio Casualty Ins. Co., supra, 247 Cal.App.2d 611, 55 Cal.Rptr. 720.) Thus the concept of ownership in an insurance policy is not ambiguous; therefore the question whether a party is the owner of a motor vehicle is a question of fact to be determined by the trial court. (McClary v. Concord Avenue Motors, supra, 202 Cal.App.2d 564, 21 Cal.Rptr. 1.) The finding that Timothy Chinn was the owner of the Plymouth automobile was grounded upon substantial evidence that he paid for the car, took possession of it, and considered it to be his. That finding will not be overturned by us; because it conclusively establishes that the policy does not protect against the liability of Timothy, we need not consider the further contention, advanced by appellants, that the court erred in finding that the Plymouth was furnished for Timothy's regular use.
The judgment is reversed with directions to make findings and enter judgment consistent with the views we have expressed. Appellants will recover costs.
1. ‘§ 16452. An operator's policy of liability insurance shall insure the person named as insured therein against loss from the liability imposed on him by law for damages arising out of use by him of any motor vehicle not owned by him, within the same territorial limits and subject to the same limits of liability as are set forth above with respect to an owner's policy of liability insurance.’ (Language in effect upon issuance of the insurance policy [emphasis added].)
CHRISTIAN, Associate Justice.
DEVINE, P. J., and RATTIGAN, J., concur.