FREEDMAN v. QUEEN INSURANCE COMPANY OF AMERICA (1961)

The plaintiff sought to recover almost $8,000 from the defendant because of the loss of four diamonds, which loss, he claimed, was covered by an insurance policy issued by the defendant. When a judgment was entered that the plaintiff take nothing, he moved, under section 663, Code of Civil Procedure, to set the judgment aside and have a different and favorable one entered upon the facts as they had been found to be. Disappointed, when his motion was denied, the plaintiff appealed from the judgment and from the order that left the judgment as it was. We have concluded that the judgment was the correct one to enter on the facts found and that the motion to supplement it with another was properly denied.

This is the provision of the policy issued by the defendant that is the center of our interest:

“Insuring Conditions

“This policy insures against all risks of loss of or damage to the above described property arising from any cause whatsoever except:

“(a) Loss, damage or expense caused by or resulting from sabotage, theft, conversion or other act or omission of a dishonest character (1) on the part of the Assured or his or their employees or (2) on the part of any person to whom the property hereby insured may be delivered or entrusted by whomsoever for any purpose whatsoever, unless such loss arises while the goods are deposited for safe custody by the Assured, officer of the corporation, member of the firm or salesman while traveling, or while the goods are in the custody of (a) the Post Office Department as first class registered mail, or (b) a carrier mentioned in Section 2, or (c) a person serving as a mere porter or helper not on the payroll of the Assured.”

The facts that are to be measured against the provision quoted we take, unless otherwise indicated, from the Findings. The plaintiff was in the business of selling diamonds and jewelry set in diamonds to retailers. He received a telephone call from someone representing himself to be Bill Bates, an employee of a retail jeweler, advising the plaintiff that there was in his store a customer who desired a three carat diamond and that he, Bill Bates, wished that the plaintiff would let him have several diamonds on memorandum. The plaintiff was well-acquainted with Bill Bates, thought that he recognized his voice over the telephone and when, within a few minutes, a person came representing himself to be Irving Davis, sent by Bill Bates, the plaintiff took him to be the relative by that name that ‘Bill Bates' had told him would be over to pick up the diamonds. So it was that he handed to Irving Davis four diamonds worth in the neighborhood of $8,000.

According to the undisputed testimony of Bill Bates, he was playing golf at the time of this telephone conversation and it was not he who telephoned the plaintiff. We are interpreting in plaintiff's favor the finding that the plaintiff ‘learned’ later in the day, that neither Bill Bates nor any other employee of the retail jeweler had telephoned the plaintiff and that the retail jeweler never received the diamonds that the plaintiff had placed in the hands of ‘Irving Davis'. That is, we are proceeding on the theory that when the plaintiff alleged, in his complaint, and the trial court found that plaintiff had ‘learned’ these things, it was meant that he had discovered them to be true and so it was true that plaintiff placed his four diamonds in the hands of the Irving Davis who came to him, with the expectation that they would be taken to the retail jeweler for whom the real Bill Bates worked, but the jeweler never received them; they disappeared with ‘Irving Davis'.

It is true, then, that the plaintiff suffered a loss. Was the loss one covered by the policy? We are agreed that, in reading the policy, we should interpret any ambiguous or otherwise uncertain provision in favor of the plaintiff, the insured, as held in Russ-Field Corp. v. Underwriters at Lloyd's, 1958, 164 Cal.App.2d 83, 92, 330 P.2d 432, 437, and cases cited. This thoroughly established rule does not, however, justify us in finding uncertainty where the meaning of the policy is clear. We read in Fiske v. Niagara Fire Ins. Co., 207 Cal. 355, 359, 278 P. 861, 862–863: ‘Placing ourselves in the position of the parties to the contract, we are satisfied that it was not the intention of the parties to insure against the risk or peril which is made the basis of this action. It is true that a contract of insurance must be construed most favorably to the assured. But this does not mean that a court must indulge in a strained and forced construction to harmonize incongruous elements, to the end that an obligation may be created against the insurer, when it is reasonably probable that the contracting parties did not contemplate such a result.’

We find no uncertainty in the policy issued by the defendant at the point under consideration. We accept the definition of ‘entrust’ as quoted by the plaintiff from Webster's New Collegiate Dictionary, page 275: “To confer a trust upon; esp. to deliver to (another) something in trust, or to surrender (something) to another with confidence regarding his care, use, or disposal of it; as, to entrust a servant with one's goods, or to entrust one's goods to a servant.” We cannot, however, agree with the interpretation that the plaintiff gives to this definition, and it is at this point that we think plaintiff's whole case breaks down. He says: ‘It seems clear that the jewelry was not ‘entrusted’ to the thief. The thief obtained it by a means no different from that where a person ‘hands over,’ or ‘delivers,’ or ‘entrusts' jewelry to the holdup man.’ But it cannot be said that one who, put in fear by a holdup man, surrenders his pocketbook to him, does so within the meaning of ‘entrust’ quoted above. No doubt the Irving Davis was a thief when he took and disappeared with plaintiff's diamonds. Had he obtained them by force or a threat of force they would not have been ‘entrusted’ to him. As it was, he was trusted by the plaintiff, and the diamonds were placed in his hands in the belief that he would deliver them to the jeweler by whom Bill Bates was employed. Plaintiff trusted him, and so entrusted the diamonds to him. Neither to insurance policy nor the definition of ‘entrust’ contain the adverb ‘justifiably’ in modification of ‘entrust’ and it should not be read into the policy.

We find none of the cases cited—and we have weighed them—that casts a helpful light on our problem, and we see no useful purpose to be served by a discussion of more than the one which plaintiff cites in support of his statement: ‘Regardless what courts in other jurisdictions may hold, under California decisions, the defendant is liable. This was so held in Granger v. New Jersey Insurance Co., 108 Cal.App. 290 [291 P. 698] (Sept. 1930).’ The policy involved in that case insured ‘* * * against theft, robbery or pilferage except by any person in the assured's household or in their service or employment and excepting also the wrongful conversion, embezzlement or secretion by a mortgagor or vendee in possession under mortgage, conditional sale or lease agreement.’ A prospective purchaser, who gave a fictitious address and, possibly, a fictitious name, was permitted to drive a car covered by the policy around the block—and neither he nor the car was seen again. This case is helpful only at a point where we need no help. It held that theft had been committed, and no one doubts that theft has been committed in the case under review. The exception there was embezzlement of a narrow nature. Theft where property had been entrusted to the thief is not involved at all, and that is our problem.

Plaintiff appealed both from the judgment and from the order denying his motion to substitute a more acceptable judgment in its place. Section 663a, Code of Civil Procedure, declares that an order granting such a motion may be appealed, and as every fact that supports the motion may be reviewed on an appeal from the judgment itself, if the motion is denied, one would expect to find the order denying the motion not appealable. It is, however, held otherwise (Rounds v. Dippolito, 1949, 94 Cal.App.2d 412, 413, 210 P.2d 893) and as a result we are not dismissing the appeal from the order, but are affirming both the judgment and the order.

BISHOP, Justice pro tem.

VALLEÉ, Acting P. J., concurs. FORD, J., concurs in the judgment.