## Facts

- An insurer issued a paid, two-year automobile policy covering collision damage to the then-owner.
- The owner sold the car to John E. Sauber and delivered the policy to him at the time of sale.
- Immediately after the purchase, Sauber called the insurer’s office to ask whether he could drive the car under the existing policy as the new owner.
- Sauber testified that an unidentified woman answering at the insurer’s office told him it was “perfectly all right” to “go ahead” and drive with that insurance.
- After the ownership transfer, the car was damaged in a collision while the former owner was driving it.
- The policy contained a clause requiring the insurer’s written consent/endorsement for any assignment or transfer of the policy.
- In a joint action, the former owner’s claim was dismissed; the jury returned a verdict for Sauber on the collision loss.

## Issues

1. Whether testimony about a telephone conversation with an unidentified person answering at the insurer’s office was admissible to show the insurer’s consent or waiver, despite no independent proof of the speaker’s specific authority.
2. Whether the policy’s written-consent requirement for assignment could be waived by the insurer so as to permit recovery by the purchaser without a written endorsement.
3. Whether the evidence required judgment notwithstanding the verdict for the insurer or justified setting aside the verdict by granting a new trial.

## Decision

- The court held Sauber’s testimony about the telephone conversation was admissible; calling the insurer’s business number and speaking with a person answering at the office supported treating the speaker as an agent with apparent authority on the subject of coverage.
- The court held the written-consent/anti-assignment clause was for the insurer’s benefit and could be waived; the evidence permitted a finding that the insurer waived the written-endorsement requirement and consented to coverage for Sauber.
- The denial of the insurer’s motion for judgment notwithstanding the verdict was affirmed.
- The order granting a new trial was reversed, and the case was remanded with directions to reinstate the jury verdict for Sauber.

## Legal Principles

- When a caller reaches a business at its office number and speaks with a person answering on the business’s behalf, the conversation is admissible where the circumstances support a finding that the speaker acted with apparent authority concerning matters typically handled by that office.
- Insurance policy provisions requiring written consent or endorsement for assignment are conditions for the insurer’s protection and may be waived expressly or by conduct.
- An insurer’s assurances, made with knowledge that ownership has transferred, may support a jury finding of waiver of formal transfer requirements and continued coverage for the new owner.
- If the evidence reasonably supports the jury’s finding of waiver and coverage, judgment notwithstanding the verdict is improper, and a new trial should not be ordered absent a legally sufficient reason.

## Conclusion

The court enforced the jury’s determination that the insurer, through an employee’s apparent-authority phone assurances to the buyer who disclosed he was the new owner, waived the policy’s written-consent requirement for assignment and was liable for the collision loss, reinstating the verdict for the buyer and rejecting both JNOV and a new trial.


Sauber v. Northland Ins. Co., 87 N.W.2d 591 (Minn. 1958)