Maryland Cas. Co. v. Powers, Civ. No. 380.

• Decision Date: 23 April 1953
• Docket Number: Civ. No. 380.
• Citation: 113 F. Supp. 126
• Parties: MARYLAND CAS. CO. v. POWERS et al.
• Court: U.S. District Court — Western District of Virginia

113 F. Supp. 126

MARYLAND CAS. CO. v. POWERS et al.

Civ. No. 380.

United States District Court, W. D. Virginia, Abingdon Division.

April 23, 1953.

William A. Stuart and G. R. C. Stuart, Abingdon, Va., for plaintiff.

G. Mark French, Clintwood, Va., and Jones, Woodward & Miles, Bristol, Va., for defendants.

BARKSDALE, District Judge.

This case having been tried by the court without a jury on April 10, 1953, the court doth find the facts specially and states separately its conclusions of law thereon, as follows:

Findings of Fact.

Plaintiff, Maryland Casualty Company, issued its public liability insurance policy, effective August 26, 1951, and for one year thereafter, covering a 1950 Chevrolet Sedan, to defendant, Scottie Powers. The policy contains the usual omnibus clause, and also the following specific provisions:

"Item 7.(a) Except with respect to bailment lease, conditional sale, mortgage or other encumbrance, the named insured is the sole owner of the automobile: * * *" (Italics mine),

and Condition No. 24:

"Declarations By Acceptance of this Policy. The named insured agrees that the statements in the declarations are his agreements and representations, that this policy is issued in reliance upon the truth of such representations and that this policy embodies all agreements existing between himself and the company or any of its agents relating to this insurance."

On November 18, 1951, said Chevrolet automobile, while being operated along a public highway in Hawkins County, Tennessee, by Avery Powers, son of defendant Scottie Powers, was involved in a collision with a vehicle owned and operated by defendant, the Mason & Dixon Lines, Inc., and a third vehicle operated by defendant, Donald Dalton, which resulted in the death of Avery Powers and personal injury to others. Actions at law have been instituted in the courts of the State of Tennessee by certain other defendants against defendant Scottie Powers, in his own right and as Administrator of his son, Avery Powers, and defendant, the Mason & Dixon Lines, Inc., and are now pending.

Plaintiff, Maryland Casualty Company, contends that claims asserted against defendant, Scottie Powers, individually and as Administrator of the Estate of his son, Avery Powers, arising out of the collision, are not covered by its policy of insurance, on the ground that at the time of the accident the defendant Scottie Powers was not the "sole owner" of the said Chevrolet automobile and the said Avery Powers was not operating it by the permission of Scottie Powers, the named insured, because at that time he, Avery Powers, was the owner of the automobile. Defendants contend that coverage did exist. Pending the determination of this action, the plaintiffs in the pending actions in the Tennessee State courts have been enjoined from proceeding further in these actions and plaintiff prays for a judgment declaring that there was no coverage under its policy at the time of the accident.

Scottie Powers purchased the 1950 Chevrolet automobile described in plaintiff's insurance policy in September 1950, and a certificate of title to it was issued in his name. In late November or early December, 1950, Avery Powers, who was attending Hiwassie College in Tennessee, spent a week end at the home of his father near Coeburn, Virginia. Previously, his father had given Avery an old 1935 Ford automobile, which had gotten in such bad condition that it could not pass the inspection required by Virginia law. Consequently, Scottie Powers had directed Avery to junk the Ford and he would give him a new car. During this week end visit, Scottie Powers said to his son Avery, "I am going to give you this car (meaning the 1950 Chevrolet here in question) and you take care of it." Avery then took the 1950 Chevrolet back to college with him. At the same time, in order not to show favoritism, Scottie Powers gave his only other child, an older son, $1,300 in order to even up to him for his gift of the car to Avery. Scottie Powers did not transfer the certificate of title to Avery for the reason that he did not think Avery could dispose of the car if it were titled in his name, because he was not yet twenty-one years of age. Scottie Powers, for his own use, promptly bought a 1951 Chevrolet, and neither he nor any member of his family ever again used the 1950 Chevrolet here in question, and from the time said Chevrolet was delivered to him, Avery Powers used it exclusively. The only time thereafter Scottie Powers ever drove the 1950 Chevrolet was to drive it to the garage to have its brakes relined for Avery. While this work was being done on the 1950 Chevrolet, Avery drove the 1951 Chevrolet of his father. In August 1951, Avery Powers was married, but continued to attend college. Although Avery earned small sums of money in his spare time during all the period here pertinent Scottie Powers supported his son Avery, both before and after his marriage, which support included the necessary expense of operating his automobile. Scottie Powers bought and paid for the 1951 license plates for the automobile. Scottie Powers never transferred the certificate of title to said Chevrolet to his son Avery.

During the taking of the testimony, plaintiff, Maryland Casualty Company, introduced the signed statement of Scottie Powers, setting out the details of his giving said automobile to his son Avery, dated June 26, 1952. This statement had been given to, and was introduced in evidence by, Ben C. Davis, Esquire, Attorney at Law, of Kingsport, Tennessee. Defendants moved to strike out said statement upon the ground that it was a privileged communication between attorney and client. However, it appears by his letter to Scottie Powers of June 4, 1952, that Mr. Davis advised Scottie Powers that he represented plaintiff, Maryland Casualty Company, and the evidence further disclosed that, at the time of the giving of the statement, Scottie Powers was accompanied by his personal counsel, Mr. Kennedy.

Conclusions of Law.

Upon the facts set out above, my conclusions of law are as follows: First, as to defendants' motion to strike out the statement of Scottie Powers of June 26, 1952, my conclusion is to overrule the motion because it appears that defendant Scottie Powers, at the time of giving the statement to Mr. Davis, knew that Mr. Davis was not his attorney, but was the attorney for the plaintiff, Maryland Casualty Company. However, this ruling is not important, for practically the same facts appear from other evidence.

It is my conclusion that, at the time of the accident of November 18, 1951, there was no coverage under the insurance policy here under consideration. The basis of this conclusion is the determination that, after Scottie Powers gave the 1950 Chevrolet automobile to his son Avery in late November or early December of 1950, he was no longer the "sole owner of the automobile", as he declared himself to be in Item 7(a) of the insurance policy; that this declaration was material to the risk, and being untrue, rendered the policy void, or at least voidable, at the option of the company.

It is quite true that, before the legal title to an automobile can be transferred in Virginia, the owner is required by section 46-84, Code of Virginia 1950, to endorse an assignment and warranty of title upon the reverse side of the certificate of title and to deliver the certificate at the time of delivering the vehicle. Section 46-85 requires the purchaser to immediately forward the certificate so endorsed to the Division of Motor Vehicles. In construing substantially similar requirements of the original certificate of title act of 1926, the Supreme Court of Appeals of Virginia, in Thomas v. Mullins, 153 Va. 383, 149 S.E. 494, 495, held that, notwithstanding an agreement for the sale of an automobile and the payment of the purchase price, if no assignment of title had been executed and delivered by the seller to the purchaser and no notice of transfer had been given as required by the statute, ...