United States Fidelity & Guar. Corp. v. Myers Motors

• Citation: 143 F. Supp. 96
• Decision Date: 26 September 1956
• Docket Number: Civ. No. 796(R).
• Parties: UNITED STATES FIDELITY AND GUARANTY CORPORATION, a Maryland corporation, Plaintiff, v. MYERS MOTORS, Incorporated, trading as Myers General Tire Service, Riverhill, Martinsville, Virginia, Jesse Thomas Harris, Eliza Hundley, William H. Hundley, Della Marie Perkins, Defendants.
• Court: U.S. District Court — Western District of Virginia

143 F. Supp. 96

UNITED STATES FIDELITY AND GUARANTY CORPORATION, a Maryland corporation, Plaintiff, v. MYERS MOTORS, Incorporated, trading as Myers General Tire Service, Riverhill, Martinsville, Virginia, Jesse Thomas Harris, Eliza Hundley, William H. Hundley, Della Marie Perkins, Defendants.

Civ. No. 796(R).

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

September 26, 1956.

Eggleston & Holton, Roanoke, Va., for plaintiff.

R. Paul Sanford, Danville, Va., R. Reid Young, Jr., Martinsville, Va., H. L. Fagge, Leaksville, N. C., and Broaddus, Epperly & Broaddus, Martinsville, Va., for defendants.

BARKSDALE, District Judge.

This action having been tried upon the facts by the court without a jury, the court doth hereby find the facts specially and states separately its conclusions of law thereon and directs the entry of the appropriate judgment, as follows:

Findings of Fact.

On July 3, 1955, the plaintiff, United States Fidelity and Guaranty Corporation of Maryland, issued to Myers Motors, Inc., of Martinsville, Virginia, an automobile and tire dealer, its public liability garage policy of insurance, which was in full force and effect at all times pertinent to this controversy. One of the provisions of this policy was that the company "* * * agrees * * * to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury * * * arising out of * * * the ownership, maintenance or use of any automobile in connection with" the operation of Myers Motors, Inc., as an automobile dealer. (Italics mine.) There was also the standard provision extending coverage to persons using insured's automobiles with its permission.

On or about August 22, 1955, defendant, Jesse Thomas Harris, came to the place of business of Myers Motors, Inc., and negotiated with Thomas H. Myers, President of Myers Motors, Inc., for the purchase or trade for a 1952 Mercury automobile, which Myers Motors, Inc., had for sale. As to these negotiations, the evidence is somewhat conflicting, but I find as facts that Harris agreed to purchase the 1952 Mercury for the sum of $1,237, of which sum Harris agreed to and did then and there deliver to Myers his 1949 Mercury automobile as a down-payment in the agreed sum of $495, and Harris ageed to pay the balance of $742, in equal monthly instalments. Myers already had the certificate of title for the 1949 Mercury, or it was endorsed and delivered to him by Harris at that time, and about ten days later Myers sold the 1949 Mercury to an employee of Harris. At the conclusion of the negotiations, the 1952 Mercury was delivered by Myers to Harris, who took possession of it, drove it home, and continued to use it until it was involved in a wreck on August 27, 1955. The only detail of the transaction left unsettled was the matter of financing the deferred payments of the purchase price by Harris. Myers desired that the transaction be financed by a finance company, but he did not think that the companies with which he did business would finance the transaction. It was agreed that Harris would undertake to have the transaction financed, but this was not accomplished. In the event that Harris could not make arrangements with a finance company for financing the transaction, it was Myers' purpose to accept the note of Harris for the deferred payments and undertake to collect them himself. Before leaving with the 1952 Mercury, Harris signed in blank a contract and note. The contract was in the form of a lease, but actually it was a conditional sales agreement. Later in the week, and before the wreck on September 27, 1955, Myers had his bookkeeper fill out the contract and note providing for the payment of the balance of the purchase price of the 1952 Mercury in equal monthly instalments.

Although Myers had in his possession the certificate of title of the 1952 Mercury, which had been endorsed to Myers Motors, Inc., by the person from whom it had been acquired, the certificate of title was not delivered to Harris, nor was it assigned to him, as required by Virginia law, at that time or any time thereafter.

On September 27, 1955, while operating the 1952 Mercury in Henry County, Virginia, defendant, Harris, was involved in a collision with another automobile in which the defendants, Eliza Hundley, William H. Hundley and Della Marie Perkins sustained personal injuries. These three defendants have instituted separate damage suits against defendant Harris for personal injuries sustained by them in this collision in the Circuit Court of Henry County, Virginia, which suits are now pending.

Since the collision, the 1952 Mercury has not been repaired, but Harris has treated it as his property and has paid in instalments to Myers approximately $270 on account of the balance of the purchase price of this automobile.

Upon being advised that he should report the accident to his insurance company, Myers, on November 10, 1955, notified the agent of the plaintiff, from whom he had procured the policy, of the accident, and procured from this agency a form of "Notice of Policy under the Virginia Motor Vehicle Safety Responsibility Act Code 1950, § 46-386 et seq.", which was filled out by Myers and plaintiff's agent, and forwarded to the Division of Motor Vehicles of Virginia. This notice gives the date and place of the accident, the model, make and motor number of the 1952 Mercury, and recites that it was operated by Jesse Thomas Harris, and owned by Myers General Tire Service (a trade name of Myers Motors, Inc.), that the policy contained standard provisions, was in effect on the date of the accident, and that it applied to the above owner and the above operator.

The necessary diversity of citizenship and jurisdictional amount are present.

Conclusions of Law.

Plaintiff, United States Fidelity and Guaranty Company, has instituted this declaratory judgment action, seeking adjudication that its policy of insurance does not cover the claims asserted against defendant, Jesse Thomas Harris, by defendants, Eliza Hundley, ...