Brewer v. De Cant, 35277

• Decision Date: 02 April 1958
• Docket Number: No. 35277,35277
• Citation: 149 N.E.2d 166,167 Ohio St. 411
• Parties: , 5 O.O.2d 60 BREWER, Appellant, v. DE CANT; Universal Underwriters Ins. Co., Appellee.
• Court: Ohio Supreme Court

Page 411

167 Ohio St. 411

149 N.E.2d 166, 5 O.O.2d 60

BREWER, Appellant, v. DE CANT; Universal Underwriters Ins. Co., Appellee.

No. 35277.

Supreme Court of Ohio.

April 2, 1958.

Syllabus by the Court

1. A provision in a standard garage liability insurance policy, issued to an automobile dealer, defining as one of the hazards covered the 'use of any automobile in connection with the * * * operations' of an automobile dealer extends to an automobile repossessed by finance company and placed in the custody of such dealer for resale, even though the certificate of title thereto remains in the name of the person from whom the automobile was repossessed.

2. Under the Ohio Certificate of Title Act, a change in ownership of an automobile is not consummated until a certificate of title is issued in the name of the purchaser.

3. Where a purchaser contracts to buy an automobile and takes possession thereof from an automobile dealer and uses the automobile, such use is a use with the permission of the dealer until such time as a certificate of title thereto is issued to the purchaser.

Universal Underwriters Insurance Company, a defendant and the appellee herein, hereinafter referred to as Universal, issued to Gingrich Brothers, Inc., a standard garage liability insurance policy, the pertinent provisions of which read as follows:

'1. Coverage A--Bodily Injury Liability

'To pay on behalf of the insured all claims which the insured shall become legally obligated to pay as damages because of bodily injury * * * caused by accident and arising out of the hazards hereinafter defined.

'Definition of Hazards

'Division 1--Premises--Operations--Automobiles

'The ownership, maintenance or use of the premises for the purpose of an automobile dealer * * * and all operations necessary or incidental thereto; and the ownership, maintenance or use of any automobile in connection with the above defined operations * * *

* * *

* * *

'III. Definition of Insured

'With respect to the insurance under coverages A * * * the unqualified word 'insured' includes the named insured and also includes * * * (2) any person while using an automobile covered by this policy * * * provided the actual use of the automobile is by the named insured or with his permission.

'This policy does not apply:

* * *

* * *

'(b) to any * * * additional insured with respect to any automobile owned by him * * *.'

Gingrich is regularly engaged in the business of selling automobiles. It sold a certain 1946 Plymouth to one Armitage who executed a chattel mortgage thereon in favor of Commercial Credit Corporation. When Armitage was unable to continue making payments thereon, Commercial repossessed the car and placed it on Gingrich's used-car lot for resale. Commercial did not obtain a 'repossession title,' and, at all times hereinafter mentioned, the certificate of title to the Plymouth automobile remained in the name of Armitage.

Gingrich entered into negotiations for the purchase of an automobile by one DeCant, as a result of which DeCant contracted to buy the Plymouth and traded a Nash automobile in on it. DeCant signed a power of attorney authorizing Gingrich to sign the application for title, arranged for the transfer of the chattel mortgage, and took possession of the automobile.

Twenty-four days later, the Plymouth automobile, while being driven by DeCant, was involved in an accident as a result of which plaintiff was injured. Plaintiff brought suit for such injuries against DeCant in the Common Pleas Court, and a default judgment was entered in his favor.

Plaintiff then filed a supplemental petition against Universal, upon which summons was duly issued and the cause was submitted to the court. The court held that 'under the law and facts no sale of the Plymouth automobile was completed between Gingrich Brothers Motor Sales and Ivan DeCant; that DeCant was using the automobile with the permission of Gingrich Brothers and that the Plymouth was within the coverage of the policy issued by the defendant, Universal Underwriters Insurance Company,' and entered judgment in favor of the plaintiff against Universal.

On appeal to the Court of Appeals, the judgment of the Common Pleas Court was reversed, with one judge dissenting.

The cause is before this court upon the allowance of plaintiff's motion to certify the record.

Fries & Halleck, Bowling Green, for appellant.

Moan & Andrews, Toledo, for appellee.

BELL, Judge.

Since the obligation assumed by Universal under the policy here is dependent upon a determination of whether the accident resulting in this litigation arose 'out of the hazards * * * defined,' our first consideration must be the 'Definition of Hazards' as set out in the policy.

In our opinion, the wording of 'division 1' in that definition clearly indicates that it was intended to cover more than accidents occurring 'on the premises' owned, maintained or used by the insured. The operations 'necessary or incidental' to 'the purpose of an automobile dealer' obviously contemplate many activities necessarily not capable of being performed 'on the premises.' The demonstration of automobiles, the driving of them by prospective purchasers, the operation of a service truck and many other operations and activities of an automobile dealer are items necessary or incidental to his business and...