Canal Ins. Co. v. P & J Truck Lines, Inc.
| Decision Date | 17 March 1978 |
| Docket Number | No. 55534,No. 3,55534,3 |
| Citation | 145 Ga.App. 545,244 S.E.2d 81 |
| Court | Georgia Court of Appeals |
| Parties | CANAL INSURANCE COMPANY v. P & J TRUCK LINES, INC., et al |
Jones, Cork, Miller & Benton, E. Bruce Benton, Macon, for appellant.
Brown, Katz, Flatau & Hasty, S. Phillip Brown, Macon, for appellees.
This is an action on a policy of insurance on a 1972 International Harvester tractor and attached Fruehauf semi-trailer van which burned while en route to its destination loaded with some 250,000 eggs. The policy shows the named insured to be "P & J Truck Line, Inc." which was a corporation formed by Paul Thompson and Andrew Williams, Thompson being the sole stockholder at the time this complaint was filed. At the time of the loss the tractor carried a State of Georgia title registration in the name of Williams dated January 16, 1974, and showing a purchase date of November 5, 1973. The application for insurance is dated January 17, 1974, and the loss occurred on April 28, 1974. The insurer denied liability. Thompson and the corporation jointly filed a complaint; the issues were heard by the court without a jury and judgment entered in favor of the plaintiffs as their interests may appear. The defendant appeals.
1. The first four enumerations of error attack the form of the judgment. Quoting 5A Moore's Federal Practice, § 52-06(1), Doyal Development Co. v. Blair, 133 Ga.App. 613(1), 211 S.E.2d 642 (1974) held that where the detailed findings of fact (and also conclusions of law) are quite sufficient for review the case will not be remanded to cure merely formal defects. It is clear from the judgment here what issues have been disposed of, and in what manner.
2. Did P & J Truck Lines, Inc. have an insurable interest in the tractor and trailer in view of the fact that the Georgia certificate of title was made out in the name of Williams, who had failed to have it transferred prior to the wreck? The uncontradicted testimony is to the effect that Williams represented to Thompson that he owned the unit and could buy or lease others, and that he could generate sufficient business, driving one of the rigs and obtaining drivers for the others, to make a substantial profit, but that he did not have a sufficient capital outlay to start a new business. Thompson agreed to supply working capital, had the P & J Truck Lines, Inc. formed for the purposes of the business, and borrowed $12,000 from the C & S Bank which was paid over to Williams to represent Thompson's half interest in the business, Williams then placed the rig at the service of the corporation which commenced using it for hauling contracts. Williams and Thompson both signed the lien pledging the outfit as collateral for the bank loan. They operated under an oral agreement that the owner of the rig was the corporation, which had been formed for that purpose; however, being informed by telephone that the new corporation was legally existent they took out the insurance policy in its name prior to actually transferring the title certificate, and this element of the agreement had not been taken care of at the time of the wreck.
" 'Insurable interest' . . . means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment." Code § 56-2405. Upon a transfer of ownership it is required that the transferor deliver a sworn assignment and warranty of title to the transferee on the certificate of title and until this is done, except as between the parties, the transferee obtains no interest in the vehicle. Code § 68-415a. Title passes, however, when the transferor completes his performance with reference to physical delivery of the goods. Code § 109A-2-401(2). Cf. Rockwin Corp. v. Kincaid, 124 Ga.App. 570, 184 S.E.2d 509 (1971); Marshall v. Universal CIT Credit Corp., 121 Ga.App. 751, 175 S.E.2d 84 (1970). "The Motor Vehicle Certificate of Title Act provides an additional method whereby title to motor vehicles can be proven but did not change the existing law as to the manner in which ownership of chattels including automobiles can be proven." Hightower v. Berlin, 129 Ga.App. 246(3), 199 S.E.2d 335 (1973). P & J Truck Lines, Inc. had an insurable interest in the tractor and trailer.
3. It is contended that the trial court erred in not declaring the policy void due to misrepresentation, since it appeared on the trial of this case that on the application for insurance only the loan of the C & S Bank, taken out by Thompson and on which the rig was collateral, was listed as a lien, whereas prior to purchase by Williams there were liens owing to both International Harvester and Fruehauf. Thompson testified positively that he knew nothing of these liens; that he did know of one check written by Williams to Fruehauf which Williams told him was the last payment due that entity. He further testified to his conviction that Williams was acting in good faith and knew of no other amounts which would constitute liens against the tractor or trailer. In the absence of contrary evidence, this testimony was sufficient, if believed by the trial judge, to warrant a finding that any misrepresentation as to the existence of prior liens in the application was innocent. Under Code § 56-2409, relating to misrepresentations in applications for insurance (whether attached to the policy or not) "shall not prevent a recovery under the policy or contract unless" fraudulent, material to the acceptance of the risk, or such that the insurer would not have provided coverage at the stated premium rate if it had known the true facts. This section has been the subject of much construction, but it is now clearly established that even if the second or third exception is proved, the trior of fact should not hold the policy void if it appears that the applicant was in good faith in completing the application. In United Family Life Ins. Co. v....
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