Coffin v. Northwestern Mut. Fire Ass'n

• Decision Date: 27 July 1926
• Citation: 249 P. 89,43 Idaho 1
• Parties: MARK COFFIN, Surviving Partner of the Copartnership of COFFIN & BEGLAN, Appellants, v. NORTHWESTERN MUTUAL FIRE ASSOCIATION, a Corporation, Respondent
• Court: Idaho Supreme Court

249 P. 89

43 Idaho 1

MARK COFFIN, Surviving Partner of the Copartnership of COFFIN & BEGLAN, Appellants, v. NORTHWESTERN MUTUAL FIRE ASSOCIATION, a Corporation, Respondent

Supreme Court of Idaho

July 27, 1926

CONDITIONAL SALES CONTRACT-TITLE OF BUYER - DIVORCE - PROPERTY RIGHT OF MARITAL COMMUNITY - INSURANCE-CHANGE OF OWNERSHIP AVOIDS POLICY.

1. Buyer, under conditional sales contract, acquires a property right in the article, and not a mere contract right.

2. Though buyer, a married man, under conditional sales contract, was in default, no forfeiture having been declared the community had a property right which decree of divorce could award to wife.

3. Decree of divorce awarding to wife an automobile would, as between the parties, include whatever interest the husband had in the machine under conditional sales contract.

4. Conditional sellers being mere appointees under loss payable clause of policy issued to conditional buyer, their right thereunder is measured by his, so that his interest in insured article being transferred to his wife, and his right thus extinguished, they as his assignees cannot recover on it.

5. Change of ownership of interest in automobile by award thereof to insured's wife in divorce decree avoids the policy.

APPEAL from the District Court of the Third Judicial District, for Ada County. Hon. M. I. Church, Judge.

Action on policy of insurance. Judgment for defendant. Affirmed.

Judgment affirmed. Costs awarded to respondent. Petition for rehearing denied.

John Jackson and Reddoch & Hunter, for Appellants.

Matthews the insured, having purchased the automobile from appellants under a title retaining note, until the full purchase price was paid, obtained a mere incipient right to acquire title upon the making of his payments, and all payments not having been made at the time of the rendition of the divorce decree, the community of Matthews and wife had "acquired" no title, and the court's decree awarding the automobile to Elma Matthews was a nullity. (31 C. J. 44, note 45; C. S., secs. 4650, 4656, 4659, 4660, 4666; Richard v. Moore, 110 La. 435, 34 So. 593; McAlister v. Hutchison, 12 N.M. 111, 75 P. 41; Sauvage v. Wauhop (Tex. Civ. App.), 143 S.W. 259; Creamer v. Briscoe (Tex. Civ. App.), 107 S.W. 635; Bishop v. Lusk, 8 Tex. Civ. App. 30, 27 S.W. 306; Webb v. Webb, 15 Tex. 274; White v. Waite, 47 Vt. 502; Tieton Hotel Co. v. Manheim, 75 Wash. 641, 135 P. 658; Converse v. La Barge, 92 Wash. 282, 158 P. 958; Mattinson v. Mattinson, 128 Wash. 328, 222 P. 620; Empire State Surety Co. v. Ballou, 66 Wash. 76, 118 P. 923; Wingard v. Wingard, 56 Wash. 389, 105 P. 834, 25 L. R. A., N. S., 453.)

Matthews having purchased under a conditional sale note, acquired nothing which he could convey, or which could have been reached by execution or attachment. (3 Am. & Eng. Ency. of Law, 1st ed., 436; 6 Am. & Eng. Ency. of Law, 2d ed., 486, 487; 24 R. C. L. 455, sec. 752; Williston on Sales, secs. 324-326; Harkness v. Russell, 118 U.S. 663, 7 S.Ct. 51, 30 L.Ed. 285; Mark Means Transfer Co. v. Mackinzie, 9 Idaho 165, 73 P. 135; Kester v. Schuldt, 11 Idaho 663, 85 P. 974; Lippincott v. Rich, 19 Utah 140, 56 P. 806; Silver Bow M. & M. Co. v. Lowry, 6 Mont. 288, 12 P. 652.)

Appellants not having been made parties to the case of Matthews v. Matthews, were not bound by the decree. (Galpin v. Page, 18 Wall. (U. S.) 350, 21 L.Ed. 959; Old Wayne Mut. Life Assn. v. McDonough, 204 U.S. 8, 27 S.Ct. 236, 51 L.Ed. 345; Baldwin v. Brown, 193 Cal. 345, 224 P. 462.)

Witness fees should not be allowed, when the testimony offered is not the best evidence, based upon hearsay and one of the witnesses not even called to the stand. (Bechtel v. Evans, 10 Idaho 147, 77 P. 212; Griffith v. Montandon, 4 Idaho 75, 35 P. 704.)

E. C. Boom, for Respondent.

The insurance contract alone is the measure of the respective rights of the parties thereto. (26 C. J., p. 71, note 10, and cases cited.)

Appellants are not parties to said contract, but merely appointees, and their rights are dependent upon rights of insured. (1 Cooley, p. 790; Woods v. Insurance Co. of Penn., 82 Wash. 563, 144 P. 650, 652, 653; Williams v. Pioneer Co-op. Fire Ins. Co., 183 A.D. 826, 831, 171 N.Y.S. 353; East Side Garage Co. v. New Brunswick F. Ins. Co., 198 A.D. 408, 190 N.Y.S. 634.)

Insured must have insurable interest not only at time policy issues, but at time of loss. (1 Cooley on Insurance, p. 216.)

In absence of proof, there is conclusive presumption that vendor under conditional sale waived right to forfeit buyer's interest; mere failure to pay does not, ex proprio vigore, effect forfeiture. (Leaf v. Reynolds, 34 Idaho 643, 203 P. 458; Wheeler & Wilson Mfg. Co. v. Teetzlaff, 53 Wis. 211, 10 N.W. 155; Teter v. Thompson, 57 Cal.App. 329, 207 P. 260; Lacey v. Great No. Ry. Co., 70 Mont. 346, 38 A. L. R. 1331, 225 P. 808; Pease v. Teller Corp., 22 Idaho 807, 128 P. 981.)

Buyer's interest under conditional sale, before default, or after default waived, is defeasible interest, which may be sold, mortgaged or transferred by judicial decree. (Newhall v. Kingsbury, 131 Mass. 445; Williston on Sales, 2d ed., secs. 326-332; Cable Co. v. Wasegizig, 130 Mich. 387, 90 N.W. 24; Mosby v. Goff, 21 R. I. 494, 44 A. 930; Burdick on Sales, sec. 309; Coniglio v. Connecticut Fire Ins. Co., 180 Cal. 596, 5 A. L. R. 805, 182 P. 275; 24 R. C. L. 496-499.)

Community of husband and wife acquired defeasible interest under conditional purchase by husband, which can be decreed to wife on divorce. (Bannock N. Bank v. Automobile Acc. Com., 37 Idaho 787, 219 P. 200; Ihrke v. Continental Life Ins. & Inv. Co., 91 Wash. 342, 157 P. 866; Converse v. La Barge, 92 Wash. 282, 158 P. 958.)

Decree in divorce, awarding buyer's defeasible interest under conditional sale to wife, as her separate property, terminates interest of husband who was insured, and violates "change of interest" clause in insurance contract. (Elk City First Nat. Bank v. Springfield Fire Ins. Co., 104 Kan. 278, 178 P. 413; Strombald v. Hanover F. Ins. Co., 121 Misc. 322, 201 N.Y.S. 67; Baldwin v. Phoenix Ins. Co., 60 N.H. 164; Melcher v. Insurance Co. of Penn., 97 Me. 512, 55 A. 411; Home Fire Ins. Co. v. Collins, 61 Neb. 198, 85 N.W. 54; Langdon v. Minn. Farmers' Mut. Fire Ins. Assn., 22 Minn. 193; Farmers & Merchants' Ins. Co. v. Jensen, 56 Neb. 284, 76 N.W. 577, 44 L. R. A. 861; Walton v. Agricultural Ins. Co., 116 N.Y. 317, 22 N.E. 443, 5 L. R. A. 677, Trabue v. Dwelling House Ins. Co., 121 Mo. 75, 42 Am. St. 523, 25 S.W. 848, 23 L. R. A. 719; Sherwood v. Agricultural Ins. Co. of Watertown, 73 N.Y. 447, 29 Am. Rep. 180; Burbank v. Rockingham Mut. F. Ins. Co., 24 N.H. 550, 57 Am. Dec. 300; Hine v. Woolworth, 93 N.Y. 75, 45 Am. Rep. 176; Finley v. Lycoming Co. Mut. Ins. Co., 30 Pa. 311, 72 Am. Dec. 705.)

Fact that witness in attendance on trial is not called to testify, does not defeat right to fees, where proper showing is made. (Griffith v. Montandon, 4 Idaho 75, 35 P. 704; Bechtel v. Evans, 10 Idaho 147, 77 P. 212; Delay v. Foster, 34 Idaho 691, 203 P. 461.)

BAUM, Commissioner. Wm. E. Lee, Givens and Taylor, JJ., concur. BUDGE, J., William A. Lee, C. J., Dissenting.

OPINION

BAUM, Commissioner

The appellants in 1921 sold to Harry F. Matthews, an automobile, for $ 1,810, receiving $ 850 in cash and a conditional sales contract, or title note, reserving title in the seller until all payments were made. The balance, as evidenced by the note, was payable on or before September 6, 1922, in instalments of $ 75 per month. The contract among other things provided as follows:

"That should the maker . . . hereof fail to make any of the payments specified herein when due, or sell or agree to sell or dispose of said property or any interest therein . . . without the written consent of said payees, payees may at their option declare this note immediately due and payable and may take possession. . . "

The last payment made by Matthews to apply on the purchase price was on March 14, 1922, and although Matthews was in default, the appellants did not declare a forfeiture of his interest, nor did they take any other affirmative action by reason of default in payments.

On March 28, 1922, Elma Matthews sued her husband for divorce, alleging extreme cruelty, and praying for a decree awarding to her all the community property, which included the automobile.

On October 3, 1922, the respondent, Northwestern Mutual Fire Association, issued to Harry F. Matthews, a policy insuring him from loss against fire, transportation, theft and lightning, for a year commencing September 28, 1922, in the sum of $ 1,000 on the car aforesaid. Attached to the policy was the following clause:

"Subject to all the terms and conditions of this policy, loss if any payable to Coffin & Beglan, of Boise, Idaho, as their interest may appear, otherwise to the insured.

Shortly after the issuance of the policy and on October 30, 1922, Matthews not having appeared in the divorce proceedings, his default was entered, and findings of fact, conclusions of law and judgment, were made and entered, wherein and whereby there was awarded and set over to Elma Matthews, as her sole and separate property the car aforesaid, and other property. No notice of the divorce or change of interest was at any time given to the insurance company.

On January 17, 1923, at Boise, the car was stolen.

Thereafter, and on June 12, 1923, the appellants brought this suit against the insurance company to collect the loss under said policy, Matthews having assigned to appellants whatever interest he had thereunder.

The insurance company answered, admitting purchase of the car by Matthews, retention of title by appellants, issuance of the policy, and proof of loss, but...