Commercial Insurance Co. of Newark, NJ v. Watson

• Decision Date: 31 October 1958
• Docket Number: No. 5842.,5842.
• Citation: 261 F.2d 143
• Parties: COMMERCIAL INSURANCE COMPANY OF NEWARK, NEW JERSEY, Appellant, v. Ed H. WATSON, Roger Rasmussen, Samuel Ruiz, D.D.S., Juana Ruiz, M.D., George H. L. Kuper, European Motor Import Company, Inc., a corporation, and Joseph R. Ferreri, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

261 F.2d 143 (1958)

COMMERCIAL INSURANCE COMPANY OF NEWARK, NEW JERSEY, Appellant, v. Ed H. WATSON, Roger Rasmussen, Samuel Ruiz, D.D.S., Juana Ruiz, M.D., George H. L. Kuper, European Motor Import Company, Inc., a corporation, and Joseph R. Ferreri, Appellees.

No. 5842.

United States Court of Appeals Tenth Circuit.

October 31, 1958.

Leslie D. Ringer, Santa Fe, N. M., for appellant.

Frank B. Zinn, Santa Fe, N. M. (Dean S. Zinn, Santa Fe, N. M., on the brief), for appellee Ed H. Watson.

Joseph A. Sommer, Santa Fe, N. M., for appellees Samuel Ruiz, D.D.S., and Juana Ruiz, M.D.

William W. Gilbert, Santa Fe, N. M., for appellee European Motor Import Co.

Before MURRAH, PICKETT and BREITENSTEIN, Circuit Judges.

MURRAH, Circuit Judge.

The appellant, Commercial Insurance Company, issued its statutory motor vehicle dealer's bond in the penal sum of $5,000 to one Donald E. Powell to comply with the New Mexico statute, for a license to engage in the automobile business in Santa Fe, New Mexico. The bond was conditioned that Powell "* * * shall conduct his business as a dealer * * * of vehicles without fraud or fraudulent representation, and that said applicant shall pay losses, damages and expenses that may be sustained by the purchaser by reason of the failure of title to a motor vehicle * * * sold by such dealer * *." When these three appellees filed claims against the bond growing out of Powell's alleged fraudulent transactions, the appellant brought this action against the appellees in the nature of an interpleader for an adjudication of nonliability. Each of the separate claims stands on its own footing and each is for less than the general jurisdictional amount. But federal jurisdiction is sustained under the interpleader statute. 28 U.S.C.A. § 1335. They were submitted to the court on facts which, for the most part, were stipulated, pursuant to which the court gave judgment for each claimant for the agreed amount of the claim, plus interest from the date of demand and attorney fees, all to be apportioned to the limits of the bonded liability.

European Motor Import Company.

Import was a wholesale dealer in foreign automobiles. Powell represented to Import's Manager that he had a sale for a Volkswagen and induced Import to give him possession of it and to deposit the title papers in the Los Alamos branch of a Santa Fe Bank with a sight draft for the purchase price in the sum of $1,625. The title papers so deposited consisted of an assignment from the original nonresident owner by power of attorney to Import's Manager, and a "reassignment of title by registered dealer" from Import to Powell's Downtown Auto Sales at Santa Fe. When the sight draft was not paid, Powell instructed Import to draw another draft for the amount of the purchase price, with title attached, on another bank where he usually did business, and through which he would "floor-plan" the car. Import finally instructed the bank to release title to Powell without payment of the draft, but to return the attached power of attorney. In a subsequent telephone conversation, Import complained of nonreceipt of payment and Powell professed not to understand why payment had not been made by the bank, and said that he would go to the bank and see what was up. Several days later, Powell sold the automobile and delivered the certificate of title and a bill of sale. Powell died shortly thereafter without having ever paid Import for the purchase price of the automobile. When the purchaser of the automobile from Powell was unable to secure transfer of title because of the absence of the power of attorney from the original owner, Import then delivered the power of attorney to clear the title and took an assignment of the purchaser's claim against Powell.

The appellant seeks to avoid liability to Import on the ground that the bond was intended only for the protection of a purchaser of an automobile from the bonded dealer, and not a seller such as Import. Invoking the doctrine of ejusdem generis in the interpretation of the statutory bond, the argument is that the broad statutory provision that a bonded dealer "shall conduct his business * * * without fraud or fraudulent representations" should be construed in accordance with the more narrow and specific following provision, "and shall pay all losses * * * that may be sustained by any purchaser of a vehicle." The doctrine of ejusdem generis, as applied in New Mexico and elsewhere, is to the effect that "general words in a statute, which follow a designation or enumeration of particular subjects, objects, things, or classes of persons, will ordinarily be presumed to be restricted so as to embrace only subjects, objects, things, or classes of the same general character, sort or kind, to the exclusion of all others." Grafe v. Delgado, 30 N.M. 150, 228 P. 601, 602. See also Sandack v. Tamme, 1 Cir., 182 F. 2d 759.

Here, however, the general words of the statute precede rather than follow the specific. But in any event, the canon is only an aid in the resolution of ambiguity, and we do not think that the condition in the bond that a dealer shall conduct his business without fraud or fraudulent representations needs any amplification or interpretation, and this even though it is followed by the requirement to pay all...