CONSOLIDATED UNDER. v. Pennsylvania T. & F. Mut. Cas. Ins. Co.

• Court: U.S. Court of Appeals — Eighth Circuit
• Writing for the Court: VAN OOSTERHOUT and BLACKMUN, Circuit , and YOUNG
• Citation: CONSOLIDATED UNDER. v. Pennsylvania T. & F. Mut. Cas. Ins. Co., 324 F.2d 21 (8th Cir. 1963)
• Decision Date: 31 October 1963
• Docket Number: No. 17238.,17238.
• Parties: CONSOLIDATED UNDERWRITERS, Appellant, v. PENNSYLVANIA THRESHERMEN & FARMERS MUTUAL CASUALTY INSURANCE COMPANY, Appellee.

324 F.2d 21 (1963)

CONSOLIDATED UNDERWRITERS, Appellant, v. PENNSYLVANIA THRESHERMEN & FARMERS MUTUAL CASUALTY INSURANCE COMPANY, Appellee.

No. 17238.

United States Court of Appeals Eighth Circuit.

October 31, 1963.

John J. Alder, of Alder & Morrison, Kansas City, Mo., for appellant.

James J. Amelung, of Holtkamp, Miller, Risch & Amelung, St. Louis, Mo., for appellee; Joseph Bott, Kansas City, Mo., on the brief.

Before VAN OOSTERHOUT and BLACKMUN, Circuit Judges, and YOUNG, District Judge.

YOUNG, District Judge.

Appellant instituted this diversity action against appellee to recover the sum of $79,479.63, which was allegedly due from appellee under a policy of liability insurance issued by appellee to the Suburban Motors, Inc., Kirkwood, Missouri (hereinafter referred to as Suburban). Appellee's liability insurance policy was issued to Suburban extending coverage for any automobile owned by Suburban and used with the permission of Suburban, provided that the automobile was being used in connection with Suburban's business operations. Appellant's liability insurance policy was issued to one Harold I. Krause, and the policy provided coverage to Krause for any automobile driven by him regardless of ownership; however, with respect to an automobile not owned by Krause, his insurance was only excess insurance.

A statement of agreed facts was filed in the court below, and appellant and appellee each filed a Motion for Summary Judgment. The appellant's motion was denied and the appellee's motion was granted. Accordingly, judgment was entered for appellee, and now appellant has appealed the denial of his motion and the judgment entered for appellee. The material facts agreed to, and as stated by the trial judge below in his opinion, are as follows:

In 1957, Suburban was engaged in the sale of Ford automobiles in Kirkwood, Missouri, and employed a salesman named H. W. Rinklin. On or about September 17th of that year, Suburban sold to Rinklin a new 1957 Ford automobile (which is the subject of this controversy) for his wife, Jane Rinklin. Rinklin paid to Suburban $250.00 in cash and executed a note and mortgage for the balance of the purchase price, which note and mortgage were sold by Suburban to a local trust company.

At the time of the delivery of the automobile, Suburban delivered a bill of sale and executed a regular form MMV-21 to Jane Rinklin. (MMV-21 is the form of bill of sale prescribed by the Missouri Commissioner of Motor Vehicle Registration.) Jane Rinklin secured license plates from a car previously owned by her and placed these plates on the new Ford. In order to avoid the payment of sales tax, she did not apply for a certificate of title or Missouri license plates, as required by Mo.Rev.Stat. § 301.020 (1949) V.A.M.S. She made three monthly installment payments on the note and mortgage to the local trust company, and drove the automobile approximately 4,000 miles.

At the time of the sale of the car, it was agreed between Suburban and Rinklin that if the new Ford transferred to Rinklin by Suburban were resold at a price in excess of the purchase price paid by Rinklin, the amount of the excess would be divided equally between Rinklin and Suburban. Later, the following November 29th, Rinklin found Harold I. Krause as a purchaser for this automobile. The profit on this sale to Krause amounted to $339.90, which was divided equally between Rinklin and Suburban. At the time of this transaction, the bill of sale and the MMV-21 which had been previously issued to Jane Rinklin were surrendered to Suburban and a new bill of sale and MMV-21 in the form prescribed by statute were issued by Suburban to Krause. Krause knew at this time that the Ford had been owned and driven by Jane Rinklin approximately 4,000 miles. Pursuant to this transaction, Krause traded in a 1955 car and assigned the title to that car to Suburban. In addition, Krause gave a note and chattel mortgage to Suburban, which in turn Suburban sold to a local trust company; the amount received being credited to Rinklin's account with Suburban and applied against Rinklin's note and mortgage, thus liquidating any obligation by Rinklin.

On December 6, 1957, Krause, while operating the Ford acquired from Rinklin and Suburban, had a collision with another car, resulting in the death of Krause and injury to the occupants of the other car. Krause had not at that time applied for nor obtained a certificate of title from the State of Missouri on the automobile.

At the time of his death, Krause had a policy of liability insurance with appellant, and also a policy of collision insurance with another company. Krause also had a mortgage policy of life insurance issued in connection with the purchase of the automobile. The proceeds from this policy paid off the mortgage given by Krause on the car and thus liquidated Krause's obligation. Following Krause's death, his wife was appointed administratrix of his estate.

After the collision, Suburban took back the bill of sale that had been issued to Krause and applied for a certificate of title from the State of Missouri on or about January 15, 1958, in its own name, setting out that the automobile was "new" and "never registered." A certificate of title was duly issued to Suburban which was the first and only title which had been issued on the automobile. Later, Suburban sold the wreckage of the automobile, endorsed the title in blank, and credited the proceeds of the sale to the account of Krause's wife. Following the collision, and after claims were made against Krause's estate, appellant made timely demand upon appellee to assume and participate in the settlement negotiations and defense of the litigation, and to pay any judgment or settlements because of the casualty and the alleged injuries and death. However, appellee refused to participate in any of the negotiations or transactions. Appellant effected a settlement of all such claims for the total amount now sued for.

The trial court rejected appellant's contention that at the time of the collision the automobile was owned by Suburban and was being driven with Suburban's permission and therefore covered by appellee's policy with Suburban. The trial court recognized that Suburban and the Rinklins had all violated the registration laws of Missouri. However, the court held that the automobile was not owned by Suburban at the time of the collision because when Krause purchased the automobile in good faith, paid the purchase price, received possession of the car and a bill of sale in accordance with the requirements of Mo.Rev.Stat. § 301.200 (1949), V.A.M.S., he became the owner of the car and upon presentation of such bill of sale he would have been entitled to a certificate of ownership. Accordingly, judgment was entered for appellee, and appellant appeals, contending that under the Missouri automobile registration laws Suburban "owned" the automobile driven by Krause at the time of the collision and the trial court erred in its construction of the appropriate Missouri statutes.

This case revolves around the principal question of whether or not Suburban "owned" the automobile at the time of the fatal collision. Unless Suburban did "own" the automobile, appellant's cause here must fail. Determination of exactly who did own the automobile at the time of the fatal collision is not before this court; only whether or not Suburban "owned" the automobile.

There are two sections of the automobile registration laws dealing with the sale of motor vehicles in Missouri. Mo. Rev.Stat. § 301.200 (1949) V.A.M.S., defines the procedure in connection with the sale of new motor vehicles and Mo. Rev.Stat. § 301.210 (1949) V.A.M.S., deals with the transfer of used cars.

Mo.Rev.Stat. § 301.200 (1949) V.A. M.S., provides as follows:

"1. In the case of dealers, a separate certificate of ownership, either of such dealer\'s immediate vendor or of the dealer himself, shall be required in the case of each motor vehicle in his possession, and the director of revenue shall determine the form in which application for such certificate of ownership and assignment shall be made, in case forms differing from those used for individuals are, in his judgment, reasonably required; provided, however, that no such certificate shall be required in the case of new motor

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