Galati v. New Amsterdam Cas. Co.
| Decision Date | 21 July 1964 |
| Docket Number | No. 31709,31709 |
| Citation | 381 S.W.2d 5 |
| Parties | Sam GALATI, Plaintiff-Respondent, v. NEW AMSTERDAM CASUALTY COMPANY, Defendant-Appellant. |
| Court | Missouri Court of Appeals |
Moser, Marsalek, Carpenter, Cleary & Jaeckel, F. Douglas O'Leary, St. Louis, for defendant-appellant.
Jerome J. Duff, Walter S. Berkman, St. Louis, for plaintiff-respondent.
From a judgment on an automobile collision policy in favor of the insured, the insurer appeals. The pertinent facts, all of which are stipulated or established by uncontradicted evidence to which no objection was made, are as follows:
Sam Galati, the plaintiff, leased a Chevrolet automobile from Manchester Lend-Lease Company on August 1, 1957, for a term of two years under a written contract providing for monthly rental payments of $75 each during the term of the lease. Title to the vehicle remained vested in the lessor. The contract, which has been lost and is not before us for examination, admittedly contained a provision allowing Sam to purchase the car at any time during the life of the lease at a figure to be computed by some no-longer-remembered formula whereby a portion of the rental payments was credited on the purchase price. At the time the lease was entered into Sam was required to obtain, and did obtain from appellant, a policy of collision insurance on the car payable to himself and Manchester Lend-Lease Company as their interests might appear. That policy was in force at all times herein mentioned. The specific provision of it with which we are concerned is denominated Exclusion (1). It recites that the coverage should not apply '* * * if the automobile is or at any time becomes subject to any bailment lease, conditional sale, purchase agreement, mortgage or other encumbrance not specifically declared and described in this policy.'
Sam used the automobile for 'about seven or eight months' and made his rental payments regularly. At the end of that time his aunt, Mrs. DeBlasi, expressed an interest in buying it and Sam cooperated with her fully in that project. Together they went to Manchester Lend-Lease Company where, as Sam testified, '* * * We told them that she was going to take over the car and pay the balance * * *'; that '* * * She was going to buy the car.' The Company agreed. By application of the formula mentioned above it was ascertained that the sale price of the automobile at that date was $2,335.97. Mrs. DeBlasi paid the full amount on the spot, signed 'some papers' of undisclosed import, and was informed by the Company's representative that in due course she would receive the certificate of title. Sam drove her home, turned over to her the car and his only set of keys, testified that '* * * as far as I was concerned it was then her car,' and never thereafter expressed or displayed any further interest in it until the filing of this suit. Two days later Mrs. DeBlasi demolished the car in a collision. Sam's policy had never been assigned to her and she had no insurance of her own. The certificate of title to the car, duly assigned as of the date of the sale, was received by her through the mail some two weeks after the accident.
Sam instituted this action a year later in the Magistrate Court of the City of St. Louis, joining Manchester Lend-Lease Company as a co-plaintiff. That Company, however, seems to have gone out of business in the meantime, and we gather that it was named as a co-plaintiff without its knowledge or consent. In any event it was stricken as a party plaintiff and the cause has since been prosecuted in Sam's name alone. His petition proceeds upon the theory that he was the lessee of the automobile at the time of the collision and that it was then '* * * being operated with the (his) permission and consent * * *.' The cause was submitted to the Magistrate upon an agreed statement of facts which concluded with this recitation: '* * * The defendant has denied payment of the claim because of exclusion (I) as contained on page 3 of said policy.' No other defense was suggested; no answer was filed.
The result of that submission was a judgment in Sam's favor from which the insurer appealed to the Circuit Court. There both sides filed motions for summary judgment to which were attached a copy of the agreed statement of facts entered into in the Magistrate Court and the depositions of Sam and Mrs. DeBlasi. The insurer's motion specified exclusion (1) as a defense to the policy, and then recited: 'Plaintiff Sam Galati parted with all interest in the automobile in question prior to the collision mentioned in plaintiff's petition and sustained no loss as a result of said collision; therefore, plaintiff does not have sufficient interest to maintain this cause of action or to recover under defendant's policy.' We construe that recitation as an allegation that Sam had no insurable interest in the automobile at the time the loss occurred. The point was evidently not stressed at the hearing on the motion, however; at any rate the trial judge made no mention of it in his memorandum opinion. Instead, he concluded that the controlling '* * * issue in the case is the application of exclusion clause (1) * * *,' and he disposed of it by holding that the language of the clause was '* * * ambiguous and of doubtful meaning * * *' when examined against the background of the conceded facts, and therefore to be construed against the insurer. The insurer's motion was accordingly denied; Sam's motion was sustained, and from the ensuing judgment in his favor this appeal has been perfected. Appellant-insurer's brief presents two points for our consideration.
In Point 1 appellant renews its insistence that the exclusion clause is a complete defense to the action because the automobile was subject to a 'purchase agreement' at the time the loss occurred. No authority defining that term within the framework of facts similar to those in this case has been called to our attention, and we have found none. Of course, in the light of the fact that no certificate of title was delivered to Mrs. DeBlasi at the time the purchase money was paid, the sale was void. Sec. 301.210, RSMo 1959, V.A.M.S.; State ex rel. Connecticut Fire Ins. Co. of Hartford, Conn. v. Cox, 306 Mo. 537, 268 S.W. 87, 90, 37 A.L.R. 1456; Still v. Travelers Indemnity Co., Mo., 374 S.W.2d 95, 99. But a 'purchase agreement' and a 'void sale' are surely not the same thing, or at any rate not necessarily so, and to ask us to define the one term so as to include the other is implicitly to concede, it seems to us, that the language of the policy provision is ambiguous. We concur with the learned trial judge in holding that an ambiguous provision cannot avail as a policy defense. Appellant takes the position in this court, however, that the invalidity of the sale is of no significance in assessing the merit of its defense. It argues that any agreement looking to the sale of the car constituted an 'encumbrance' on it--defined, in turn, as 'a burden or charge on...
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