Hicksbaugh Lumber Co. v. Fidelity & Casualty Co., 11607.

• Decision Date: 27 January 1944
• Docket Number: No. 11607.,11607.
• Parties: HICKSBAUGH LUMBER CO. v. FIDELITY & CASUALTY CO. OF NEW YORK.
• Court: Texas Court of Appeals

177 S.W.2d 802

HICKSBAUGH LUMBER CO. v. FIDELITY & CASUALTY CO. OF NEW YORK.

No. 11607.

Court of Civil Appeals of Texas. Galveston.

January 27, 1944.

Appeal from District Court, Houston County; Sam Holland, Judge.

Action by Hicksbaugh Lumber Company against the Fidelity & Casualty Company of New York on an automobile collision policy for damages to plaintiff's truck and trailer. Judgment for defendant, and plaintiff appeals.

Affirmed.

Kennedy & Granberry and F. P. Granberry, all of Crockett, for appellant.

Wood, Gresham, McCorquodale & Martin and Russell Talbott, all of Houston, for appellee.

MONTEITH, Chief Justice.

This action was brought by appellant, Hicksbaugh Lumber Company, as beneficiary under an automobile collision policy issued by appellee, the Fidelity & Casualty Company of New York, to recover damages to a truck and trailer alleged to have been the property of appellant at the time the damages were sustained.

Appellee answered by defensive pleas and exceptions and by a special plea that appellant was bound by the terms of said insurance policy which provided that the liability of the insurance company would cease if the interest of the insured in said equipment became other than unconditional and sole ownership, or in the case of the transfer and termination of the interest of the appellant, or if there was a change in the nature of the insurable interest in said equipment by sale or otherwise. It denied liability on the ground that, at the time of the damage to said equipment, it had been transferred by appellant to and was in the possession of the Hervey Lumber Company.

In a trial before the court judgment was rendered in favor of appellee and against appellant.

The record shows that, on October 25, 1942, appellee had issued to appellant its policy insuring a Chevrolet truck and trailer against damage or loss caused by accidental collision or upset. On December 5, 1942, appellant entered into a contract to sell said equipment to Hervey Lumber Company for a cash consideration of $1000 and the execution and delivery of a promissory note for the sum of $2500 payable to appellant in 30 days. Said equipment was delivered to Hervey Lumber Company on the date of the purchase and was used by it in its business, but no assignment or transfer of the certificate of title to said equipment was made by appellant to Hervey Lumber Company at that time. On December 10, 1942, while said equipment was in the possession of Hervey Lumber Company and was being driven by its agent, it was damaged in a collision. Appellant assigned and transferred the certificate of title to said equipment to Hervey Lumber Company after the collision had occurred and appellee knew nothing of the dealings between appellant and Hervey Lumber Company until after the collision and damage to said equipment.

The policy of insurance in question contained these provisions:

"* * * this policy shall be void * * * if the interest of the insured in the subject of this insurance be or becomes other than unconditional and sole lawful ownership * * * or in case of transfer or termination of the interest of the insured other than by death of the insured, or in case of any change in the nature of the insurable interest of the insured in the property described herein, either by sale or otherwise. * * *"

The sole question presented in the appeal is whether under the "Certificate of Title Act", Article 1436—1 of the Penal Code, Vernon's Annotated, the sale of said equipment by appellant to Hervey Lumber Company without the transfer of the certificate of title thereto conveyed such an interest in said equipment as to violate the provisions of said policy of insurance which provided the policy should be void if the interest of the insured in the subject of the insurance should become "other than unconditional and sole ownership", or in case of any change in the nature of the insurable interest of the property, either by sale or otherwise, and which prohibited the transfer or termination of the interest of the insured other than by death.

The Certificate of Title Act, Article 1436—1, Vernon's Annotated Penal Code, was enacted by the legislature of this State in 1939.

Section 27 of said Act requires the procurement of a certificate of title as a condition precedent to the right to transfer a motor vehicle. By the terms of that section such certificate of title is required for motor vehicles "required to be registered or licensed in this State, or any highway or public place within this State."

Section 53 of the Act provides that: "All sales made in violation of this Act shall be void and no title shall pass until the provisions of this Act shall have been complied with."

It was stipulated by the parties that appellant was the owner of said equipment prior to the date of its transfer to the Hervey Lumber Company and that no certificate of title was issued by appellant to Hervey Lumber Company until after the equipment was damaged in said collision.

The legislative intent, as disclosed in section 1 of the Certificate of Title Act, was to lessen and prevent theft and traffic in stolen motor vehicles (Motor Investment Company et al. v. Knox City, Tex.Sup. Court), 174 S.W.2d 482, 483), and not to prevent sales and transfers of interest in motor vehicles. The Act does not prohibit or provide penalties for persons who have transferred interest in motor vehicles without compliance with the provisions thereof.

Section 53 of the Act provides that all sales made in violation of the Act shall be void and that no title (emphasis ours) shall pass until the provisions of the Act have been complied with. The Act does not provide that no interest (emphasis ours) in the...