Insurance Co. v. Jack

• Decision Date: 02 June 1925
• Docket Number: 18568
• Citation: 113 Ohio St. 153,148 N.E. 923
• Parties: Royal Insurance Co., Ltd., v. Jack.
• Court: Ohio Supreme Court

148 N.E. 923

113 Ohio St. 153

Royal Insurance Co., Ltd., v. Jack.

No. 18568

Supreme Court of Ohio

June 2, 1925

Insurance - Automobile theft policy - "Theft" construed - Fraudulent transaction by vendee not "theft," when - Payment for automobile with fraudulent check.

1. A policy of insurance was issued, Indemnifying the owner of an automobile against loss by "theft, robbery, and pilferage." In construing the term "theft," it should be given the usual meaning and understanding employed by persons in the ordinary walks of life.

2. Where an owner of an automobile executes a contract of sale for the car, helps the vendee change the license numbers and, in pursuance of his contract of sale, transfers possession and title to vendee, who pays therefor with a forged check, such fraudulent transaction so perpetrated by the vendee does not constitute a "theft," within the terms of the policy.

________________ [1.] Theft, 35 Cyc., p. 272 (1926 Anno.); [2.] Burglary and Theft Insurance, 9 C. J., Section 7. ________________

William S. Jack, the defendant in error, brought suit against the Royal Insurance Company, seeking to recOver the sum of $4,000 on a policy of insurance insuring an automobile, by which policy the insurance company agreed to pay plaintiff such sum in the event of the loss of said automobile by theft robbery, or pilferage. The petition alleges that on or about the 11th day of June, 1918, plaintiff lost the automobile by theft and pilferage thereof committed by one J. W. Lewis.

The insurance company filed an answer containing several defenses. However, the only allegations in the answer necessary to be considered are those containing a general denial, and especially denying that the automobile was lost to the plaintiff by theft, robbery, or pilferage, but alleging that on the 11th day of June, 1918, Jack sold and delivered said automobile to Lewis, and that possession and title thereto passed under the sale.

The cause came on for trial before the court and jury, and at the close of plaintiff's evidence the insurance company moved for a directed verdict. This motion was sustained by the trial court who rendered judgment in favor of the defendant. The Court of Appeals reversed the judgment of the trial court solely for error in directing a verdict, whereupon error proceedings were instituted in this court.

The salient facts upon which the trial court directed the verdict are not in dispute, and were given in evidence by the defendant in error who took the stand as a witness in his Own behalf. The facts testified to by him are as follows: He testified that he owned a Packard touring car about three months before he obtained the policy of insurance. This policy was issued to him on May 28, 1918, for a period of one year, in the sum of $4,000, and contained a coverage against loss by "theft, robbery, or pilferage." On about the 9th or 10th of June, 1918 desiring to dispose of his car, he consulted the Cleveland Cadillac Company, who referred him to one J. W. Lewis, who was looking for a Packard car. Lewis had an office in the Rose building in Cleveland, Ohio. Jack, after a conference with Lewis and a demonstration of the car by an employe of the Packard Company at Cleveland, agreed with Lewis upon a sale price of $4,100. This was about the 11th of June. On that day they proceeded to the office of the Guarantee Title & Trust Company, where a representative of that company drew up a contract of sale, which was signed by both parties, whereby Jack agreed to sell Lewis the automobile for $4,100, which was to be paid in ten days. In the meantime a check for $100 upon the purchase price, and 50 shares of Cumberland Pipe Line Company stock, together with the contract, were deposited with the representative of the trust company. About the 21st day of June, when the sale was to be consumated, Jack and Lewis again met at the Guarantee Title & Trust Company office, where Lewis produced a check for $4,100, purporting to be certified by the East River Trust Company of New York City. This check was turned over to Jack., while the $100 check and the 50 shares of pipe line stock deposited with the Guarantee Title & Trust Company were delivered to Lewis. Mr. Jack asked the officer of the Guarantee Title & Trust Company whether the check was "perfectly all right." He answered, "A certified check ought to be as good as gold." When this transaction was consummated, Lewis wanted to take the car, but Jack insisted that the license numbers were his, and that Lewis should obtain new license numbers. They, both proceeded to the courthouse, where Lewis made application for new license plates, paying $5 therefor, all of which occurred in the presence of Jack. They then approached the automobile standing without, where Jack helped Lewis to take off the old license plates and replace the new. Lewis then drove the car away. Jack testified that he followed the advice of the trust company, and "turned over" the car to Lewis in pursuance of their agreement of sale, and "I expected him to have the car and I to get my money." Later, it appeared, the certified check for $4,100 was returned marked "fraudulent." The signatures of certification upon the back of the certified check appeared to be illegible. The foregoing constituted the facts testified to by the defendant in error, upon which the trial court directed a verdict.

The sole question to be determined is whether these facts constitute theft within the meaning of the policy which insured the automobile against loss thereby.

Messrs, Mooney, Bibbee & Edmonds, and Mr. M. P. Guenther, for plaintiff in error,

Mr. John A. Cline and Mr. Dorr E. Warner, for defendant in error.

JONES J.

While the conceded facts disclose that Lewis secured possession and title to the automobile by swindle, they no less disclose that the owner, Jack, voluntarily parted with both possession and title upon the faith of the fraudulent representations made by Lewis. Under the circumstances disclosed, there is no doubt but that Lewis would be guilty of obtaining property under false pretenses under Section 13104 of our criminal code. However, Lewis would not be guilty of larceny of the automobile under Section 12447 or Section 12448, General Code.

The defendant in error relies for recovery upon the principles announced in the Kansas cases: Hill v. Noah River Ins. Co., 111 Ran., 225, 207 P. 205,, 24 A.L.R. 736, and Overland-Reno Co. v. International Indemnity Co., 111 Ran., 668, 208 P. 548. It must be conceded that if these cases were followed tile plaintiff below would be entitled to recover upon the facts presented. The Kansas cases decide that, under a clause in the insurance policies contracting against "theft, robbery, or pilferage," the act of a swindler by which the owner of the property is swindled out of it through false pretenses with preconceived intent is a species of theft for which the insurance company becomes liable. Both Kansas cases state that:

"The prevailing rule is that any scheme whether involving false pretenses or other fraudulent trick or device whereby an owner of property is swindled out of it with the preconceived intent of the swindler not to pay for it, is classed as larceny and is punished accordingly."

Such a scheme, if it involves transfer of both possession and title to property pursuant to a sale, is not classed as larceny in this state.

In Kellogg v. State, 26 Ohio St. 15, McIlvaine, C. J., delivering the opinion, said at page 19:

"Where the owner intends to transfer, not the possession merely, but also the title to the property, although induced thereto by the fraud and fraudulent pretenses of the taker, the taking and carrying away do not constitute a larceny. In such case the title vests in the fraudulent taker, and he cannot be convicted of the crime of larceny, for the simple reason that, at the time of the transaction, he did...