Insurance Co. v. Todino

• Decision Date: 14 October 1924
• Docket Number: No 18095,18095
• Citation: 111 Ohio St. 274,145 N.E. 25
• Parties: Ohio Farmers' Insurance Co. v. Todino.
• Court: Ohio Supreme Court

145 N.E. 25

111 Ohio St. 274

Ohio Farmers' Insurance Co. v. Todino.

No 18095

Supreme Court of Ohio

October 14, 1924

Insurance - Automobiles - Sole and unconditional ownership by insured - Noncompliance with automobile registration law defeats recovery.

One who purchases from an insurance company a policy covering on an automobile, which policy contains a provision that the underwriter shall not be liable if the insured be not the sole and unconditional owner of the automobile, may not recover damages under such policy when neither at the time of the procuring of the insurance nor at the time the liability was claimed to have arisen had the owner complied with the provisions of the act of the General Assembly relating to the registration of automobiles, found In 109 Ohio laws, page 330.

The facts are stated in the opinion.

Mr Frank Taggart; Mr. Don McVay, and Mr. S. C. Kerr, for plaintiff in error.

Messrs Gardner & Bigger, for defendant in error.

CONN J.

The facts in this case disclose that one Todino, husband of the plaintiff, on April 29, 1921, procured of the Ohio Farmers' Insurance Company, hereinafter referred to as defendant, a fire aud theft policy covering on an automobile that on October 27, 1921, the husband visited the agent of the company and stated that he wanted the policy "corrected" by having it run in favor of his wife, hereinafter referred to as plaintiff; that pursuant to such direction the agent of the company made an indorsement, substituting the plaintiff instead of the husband as the insured.

Subsequently suit was entered in the full amount of the policy, and defendant answered with a denial of liability, averring that no bill of sale was executed by the husband to the plaintiff in accordance with the act of the General Assembly found in Volume 109, page 330 et seq., of the Ohio Laws, and that the policy contained a provision exempting the company from liability, in event the insured was not the sole and unconditional owner of the property covered by the policy.

Plaintiff and her husband testified that on October 27 1921, the husband gave the car to the plaintiff; that the car was stolen within a day or two thereafter, and proofs of loss were made to the defendant company, which rejected the claim. It was conceded or fully proven at the trial that no bill of sale was executed, and that the policy contained the clause as pleaded by the defendant. The common pleas directed a verdict for defendant and entered judgment thereon, which judgment the Court of Appeals reversed, and the case is here for our construction of that statute, in so far as it is applicable to the precise facts.

It is unnecessary at this time to determine what rights, if any, plaintiff might have against her husband and all the world, if the issue were as to her right of possession of this car. The issue and the only issue in this case is: What right has plaintiff, in view of the sole and unconditional ownership clause, to recover from defendant for the loss of the car, it appearing that no bill of sale had been issued to plaintiff for the automobile prior to or at the time she claimed to acquire title to the car, or at the time the indorsement was placed on the policy, or, indeed, at the time the car is claimed to have been stolen?

It is provided by the above-cited statute that in all gifts in which title passes to a used motor vehicle the person making the gift shall execute, in the presence of two witnesses, a bill of sale in duplicate, and deliver same to the donee at or before the passage of title; that such bill of sale shall be duly verified before a notary public or other person authorized to administer oaths; that any such bill of sale not verified before delivery shall be null and void, and of no effect in law: that each person so receiving a used motor vehicle shall obtain from the person conveying, at or before the transfer or delivery, such bill of sale in duplicate, and, finally, that the person receiving the bill of sale shall, within three days, file one of the duplicate copies with the clerk of courts of the county, who shall affix his official seal to such instrument. Other sections of the act provide money penalties for the failure to observe the several requirements.

The authorities are plentiful that courts always look to the language of a statute, its subject-matter, and the wrong or evil it seeks to remedy or prevent, or, in other words, the purpose sought to be accomplished by its enactment, to determine whether a transaction governed by such statute is void if the statutory requirements be not followed, or whether (there being no direct provision making such transaction void) the penalty provided by the statute for the failure to observe it is all that is to be exacted.

A distinction has been recognized between statutes designed for the protection of the public and those designed primarily for the raising of revenue. The courts are in accord that where a statute is enacted to protect the public against fraud or imposition, or to safeguard the public health or morals, a contract in violation thereof is void, even though a money penalty also is exacted.

The statute under consideration is not a revenue raising measure. No fees of any consequence are paid or are payable. It was not designed to prevent the sale of automobiles. Its sole purpose gas to prevent, in so far as possible, the stealing of automobiles, which, because of the opportunity to commit the crime and escape detection, unfortunately had become, and is still, so prevalent as to be classifiable as a near industry. The declaration of the General Assembly which passed the act is that its purpose was and is to prevent traffic in stolen cars.

In view of the requirement of the statute that a bill of sale shall be verified before it can have force and effect, how can it be successfully argued that no bill at all may have force and effect? Omission of action is not action. Nonperformance is not performance. Failure to do a thing is not the doing of it. The absence of a paper is not the equivalent of a paper. As title cannot pass without a verified bill of sale, and in this transaction no bill of any kind or character was executed by the donor or filed by the donee (plaintiff), how can it be claimed that at the time of the theft plaintiff was the sole and unconditional owner of the car, within the meaning of the policy?

Conditions in policies are part of the consideration. For a small premium an insured obtains a large protection. A recovery on an insurance policy in the face of a violation of the provisions of the policy has the effect of penalizing the prudent and careful policy holders for the benefit of the careless and negligent one. This is so, since insurance companies are merely clearing houses for their policy holders. Such companies primarily bring no property into the world. Insurance companies are trustees of an express trust, and the payment by the officers of such companies of questionable bills and charges is as reprehensible as would be the squandering of trust funds by bankers, administrators, guardians, or other trustees.

Insurance contracts, as a rule, are plain. They follow standard forms. In some states policy foes are settled by statute. While Ohio has not provided a statutory form of policy, practically all policy forms in use in this state are in line with the accepted forms of other states. The one in suit is the standard form. Plaintiff under the law was required to know the contents of her polIcy. If in doubt as to its scope and extent, it wad her duty to consult some one who could advise her. An explanation to the agent of the company of her so-called ownership at the time he was directed by the husband to change...