Massachusetts Fire & Marine Insurance Co. v. Cagle
| Decision Date | 22 November 1948 |
| Docket Number | 4-8640 |
| Parties | Massachusetts Fire & Marine Insurance Company v. Cagle |
| Court | Arkansas Supreme Court |
Appeal from Clark Circuit Court; Dexter Bush, Judge.
Affirmed.
John M. Lofton, Jr., and Owens, Ehrman & McHaney, for appellant.
J H. Lookadoo and McMillan & McMillan, for appellee.
Sole question presented by this appeal is whether a policy of insurance issued by appellant to appellees covered loss suffered by appellees by reason of a swindle, perpetrated on appellee Cagle, by which Cagle lost a 1946 Ford Tudor Sedan. Appellees sought judgment against appellant on the ground that the transaction between appellee Cagle and one George S. English (alias Yeargan), under which the car was obtained from Cagle by English (or Yeargan), amounted to a theft. The defense of appellant was that the language of the policy excluded liability for the loss.
The lower court sitting as a jury found the issues in favor of appellees and rendered judgment in their favor for the amount demanded. This appeal ensued.
The case was tried in the lower court on an agreed statement of facts. The insurance policy included a coverage known as "comprehensive," and covered any loss of insured as to the automobile, except damage by collision. Theft was one of the losses mentioned as being covered.
The policy, however, contained this provision which forms the basis of appellant's contention that it is not liable: "This policy does not apply: . . . (b) under any of the coverages, while the automobile is subject to any bailment, lease, conditional sale, mortgage or other encumbrance not specifically declared and described in this policy; . . . (g) under coverages A and D, to loss due to conversion, embezzlement or secretion by any person in lawful possession of the automobile under a bailment, lease, conditional sale, mortgage or other encumbrance."
Appellee Cagle, a dealer in Arkadelphia, had for sale on a used car lot in Arkadelphia the Ford car herein involved. About 4:30 p. m. on July 12, 1947, Greely Hurst, a resident of that city and personally known to Cagle, came upon the lot accompanied by a man introduced to Cagle by Hurst as his son-in-law, who desired to purchase the Ford automobile. After some negotiations an agreement for sale of the Ford car at the sum of $ 1,650 was made. The purchaser represented himself to be George S. English, an employee of a real estate company in Little Rock. He showed Cagle cards and papers indicating that he was such employee and that he was under $ 10,000 bond to his employer. He also exhibited to Cagle a passbook of a Little Rock bank showing that on that very day he had made a deposit of $ 9,000 in the bank. The bank book showed no other deposit. After examining the credentials and passbook Cagle accepted from "English" a check for $ 1,650 drawn on the Little Rock bank which had issued the passbook and turned the automobile over to "English". Cagle would not deliver bill of sale for the car then, but attached it to the check, which was to go through the Merchants & Planters Bank & Trust Company for collection, and it was agreed that the title should not pass until the check was cleared. "English" had stated to Cagle he was in Arkadelphia to visit his father-in-law and would stay for some time. Although it was after banking hours when the transaction occurred Cagle succeeded in getting in the bank and had it forward the check for collection so as to reach the drawee bank at Little Rock on Monday, July 14th. On July 15th the check was returned marked "insufficient funds".
It developed that no George S. English had made a $ 9,000 deposit in the drawee bank, but some one had deposited in that name $ 100 in cash and check for $ 800, which never was paid, so that in fact there was never actually more than $ 100 on deposit in the name of "English" in the bank on which the check for $ 1,650 in favor of appellee Cagle had been drawn.
Investigation showed that the man who obtained the car from Cagle was not "George S. English", but was George F. Yeargan that he was the son-in-law of Hurst, who had introduced him, and that Yeargan and his wife had on the same day sold a used car dealer in Arkadelphia an automobile which they represented to be free of encumbrances, but which in fact had an outstanding title note against it. The man who bought Yeargan's car gave him a check for the purchase price drawn on the Elkhorn Bank & Trust Company of Arkadelphia. When that bank opened on the morning of Monday, July 14th. Mrs. Yeargan was there and obtained payment of this check. Yeargan was driving the Ford automobile obtained from Cagle and immediately after his wife collected the check they...
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