Spillane v. Liberty Mut. Ins. Co.

• Court: New York City Court
• Writing for the Court: FRANCIS N. PECORA
• Citation: Spillane v. Liberty Mut. Ins. Co., 65 Misc.2d 290, 317 N.Y.S.2d 203 (N.Y. City Ct. 1970)
• Decision Date: 24 November 1970
• Parties: , 8 UCC Rep.Serv. 332 Terrance SPILLANE v. LIBERTY MUTUAL INSURANCE CO. and Maryland Casualty Co.

Page 203

317 N.Y.S.2d 203

65 Misc.2d 290, 8 UCC Rep.Serv. 332

Terrance SPILLANE v. LIBERTY MUTUAL INSURANCE CO. and Maryland Casualty Co.

Civil Court, City of New York, Trial Term, Part 36.

Nov. 24, 1970.

Paul L. Beck, New York City, for plaintiff.

Fogarty & Nielson, New York City, for Liberty Mut. Ins. Co., defendant; James Hackett, New York City, of counsel.

Gill & Sheehan, New York City, for Maryland Cas. Co., defendant; Gerald McMorrow, New York City, of counsel.

FRANCIS N. PECORA, Judge.

The defendant, Liberty Mutual Insurance Co. ('Liberty') had insured one Peter J. Caputo against loss by theft of a 1966 Buick Riviera automobile, said vehicle bearing identification #494876 H 932744. His automobile was reported stolen. 'Liberty', under its theft policy, paid Caputo for his loss and took from Caputo an assignment of his ownership of the car.

Thereafter, a 1966 Buick Riviera was recovered by the police. 'Liberty' claimed this vehicle as that which had belonged to Caputo, and took possession of this car. At this time, the automobile had been striped of many of its parts, including bumpers, seats, doors, etc. and was otherwise damaged.

'Liberty' sold this vehicle to the plaintiff herein on March 9, 1967 for the total sum of $575.00.

The plaintiff then proceeded to have the car restored at an additional cost to plaintiff in the sum of $3017.19.

After completion of the restoration, plaintiff attempted to sell the car, and, for the first time, his attention was called to the fact that one of the serial numbers of the car was missing. His suspicion aroused, plaintiff immediately communicated with the National Auto Theft Bureau, and the following facts came to light:

The defendant, Maryland Casualty Company ('Maryland') had insured a 1966 Buick Riviera bearing identification #494876 H 27921. This automobile had been reported stolen. 'Maryland' paid its assured the value of the car, and took from its assured an assignment of ownership.

Since the vehicle was located in Mount Vernon, the Bureau of Police of the City of Mount Vernon was notified, and in due course, the vehicle was seized and impounded by the Mount Vernon Police, who thereafter released the car to 'Maryland'.

An examination of the vehicle by Donald R. Zivney, an employee of the National Auto Theft Bureau, indicated that the 'Liberty' vehicle and the 'Maryland' vehicle were one and the same. In effect, this witness testified that the engine of the vehicle was that of the car originally insured by 'Liberty' and that the chassis of the vehicle was that of the car originally insured by 'Maryland'.

The plaintiff thereupon demanded that 'Maryland' return the vehicle to him, but 'Maryland' refused, claiming that the vehicle was theirs. The plaintiff then demanded that 'Liberty' make him whole by reimbursing him for his loss, but this claim was met with deaf ears.

The plaintiff then commenced this action against 'Liberty' and 'Maryland'.

For the purpose of resolving the issues in this case the court need only direct the attention of the parties to Section 2--312 of the Uniform Commercial Code, which provides as follows:

'(1) Subject to subsection (2) there is in a contract for sale a warranty by the seller that

(a) the title conveyed shall be good, and its transfer rightful; and

(b) the goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge.

(2) A warranty under subsection (1) will be excluded or modified only by specific language or by circumstances which give the buyer reason to know that the person selling does not claim title in himself or that he is purporting to sell only right or title as he or a third person may have * * *'.

When 'Liberty' sold the vehicle herein to the plaintiff, there was attached...