Sun Ins. Office, Limited v. First Nat. Bank & Trust Co.

• Decision Date: 23 May 1966
• Docket Number: No. 1,No. 41942,41942,1
• Citation: 113 Ga.App. 782,149 S.E.2d 753
• Court: Georgia Court of Appeals
• Parties: SUN INSURANCE OFFICE, LTD. v. FIRST NATIONAL BANK & TRUST COMPANY

Page 753

149 S.E.2d 753

113 Ga.App. 782

SUN INSURANCE OFFICE, LTD. v. FIRST NATIONAL BANK & TRUST COMPANY.

No. 41942.

Court of Appeals of Georgia, Division No. 1.

May 23, 1966.

Rehearing Denied June 2, 1966.

Syllabus by the Court

Where the chattel mortgage non-filing insurance policy contained an exclusion clause against losses 'resulting from any loan made to a dealer when the property is for resale,' and there was evidence demanding the finding that the automobile securing the loan to the dealer was in fact for resale during the insurance coverage period, the judgment in favor of the insured lender and against the insurer was not authorized, notwithstanding the lender's good faith and the dealer's misrepresentation that the automobile was for his personal use.

The First National Bank & Trust Company of Augusta brought an action against Sun Insurance Office, Ltd. to recover benefits allegedly payable under a policy of 'chattel mortgage non-filing insurance.' The policy provided, in part, as follows: 'In consideration of the premium to be paid as hereinafter mentioned, the Company hereby agrees to indemnify the Insured against any direct loss which the Insured may sustain during the term of this policy by reason of having in good faith, and in the usual course of business, taken received, made advances on, made loans against or extended credit upon an Instrument as hereinafter defined, as security for a loan to a customer of the Insured, or purchased such Instrument from a customer of the Insured, but only insofar as the Insured is damaged solely through being prevented from: (a) obtaining possession of the property represented by such instrument and/or retaining the proceeds thereof, and/or (b) enforcing its rights under such Instrument solely because the Insured has intentionally not recorded the Instrument with the proper Public Officer of Public Office, or has not had the proper Public Office show the Insured's encumbrance thereon if the Instrument be a Certificate of Title.' The policy defined 'Instrument' so as to include both a certificate of title and a bill of sale to secure debt on automobiles, among other things.

The record shows that on September 9, 1963, the plaintiff bank made a loan to one R. E. Pinson secured by a bill of sale to secure debt covering a 1963 automobile; that the bank filled out and handed to Pinson an application for a Georgia motor vehicle title certificate, which Pinson said he would file in the county courthouse, so as to change the title from the name of Georgia Motor Sales, Pinson's sole proprietorship for automobile sales, to himself individually; that the bank knew that Pinson was an automobile dealer, having consistently refused him loans on automobiles held for resale in the past; that Pinson represented to the bank that the automobile was for the use of himself and his family; that on November 16, 1963, Pinson sold said automobile to a resident of another state without having obtained a title certificate thereon showing the plaintiff's lien and that the buyer had purchased the automobile without actual or constructive notice of the lien. The basis of the defense of the insurer is the following policy exclusion: 'This insurance shall not indemnify the Insured in respect of any loss or losses: * * * (h) resulting from any loan made to a dealer when the property is for resale.' The court denied the defendant's motion for a summary judgment on the pleadings, heard the case without a jury, and rendered judgment in favor of the plaintiff, from which judgment the defendant insurer appeals.

Smith, Ringel, Martin & Lowe, Ralph H. Witt, Atlanta, for appellant.

Hull, Towill & Norman, Julian B. Willingham, Augusta, for appellee.

FELTON, Chief Judge.

The issue of whether or not the insured's damage was caused solely because it had intentionally not recorded or filed the instrument as required by the policy apparently was not raised in the case. Accordingly, the defendant's liability under the policy depends upon the proper construction of the exclusion urged as a defense.

'It is well settled that the courts of Georgia, if there is any ambiguity in an insurance policy, will construe the contract most favorably to the insured. * * * But it is equally well settled that no construction is required or even permissible when the language employed by the parties in their contract is plain, unambiguous, and capable of only one reasonable interpretation. In such an instance, the language used must be afforded its literal meaning and plain ordinary words given their usual significance, and this rule applies equally as...