Fulwiler v. Traders & General Insurance Company

fоund lien are the mechanic’s forcement re- Accordingly, we merit. without

to be trial holding the court cor- our

affirm the claimed denying foreclosure of

rect and remanded is reversed

lien, but the case lower court direction to

with complaint permit trial plaintiff’s

instate personal claim only as to the issues on account defendants Sedillo ordered. It is so

stated. COMPTON, J.,C. LUJAN

SADLER, JJ., concur. participating.

KIKER, J., not

285 P.2d FULWILER, Fulwiler Motor

H.C. d/b/a Plaintiff-Appellee, Company,

Finance INSURANCE GENERAL

TRADERS &

COMPANY, Defendant-Appellant, Turk, A. and Dick

Allen

Defendants-Appellees.

No. 5906.

Supreme of New Mexico. Court

May 6, 1955.

Rehearing Denied June

Quincy Adams, Foley, D. H. Al- James buquerque, appellant. for Philip Dunleavy, Albuquerque, H. for C. Fulwiler, appellee. H.

McGHEE, Justice. question presented upon appeal assignee one as relates to or interest under a contract vendor’s for the pro- sale of an automobile conditional company upon an insurance ceed of automobile policy ‍‌​‌‌‌‌​‌‌‌‌‌​​‌​‌​‌​​‌​​​‌​‌​​​​‌‌​‌​​​‌‌​‌​​‌‌​‍covering insurance its or'upset naming collision loss pro- payment with the teed the Cooper’s conditional vendee as insured indebtedness assignee plaintiff. was to such vision loss as their interests

and the insured vendee The conditional sale contract reserved the automobile insured appeared, where title in the seller until full amount extensively damaged upset while was indebtedness was discharged, provided that possession assignee after loss, injury nо or prop- destruction of the possession for default of erty should purchaser release the from his payments. stipulated making vendee obligation and made provision further for repossession by the upon seller default of plaintiff, Judgment was as- below for buyer. It was agreed the seller might vendor, against signee of the conditional possession take upon event, such either di- company, which the defendant insurance rectly through a sheriff or other legal appeal. brings this officer, retаin payments all theretofore May 8, the defendant issued an On made and re-sell the property public at Turk, policy insurance to one automobile private sale, with or without notice to the Mexico, Gallup, insuring New the au- buyer and with the right in the seller to question its actual cash tomobile bid the property public at sale. The value, deductible, coverage ex- less $50 empowered seller was to deduct all ex- year date. for one from said Under tend penses and sale and then as оriginally Turk was named apply the proceeds balance of from such Bank of insured and the First State sale to the amount due on the contract. Gallup loss-payee. designated Any surplus remaining paid was to be buyer buyer September Turk sold the liable for Grants, any deficiency. automobile to Allen a month About after

New Mexico. This sale was financed the above described plaintiff. negotiation, assigned following general Turk his contract change and received him the endorsement from attаched to on the car owing sum of There was balance g. Clay $700. Fultz Gallup, Agency Mexico, Turk of which the New agreed agent $133 vendee, when the to remit defendant:

Cooper, hereby payments had made sufficient “Notice is given on that plaintiff bring indebtedness to the name insured his should now read: Cooper remaining amount due “Allen down Upon loán value automobile. Store, Your Grants, Food New “% contract, assignment of the Turk guaran- Mexico or six Turk held the car for a month there that given is also

“Notice plain- Ful- weeks when he advised payable in favor now loss Gallup to Company, being Al- tiff that a man was sent to wiler Motor Finance Mexico, possession and drive it to buquerque, amount take of the car New plaintiff’s Albuquerque. Ac- $1065.60, payments in 18 office in payable April employee cordingly, The in favor on an loss $59.20. plaintiff Apodaca Bank is eliminated. named arrived First State Gallup take the One of the office car. “All other terms and conditions employees testified it was in- unchanged.” main placed plaintiff’s car tended the would be оn stood, While condi- matters thus for lot and advertised re-sale. Before turn- pay- buyer, Cooper, his defaulted in tional Apodaca, automobile ing the over to Turk contract, whereupon ments under complete asked for a release from the plaintiff either Turk ad- called or wrote plaintiff. attorney prepared Turk’s such a vising asking him of the that default plain- release which executed for the automobile, repossess he which he did. by Apodaca. tiff The evidence was con- Aсcording testimony Cooper will- to Turk’s flicting Apodaca as to whether or not had ingly him surrendered automobile to any authority Ap- ‍‌​‌‌‌‌​‌‌‌‌‌​​‌​‌​‌​​‌​​​‌​‌​​​​‌‌​‌​​​‌‌​‌​​‌‌​‍to execute such release. Turk, salesman, who was a used car odaca being then took the car while doing took it with the intention of what Gallup Albuquerque driven from it over- it, pay he could with it —either to re-sell badly turned and damaged was so it had out, plaintiff. it or turn it over to the He only salvage value of $200. also testified that at the time The brought then this action ask- made, upon аssumption was done ing judgment against com- Cooper was to suffer no further lia- pany payee as loss on the described bility correspond- on the contract and was Cooper insurance. Turk and were ingly against anyone to retain no claim named as defendants. The insurance com- any surplus remaining proceeds from on pany ground plain- defended re-sale after satisfaction of the debt due. tiff was not insured loss under the was, however, There no showing that Turk question and that neither Turk to releаse authority whatsoever had Cooper nor had insurable interest in the plain- with the Cooper from the time of automobile at loss. directly waived or sur- tiff, tried to the any right might he have in the case was court which rendered Apodaca authority had no proceeds upon re-sale. found ly appointee proceeds in either an plaintiff to receive the rights release of the the con- As policy appear. sale might as his automobile or the interest just tract; appointеe recovery the automobile such is de- right the value of his pendent $1,095; that preceding having was the accident the named insured loss, salvage value deducting property insurable at net after provi- deduction time of for the loss. Plaintiff is not entitled to $200 $50 It concluded on policy, policy of the was cover neither sions because $845. insured, original under the plaintiff Cooper, a named insured named in- nor the sured, Turk, insur- policy that he had an had an insurable interest in insurance automobile on the date the car interest in the at the time of loss. able the balance the extent of the accident to Our attention is directed de expenses and his on due the contract on fendant to the difference ’between a loss- was entitled to repossession; that Turk open mortgage clause in an in Cooper had an payment and that of $133 policy, surance union a or standard Judgment equity in the car of $45.38. mortgage substance, clause. the dis respec- parties in for'such then entered tinction is loss-payable that under a clause against the defend- sums mentioned tive no contract of insurance is made between company. ant loss-payee the insurer and the and the assigned errors are directed to Numerous recovery loss-payee cannot rise requested grant refusal to find- court’s insured, above the named so that a and conclusions of law tendered fact ings of by. breach the conditions policy defendant, findings of the court precludes recovery insured which respеcting the value of the automobile be- recovery likewise defeats ap of his accident, authority the lack fore the pointee, loss-payee. (In 29 Am.Jur. given the release Apodaca execute to surance) Whereas, 552. under a union § plaintiff Turk, conclusion the was a mortgage or standard usually clause it under the and the insured named provided the interest of the mortgagee in in favor judgment of Turk and granting proceeds shall not be de the defendant. Cooper neglect by the act of the mort feated appear- property. Turk nor makes of the insured gagor or owner Neither court. (Insurance) ance § Am.Jur. loss-payable princi- consider defendant’s clause was before the will first A

We may paraphrased Ford, which in Tri-State Ins. Co. v. pal argument as court D.C. N.M.1954, F.Supp. 118, not a in- named where it follows: policy, under the insurance but mere- was said: sured phrase may ‘payable longer disputed

“The as interest is no provision loss-payable as a that what is a appear’ idеntifies this involved here is clause’; clause, contend, ‘loss-payable as such and he does not as he did standard court, rights the lower that he a is well settled named in- loss-payable sured under the policy. argument under such His mortgagee support is, rights judgment however, than the of higher rise no clause that the insured, Cooper, named insured.” violated no the condi- policy, and, specifically, tions of the that 11, p. report 123 of ‍‌​‌‌‌‌​‌‌‌‌‌​​‌​‌​‌​​‌​​​‌​‌​​​​‌‌​‌​​​‌‌​‌​​‌‌​‍the this footnote At Cooper retained an insurable interest in the quoted is matter from case, following the automobile at time the of loss. v. Fire Ins. Co. Rud- Hamburg-Bremen 30, Tex.Civ.App. 1904, 82 S.W. 826: dell, agree plaintiff. We must with the 37 By the terms of conditional sale the con “ ‘ * * * proper The is provided: it was transfer, tract “No re company and the insurance between newal, assignment extension or of this con and the property, ef- the owner the any thereunder, loss, tract or interest or in directing that the the clause fect jury property or destruction said shall any, payable to loss, shall be the if purchаser obligation release here from appoint or to name but mortgagee, (Emphasis under’’. supplied.) entitled to re- person party as the that absolutely There no indication in the in the fund event payment of ceive the that empowered by record Turk was payable the terms under loss becomes plaintiff to Cooper release from his liabili- any not policy. But whether or of the ty under the contract. The most Turk was dependent en- loss is at all is repossess authorized to do was to the au- tirely upon performance Cooper. from tomobile We think there the in- terms of the contract between any dispute not well be could that under surer and the insured. Cooper the contract bore risk of loss stipulated expressly instance or damage destruction property. any in case of the same should be void litigated neither contended nor It was insured; below part fraud property injury was the re- and, not, public poli- if it did a sound negligence or permit by either willfulness on recover sult of cy not him to would plaintiff’s employee and, who act, ap- part of drove since the criminal his own As matters rights pre- these are never the car. pellee must claim whatever he sumed, had a we believe through by and of the mort- clear has virtue contract, proceed his claim also falls gagor’s cases.)”’ Hollenberg Music ground. sustained. (Citing loss Co. v. 582, 403, Barron, 1911, Shortly credit for that S.W. ceived amount. Ark. 594; into, L.R.A.,N.S., Jones, Chattel after the contract was entered (Bowers replevied used Mortgages Sаles truck was from the truck and Conditional Ed., developed 1176, company cited authorities 1933) Housley had no § title Immediately therein. truck. thereafter company repossessed the truck from Hous- gen An insurable interest has been ley they the truck had sold him. erally defined case Harrison placed upon company’s the truck lot and 488, Fortlage, 161 U.S. 16 S.Ct. was stolen therefrom. The court there 40 L.Ed as follows: upheld the contention of insurance com- “* * * any It is well settled of insurance pany that on which person an insurable interest has company loss-payee truck property, by the existence of which he Housley’s by termination of avoided in- gain will advantage, the de- the truck change terest loss, struction which he will suffer a company’s the truck interest. It was said: whether he has or not has title “The in, upon, possession or lien Federal truck terminated the * * *” property itself. vendee, Housley, which a warranty created the breach of of open We think it is not to con out; title above set and it also changed troversy vendee, such, that a conditional as the of the interest plain- n.ature an property has insurable in the interest tiff, by since termination of con- the sold, contracted to but it is defendant’s sale ditional contract the relation of repossession contention the the and lessor lessee was extinguished property by plaintiff any the terminated plaintiff the and resumed full owner- the which conditional vendee had ship the property. Its interest was in it. We are referred the case of changed by also the fact that under the Corp. C. I. T. v. American Central Ins. express provisions of the contract the Co., 1937, Cal.App.2d 673, 742, 64 P.2d risk of loss was borne the lessee 745, authority proposition. as for vendee, but this risk was reassumed plaintiff the took assignment There an by the through termination .a sale conditional contract from a truck repossession.” of the contract by company which had a sold truck to one the contract. As Housley under a down any Without expressing conclusion as to payment Houslеy in a turned used truck the correctness opinion, of this the case $1,350 at an agreed valuation of re- is clearly distinguishable from present the Ass’n, case In the California Brown Fire its facts. v. Northwestern Mutual one 1934, 693, 640; termi- completely act Wash. 30 P.2d Howell any and, apparently, 1928, Co., equity, Rutgers v. Globe any both & Fire Ins. nated property buyer and 133 liability in the Misc. N.Y.S. 67. words, there was In the contract. other Tux-k testimony of at time the contract. an absolute rescission of trial he effect that neither nor the case That is not here. Cooper presently any equity claimed in the may be said of the case The same operate automobile cannot to defeat Ford, supra, where Ins. Co. Tri-State rights plaintiff, as the interests of insurance mortgagor obtained persons these must be determined that no misrepresentation by fraudulent at facts the time of Commercial loss. himto policies issued insurance automobile Eisenhour, Credit Co. v. 28 Ariz. preceding year cancelled been had 236 P. 41 A.L.R. 1274. insurance, the loss- appliсation for disposition point Under the made of this chargeable with mortgagee, was payee, the unnecessary to determine whether r policies prio cancellations notice finding Apo- court lower period. such within authority daca had no to release Turk from parties have done case present liability should stand. customary pro follow than no more is further contended the defendant sale trans obtaining conditional cedure that the sale contract was void buyer in mak upon default actions and, therefore, unacknowledged because procedure ex payments ing deferred ‍‌​‌‌‌‌​‌‌‌‌‌​​‌​‌​‌​​‌​​​‌​‌​​​​‌‌​‌​​​‌‌​‌​​‌‌​‍—a no had insurable interest The re contract. pressly outlined placed upon Reliance is vehicle. our not constitute property did possession of Niehaus, 1940, decision in Allison v. the inter a rescission 342, 102 P.2d N.M. as property, both buyer in the est of and the risk have might equity he discrepancy There some record in effect under con of loss continued original whether contract of circumstances, repos such Appar- Under introduced in tract. sale was evidence. loss-payee does not avoid ently inadvertently by the counsel session copy of the contract Fageol Truck & ferred as an coverage. See event, Co., 1941, Indemnity original. contract before Pacific Co. v. Coach 661; not bear evidence 731, Kleiber it had Mo the court did been 117 P.2d 18 Cal.2d Keith, Indemnity acknowledged. The witness v. International Co. Truck tor plaintiff, 709, 865; employee origi- asserted Cal.App. P. 1930, 106 Co., in' Fe and the lien or encumbrance which nal contract filed Santa instru- acknowledged be- ment executed in the it must have been mcwmer shall back, plaintiff required not receive by did the laves this state. cause in due receive a title to the car but did copy When a the instrument filed owner, which showed course there shall be attached to or endorsed the amount of a lien on the title for with upon the instrument a certificate of contract indebtedness. notary public stating that the same is question validity true and correct copy of the original. * * *” parties brought out until after the was not (Emphasis supplied.) rested. The lower court offered to had In view of the record on this re-open the case in order counsel for point and the presumption public of opportunity might exam- defendant have ficers have properly discharged the duties whether it was ac- and see ine the contract of their office, we say cannot it was error not knowledged. did choose to Counsel for the trial court to refuse to rulе the con re-opening case. move ditional sale contract had not been properly 64-5-1, N.M.S.A., Comp., Section acknowledged. Herrera v. Zia Co., Land filing of liens and encum- regarding 51 N.M. 975; 185 P.2d Abreu v. division, with the motor vehicle brances State Tax Commission, 1924, 29 N.M. provides: 479; Atchison, P. T. & Ry. S. F. Co. contract, “(a) No conditional sale Elephant Butte Irr. Dist. of Mexico, New lease, mortgage, chattel Cir., 110 F.2d 767. lien other or encumbrance or title Point is made defendant that its lia- upon a tention instrument vehicle of a bility is avoidеd because the type required registered to be here- automobile subject insured was to a condi- under, dependent upon lien other than a tional sale contract not described in the possession, against valid as the credi- policy, under a clause therein providing acquiring an owner a lien tors of would not apply to certain cover- attachment or levy or subse- ages, including collision and upset, under purchasers quent encumbrances such circumstance. without (encumbrancers) notice until * * requirements article of this argument This is without merit in complied been have with. general view of the change endorsement deposited “(b) There shall be with agent. made defendant’s As above, seen original copy the division or a this endorsement recited the total amount creating instrument and evidencing of loss and the annotation, mediately preceding made the above payments to be of individual amount Brooks, By acceding Cir., to this Firemen’s Ins. Co. v. insured. thereon its F.2d 909: A.L.R. endorsement, defendаnt has waived “ provision of rely upon the to * * * undisputed The facts are policy asserted. that (under theory legal which we Annotation, The rule is stated assume) the equity insured owned the 65 A.L.R. as follows: redemption and thus had an insur- rule, usually accepted it is the “Since interest; able Trimby that 'held the le- insurer, the is- at time of where an conveyance gal title under a which re- policy, knowledge of suance a has given security cited it was that which, properly existing facts if which, debt, things, among a other of, the con- availed would invalidate grantor to obligated the insure the very inception, from its that tract assign to buildings and unqualified delivery policy of the con- Trimby policy security as additional to a stitutes waiver such known debt; that, Trimby though for the held * * * grounds forfeiture title, held it trust for legal he appear generally acceptable would insured, only and his beneficial or delivery clearly of a which equitable the extent of interest was to upon ground its face a for- indicates debt; company unpaid his and that feiture would constitute a waiver proceeds in consented that the case upon ground. forfeiture Accord- Trimby in- paid loss be to ‘as should ingly, although some of with- the cases may appear.’ terest the insurer Can present speak in the annotation that, say then heard to because waiver, estoppel, others of and still out be a Trimby’s interest turned others of breach of the terms title, temporary holding legal * * * result, prin- any kind of other interest instead of * * * ciple if the out- prop- might have had which he standing subject interest in the of in- erty proceeds, therefore it will not recovery surance claimed to defeat pay him to loss one else ? fairly inception of at the entirely plain that if the seems to us loss-payable clause, indicated Trimby ‘to the loss had been valid of such is not a existence security interest under extent defense.” deed,’ necessary agree- consent or inferred; company must be ment of the com- underlying rule is The reason this why reason and, so, no im- if we see report сase pellingly stated interest, ficiently evidence. established Trimby’s what- recognition of $1,095, as trial court found the value to be may be, equally effective. ever it is not National by the argument Blue Book shown not overlook the We do After payable’ Association of Dealers. the ‘loss Automobile urged us that pay deducting provisions only under the agreement $50 clause value, Turk’s de- policy, have Trimby salvage otherwise what would $200 if, insured, plain- and ferred credit the amount been to the $133 policy, it tiff’s to reсovery was determined reason of conditions insured, it $666.63, to the including expenses was invalid in favor the a sum Trimby. in favor cannot be valid in with connection in convincing enough is argument to amounting This $52.42. case, appointee is typical the the where the val The Keith testified witness nev- claiming which the insured rights the ue of the automobile was shown begs question the acquired, er but it along book, $1,065. blue Further dealer’s case; question applied for the $1,095. There he testified such value was not, company here whether the did is It point. testimony on the was no other policy, agree that the of the as of date not objected he was was at the trial that Trimby outstanding interest of the testify the value of qualified respecting validity ‍‌​‌‌‌‌​‌‌‌‌‌​​‌​‌​‌​​‌​​​‌​‌​​​​‌‌​‌​​​‌‌​‌​​‌‌​‍the affect should not it he had not seen automobile because policy, a claim if and when arose just The lower court before the accident. insured; did, and, if it favor it had short ruled that as the witness seen Trimby may well continue as then mishap, ly he had been after the and as appointee proсeeds mere financing years fifteen business some insured, nor needs and neither has ” frequently appraise called * * * they than have. better automobiles, qualified'to testify as he was rule Miller v. Phoenix Under 'the automobile. In our to the value of London, 1948, Co., Limited, of Assur. ruling correct. Further opinion, such in- P.2d we believe N.M. more, ad giving the defendant even disclosure sured’s evaluation, $1,065, the lower vantage of sufficiently put loss-payee was definite to plaintiff’s recovery still well is amount inquiry, point and the is on

the insurer value. We see no reversible under this defendant. against ruled regard. in this error Complaint is made defendant accident, agree We final with defendant’s the value the automobile before for court, the trial court point suf- that was error as found trial was not judgment lease, award Turk lease, favor of sales contract or other in- already for the sums mentioned. strument in writing having the effect Although they defendants, were named as of a mortgage or a lien or encum- there upon, was no issue them and the brance hold, between intended to company; defendant title to at no time vehicle in the former own- er, they possessor any recovery did seek grantor on shall here- after be Therefore, filed with the motor vehicle judgment insurance. is department. Except that affirmed as encumbrances and reversed as Cooper. to the defendants Turk and vehicles not titled in New Mex- ico shall be filed with county so clerk ordered. county where the vehicles are so COMPTON, J., LUJAN, C. SAD- ” encumbered.’ KIKER, JJ., LER and concur. Thus, while the lаnguage present of our Rehearing On for Motion statute predecessor, differs from its present purposes, the each force of McGHEE, Justice. Attorney Opinion same. General’s No. 3825, 1941-1942, p. 71, seq., et addressed appellant, Traders & General Commissioner, to the Motor Vehicle Company, Insurance rehear on motion for question posed: law, ing, “Under the new calls inadver our attention to the fact necessary is it (filed tently 64-5-1, have contracts with overlooked us that N.M. § the Motor S.A., Departmеnt) Vehicle acknowl- in our Comp., quoted 1953 cited and edged Notary Public?” and answered opinion case, earlier not become did this as follows: 1, 1953, July effective until time after the contract here involved was sale “The new law contains no statement assertedly filed with the Mexico Motor New security as to the form and content of Department. Therefore, Vehicle it is true opinion I devices. am of the that our application that such section had no general applies. law still Section 21- present case, but another section of our 301, Annotated, New Mexico Statutes applicable: statutes was at that time Sec Compilation, 50-11-1, (§ 68-115, 140, Comp., tion N.M.S.A. 1941 Ch. Compilation), requires security de- 10, 1941, amended, Laws as Ch. § § be acknowledged. vices In this con- repealed by Laws and Ch. § you nection I wish to advise that when (15), Laws 1953. It reads: properly such instrument is not ac- “ ‘Every mortgage, chattel knowledged, condi- it is not entitled to be filed lease, contract, purchase

tional sales your office.” opin- original although the follows ato statute filed this referred ion case thereto, material at the time

not effect harmless, the decisive

such error applicable under

principle fully statutes, disposition and

earlier opinion earlier

appeal under our

affirmed.

It is so ordered.

COMPTON, J., and C. LUJAN

SADLER, JJ., concur. participating.

KIKER, J., not

285 P.2d R. Warren R. GRAHAM

Warren d/b/a Plaintiff-Appellant, Agency,

Graham MIERA, Roberts, Ex W. and A. J. S.

M. F. appoint duly Individually

ter, as the acting

ed, qualified Members Security

Employment Commission Mexico, Defendants-Appel New

State of

lees.

No. 5935.

Supreme Court of New Mexico. 15,

June July 21,

Rehearing Denied

Case Details

Case Name: Fulwiler v. Traders & General Insurance Company

Court Name: New Mexico Supreme Court

Date Published: May 6, 1955

Citation: 285 P.2d 140

Docket Number: 5906

Court Abbreviation: N.M.