Before DUFFY, LINDLEY and SWAIM, Circuit Judges.
The principal question presented by this appeal involves the ownership of an automobile which, while being driven by Hjalmer Olson, and employee of M & J Auto Parts Company, was involved in an accident in which the plaintiff, Hofslund, was injured. The action was brought against the defendant, Metropolitan Casualty Insurance Company of New York, which was carrying a policy of garage liability insurance on M & J.
The policy under "Definition of Operations" provided as follows:
"Division 1. Automobile Dealer or Repair Shop. The ownership, maintenance, occupation or use of the premises herein designated, including the public ways immediately adjoining, for the purpose of an automobile dealer or repair shop, and all operations either on the premises or elsewhere which are necessary and incidental thereto, including repairs of automobiles or their parts, and ordinary repairs of buildings on the premises and the mechanical equipment thereof; and the ownership, maintenance or use of any automobile for any purpose in connection with the above defined operations, and also for pleasure use."
Under "Exclusions" the policy provided: "This Policy does not apply: * * * (b) under division 1 of the Definition of Operations, to the ownership, maintenance or use for pleasure purposes of any automobile not owned by or in charge of the named insured for use principally in such operations."
The plaintiff admits that there is no liability against the defendant insurance company if, at the time of the accident, the ownership of the automobile had passed from M & J to Olson.
Raymond J. Polzer, the secretary-treasurer and manager of M & J testified that the automobile in question had been taken in trade on another automobile which M & J sold to one Lawrence Tritten. At that time Tritten endorsed the certificate of title in blank and delivered it and the automobile to M & J, which thereupon placed the automobile on their used car lot. M & J, as a dealer, was not required by Wisconsin statutes to apply for a new certificate of title.
About two weeks later Olson talked to Polzer about buying the automobile and was then told by Polzer that the price was $75.00, payable one-third down and the balance $10.00 per week. Olson agreed to these terms, after trying the car out, and on April 22, 1949, Olson finished paying the required down payment of $25.00 and was given the keys to the automobile and told that he could have the car. The keys to the automobiles owned by M & J were kept on a key board in their office.Polzer then also offered the certificate of title to Olson, but Olson asked Polzer to hold the certificate of title for the time being, because he, Olson, had no place to keep it. Polzer also consented to Olson's use of M & J license plates on April 22 so that Olson could go over to Elderon and get some old license plates of his own. After April 22, Olson drove this automobile home nights and used it as he desired. Part of the time while he was at work he parked it on the M & J used car lot. After April 22 M & J neither had the keys to this car, used the car, nor exercised any control over it. M & J did not secure itself by taking back a mortgage or conditional sales agreement. It sold the automobile to Olson on an open account.
On May 7, when the accident happened, Olson was on a pleasure trip and was not in the course of his employment or acting as an agent for M & J.
On the date of the accident Olson owed an unpaid balance of only $6.00 on the automobile. After the accident he sold the automobile for junk to a wrecker and, at Olson's request, Polzer then delivered the blank certificate of title to the wrecker.
Olson testified to these same facts and no witness disputed them.
At the conclusion of the taking of evidence the trial court announced that the court found as a mater of law that at the time of the accident the automobile still belonged to M & J because there had been no compliance with the Wisconsin automobile registration statute which requires "that the certificate of title must be sent to the Motor Vehicle Department at Madison and a transfer made there, upon the payment of the fee." The court therefore refused to submit the question of ownership to the jury.
We think the trial court erred in so deciding as a matter of law that there had been no transfer of the ownership of this automobile. We are of the opinion that this ruling is contrary to both the applicable Wisconsin ...