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Mullen v. Farm Bureau of La Salle County

APRIL 17, 1959.




Appeal from the Circuit Court of La Salle county; the Hon. LEONARD HOFFMAN, Judge, presiding. Affirmed.


This suit was instituted by the plaintiff to recover the value of a new 1953 Pontiac automobile, which had been purchased by plaintiff from the defendant, Sutton Motors, and destroyed by fire while being driven to plaintiff's home by an employee of defendant, Sutton Motors. The defendant, Sutton Motors, was the dealer who had sold the automobile to the plaintiff, and the defendant, Country Mutual Casualty Company, was the insurer of a Plymouth automobile already owned by the plaintiff. This case was heard by a jury who returned a verdict of not guilty as to Sutton Motors, but as against defendant, Country Mutual Casualty Company, found the issues in favor of the plaintiff and assessed plaintiff's damages at the sum of Two Thousand Five Hundred Sixty Five Dollars and Thirty Cents ($2,565.30). Judgments were entered upon the verdicts.

This case comes to us on appeal by Country Mutual Casualty Company, hereinafter referred to as the defendant, from the judgment against it. Plaintiff has not appealed from the judgment entered on the verdict finding defendant, Sutton Motors, not guilty. Subsequent to the entry of the judgment, plaintiff filed a motion for an allowance of attorney fees, which motion was denied by the trial court and the plaintiff has taken a cross-appeal from such denial.

The plaintiff's Plymouth automobile was insured against loss by fire under a policy of insurance written by the defendant, Country Mutual Casualty Company. One of the principal points for determination by this court is the interpretation of a clause in the policy of insurance which is commonly referred to as the "automatic insurance clause."

The automatic insurance clause in standard liability policies is intended to meet the necessity for maintaining coverage, in the situation resulting from the recognized custom among insured owners of acquiring other cars by replacement and new purchases during the life of their policies. This clause in defendant's policy provided the following:

"Temporary insurance on newly-purchased vehicle:

"If the motor vehicle described herein is disposed of and another acquired in its place by the named insured, this policy shall without notice transfer to the newly-purchased motor vehicle for a period of thirty (30) days from date of delivery thereof, but this clause shall not extend or affect the expiration provisions of this policy."

On Saturday, January 9, 1953, plaintiff was contacted at his home near Ransom, Illinois, by Donald Brust, a salesman for Sutton Motors, a dealer for Pontiac automobiles, at which time Brust attempted unsuccessfully to sell a new 1953 Pontiac to the plaintiff. Sutton Motors is located at Streator, Illinois, some twelve miles from Ransom. The next day, Sunday, January 10th, Brust again drove to the home of the plaintiff in the new Pontiac automobile and at that time an agreement was reached whereby plaintiff would trade his Plymouth to Sutton Motors for the new Pontiac and pay them a specified sum of money. It was agreed that the Pontiac was to be undercoated by the dealer and further agreed that Brust would take the new Pontiac back to Sutton Motors at Streator, have it undercoated and that the plaintiff was to call at the dealer's place of business the next day.

On Monday, January 11th, the plaintiff drove his truck to Sutton Motors, at which time he delivered to Sutton Motors a check for the balance of the purchase price of the Pontiac and the fee for transferring its certificate of title and license. The plaintiff transferred the title to the Plymouth to Sutton Motors and received a receipted invoice for the new Pontiac. It was agreed that plaintiff would return home in his truck and that later in the day Brust would drive the new Pontiac to the home of the plaintiff and pick up the Plymouth. Later that day, while Brust was driving the Pontiac automobile to the home of the plaintiff, it caught fire from an undetermined internal origin and was completely destroyed.

Defendant contends that at the time of the fire the title to the Pontiac had not passed from Sutton Motors to the plaintiff or in the alternative, that there had not been a sufficient delivery from Sutton Motors to the plaintiff within the meaning of the automatic insurance clause. Defendant further contends that the trial court committed error in refusing to give to the jury defendant's instructions numbered 3, 5 and 6 and in refusing to submit to the jury defendant's special interrogatory No. 2.

[1-3] There can be no dispute and in fact both parties agree that there was a binding and valid contract to purchase and sell the Pontiac respectively upon the part of the plaintiff and Sutton Motors. We cannot agree with defendant's contention that the title of the Pontiac had not passed from the dealer to the plaintiff. The time of passing of title of an automobile sold is a question of the intention of the parties, 7 Blashfield Cyc. of Automobile Law & Practice, sec. 433, and in regard to the sale of personal property the title is transferred from the seller to the buyer at such time as the parties to the contract intend it to be transferred, Uniform Sales Act, Ill. Rev. Stat., Chap. 121 1/2, Par. 18. Actual manual or physical change of possession is not necessarily essential for the purpose of passing title. Leopold v. Universal Credit Corp., 290 Ill. App. 305, 8 N.E.2d 727. After all of the transactions were completed at the Sutton Motors on Monday, January 11th, it seems quite apparent that it was the mutual intent of the parties that the title to the Plymouth automobile was transferred to Sutton Motors and the title to the new Pontiac automobile transferred to the plaintiff.

For the automatic insurance clause to be in effect, three events must occur: 1. The motor vehicle described in the policy must be disposed of. 2. Another motor vehicle acquired in its place and, 3. Delivery of the newly-purchased motor vehicle. For the reasons heretofore stated, it is our opinion that the first two requirements have certainly been met. The crucial determination is whether or not there has been a "delivery" within the meaning of the policy. In view of the express provisions of the automatic insurance clause that coverage of the new automobile commences on the date of its delivery, it is evident that such delivery is an essential prerequisite to coverage.

Counsel for plaintiff and defendant have not cited any Illinois cases interpreting the word delivery within the meaning of the automatic insurance clause and our own independent research has failed to reveal any. The word delivery, which appears numerous times in automatic insurance clauses and which is of considerable importance in the construction of such clauses has, however, been the subject of judicial construction in several instances in sister states. Dean v. Niagara Fire Ins. Co., 24 Cal.App.2d 762, 68 P.2d 1021; Maryland Casualty Co. v. Toney, 178 Va. 196, 16 S.E.2d 340; Thompson v. State Automobile Mut. Ins. Co., 122 W. Va. 551, 11 S.E.2d 849; Blixt v. Home Mut. Ins. Co., 145 Neb. 717, 18 N.W.2d 78; Auto Lease Company v. Central Mutual Ins. Co., 7 Utah 2d 336, 225 P.2d 264. Also see, 34 A.L.R.2d 941.

In the Dean case, supra, the court held that under an automobile indemnity policy insuring against liability of the owner occurring by reason of ownership of any automobile acquired by insured as replacement of automobile described in policy, as of date of delivery of replacement, evidence that insured was driving replacement automobile not yet registered in his name, but so registered subsequent to accident, was sufficient to support finding that the automobile was delivered to insured within contemplation of policy, notwithstanding statutory provision that no delivery should be ...

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