In Hanover Fire Ins. Co. of New York v. J.H. Scroggs, 92 Ga. App. 548, 88 S.E.2d 703, the plaintiff, an automobile dealer, had a sales manager in charge of the selling of cars.Summary of this case from Baxter Motors v. Iowa Hardware Mut. Ins. Co.
DECIDED JULY 12, 1955. REHEARING DENIED JULY 25, 1955.
Action on insurance policy. Before Judge Blackshear. Hall City Court. April 1, 1955.
Wheeler, Robinson Thurmond, A. C. Wheeler, R. F. Schuder, for plaintiff in error.
Stow Andrews, Robert E. Stow, contra.
1. Although it was held in Hanover Fire Ins. Co. v. Scroggs, 90 Ga. App. 539 ( 83 S.E.2d 295) when this case was before this court for a decision on the judgment of the trial court overruling the general demurrer to the petition, that a cause of action was stated, this decision did not preclude the defendant from establishing as a defense that the circumstances of the taking came within an exclusion clause of the policy of insurance upon which the action was based and copy of which was attached to the petition, the allegations of the petition not disclosing these facts.
2. Under the exclusion clause of the policy that it "does not apply to loss resulting from either the insured voluntarily parting with title and possession of any automobile if induced so to do by any fraudulent scheme, trick, device, false pretense, or from embezzlement, conversion, secretion, theft, larceny, robbery or pilferage committed by any person including any employee, entrusted by the insured with either custody or possession of the automobile," the defendant was entitled to set up as a defense that the loss to the insured resulted from larceny by a person entrusted by the insured through his agent with the custody of the automobile.
3. Under the undisputed evidence as disclosed by the record and as interpreted by counsel for both sides in their briefs, the insured left his place of business in Gainesville in charge of an employee who placed an automobile in the custody of a thief in order for him to try it out, he having represented himself as a prospective purchaser, and the automobile was stolen in this manner. The evidence therefore demanded a finding that this loss came within one of the exclusion provisions of the policy.
DECIDED JULY 12, 1955 — REHEARING DENIED JULY 25, 1955.
J. H. Scroggs filed an action in the City Court of Hall County against Hanover Fire Insurance Company of New York, alleging that the defendant had issued to the plaintiff its standard automobile policy insuring the plaintiff against theft of automobiles, that his 1947 Studebaker club coupe was stolen, and that the defendant, although liable for the value of the same under the terms of its policy, attached to the petition, in bad faith refused to pay. The pleadings are set out in detail in Hanover Fire Ins. Co. v. Scroggs, 90 Ga. App. 539 ( 83 S.E.2d 295), wherein it was held that the trial court properly overruled the general demurrers to the petition. The second count of the petition, seeking to recover under a collision provision of the policy, is immaterial here, as the case went to trial and the jury returned a verdict in favor of the plaintiff under the first count on the theory of theft, and assessed a penalty for bad faith.
Prior to verdict the defendant moved for a directed verdict, which was overruled, and thereafter moved for a judgment notwithstanding the verdict. It filed its motion for a new trial on the general grounds and later amended by the addition of several special grounds. The judgments of the court denying the motion for judgment notwithstanding verdict and the motion for a new trial are here assigned as error.
1. In an action on an insurance policy, the proof that the car was stolen makes out a prima facie case for recovery under policy provisions insuring against theft ( Staten v. General Exchange Ins. Corp. of New York, 38 Ga. App. 415, 144 S.E. 53), and the burden of proving that the defendant is not liable because the loss falls within the terms of an exclusion clause is upon the defendant. North British c. Ins. Co. v. Mercer, 90 Ga. App. 143 ( 82 S.E.2d 41). Accordingly, the fact that the petition (which alleged the policy, the theft, and that the theft came within the terms of the policy, but which did not set out evidentiary matter as to how the theft occurred) stated a cause of action, does not establish the law of the case in such manner as to preclude the defendant from establishing as a defense that the circumstances of the taking did in fact place it within the terms of an exclusion clause.
2. The policy of insurance contained the following provision: "7. Exclusions. The policy does not apply. . . (d) Under any coverage — to loss resulting from either the insured voluntarily parting with title and possession of any automobile if induced so to do by any fraudulent scheme, trick, device, false pretense, or from embezzlement, conversion, secretion, theft, larceny, robbery or pilferage committed by any person including any employee, entrusted by the insured with either custody or possession of the automobile." While clauses in insurance contracts, where doubtful or ambiguous, should be construed most strongly against the insurer ( Penn Mutual Life Ins. Co. v. Childs, 65 Ga. App. 468, 16 S.E.2d 103; Mayes v. Washington National Ins. Co., 77 Ga. App. 638, 49 S.E.2d 123), nevertheless unambiguous provisions should be given their plain and reasonable intendment. Aetna Life Ins. Co. v. Padgett, 49 Ga. App. 666, 669 ( 176 S.E. 702); Wheeler v. Fidelity Cas. Co., 129 Ga. 237, 240 ( 58 S.E. 709). There is no ambiguity in the above quoted clause, and the contention that the words "voluntarily parting with both title and possession of any automobile" are applicable to that part of the provision which begins "or from embezzlement, conversion," etc., is not tenable, not only because the words "or from" separate the two parts of the sentence in the disjunctive, but also because to so interpret it would render the last part absolutely meaningless. One does not part with title as the result of conversion, theft, larceny, robbery, and so on. Briscoe v. Pool, 50 Ga. App. 147 ( 177 S.E. 346).
Accordingly, the defendant insurance company here might defend by showing that the loss resulted from conversion by a person entrusted with custody of the automobile, and would not have to show further that the plaintiff had parted with his title.
3. Upon the trial of the case, the undisputed evidence was to the effect that the plaintiff, an automobile dealer trading under the name of Gate City Motor Company, went to another city and left a salesman at his place of business to manage it for him until his return; that such manager attempted to sell the automobile in question to a person whom he supposed to be a prospective purchaser and permitted such person to drive it away from the premises, thinking he was trying it out; and that the car was never returned and was found some time later in New York so damaged by collision as to be completely worthless. Such evidence is amply sufficient to authorize the finding of an intent to steal on the part of the person going off with the vehicle. Martin v. State, 123 Ga. 478 ( 51 S.E. 334); C. L. Fain Co. v. Baltimore American Ins. Co., 81 Ga. App. 105 ( 57 S.E.2d 879). Under these conditions, the plaintiff did not part with possession of the automobile, but he did part with its custody. See McConnell v. Fireman's Fund Ins. Co. of San Francisco, 178 F.2d 76; Tripp v. U.S. Fire Ins. Co. of New York, 141 Kan. 897 ( 44 P.2d 236). By allowing the driver to leave the lot with the car for the purpose, as he supposed, of trying it out, he entrusted him with the custody of the vehicle for this purpose. Accordingly, the facts of the case fall squarely within the exclusion clause to the effect that the loss is one excluded from the terms of the policy as being a conversion by a person entrusted with the custody of the vehicle.
The trial court erred in denying the motion for judgment notwithstanding the verdict. In view of this ruling, it is not necessary to consider the remaining assignments of error.
Judgment reversed with direction that the trial court enter judgment for the defendant in accordance with what is herein held. Gardner, P. J., and Carlisle, J., concur.