Case Name: MARK COFFIN, Surviving Partner of the Copartnership of COFFIN & BEGLAN, Appellants, v. NORTHWESTERN MUTUAL FIRE ASSOCIATION, a Corporation, Respondent
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1926-07-27
Citations: 43 Idaho 1
Docket Number: 
Parties: MARK COFFIN, Surviving Partner of the Copartnership of COFFIN & BEGLAN, Appellants, v. NORTHWESTERN MUTUAL FIRE ASSOCIATION, a Corporation, Respondent.
Judges: Wm. E. Lee, Givens and Taylor, JJ., concur.
Reporter: Idaho Reports
Volume: 43
Pages: 1–15

Head Matter:
(July 27, 1926.)
MARK COFFIN, Surviving Partner of the Copartnership of COFFIN & BEGLAN, Appellants, v. NORTHWESTERN MUTUAL FIRE ASSOCIATION, a Corporation, Respondent.
[249 Pac. 89.]
John Jackson and Reddoch & Hunter, for Appellants.
E. C. Boom, for Respondent.

Opinion:
BAUM, Commissioner.
The appellants in 1921 sold to Harry F. Matthews, an automobile, for $1,810, receiving $850 in cash and a conditional sales contract, or title note, reserving title in the seller until all payments were made. The balance, as evidenced by the note, was payable on or before September 6, 1922, in instalments of $75 per month. The contract among other things provided as follows:
"That should the maker . . . hereof fail to make any of the payments specified herein when due, or sell or agree to sell or dispose of said property or any interest therein . without the written consent of said payees, payees may at their option declare this note immediately due and payable and may take possession....."
The last payment made by Matthews to apply on the purchase price was on March 14, 1922, and although Matthews was in default, the appellants did not declare a forfeiture of his interest, nor did they take any other affirmative action by reason of default in payments. _
On March 28, 1922, Elma Matthews sued her husband for divorce, alleging extreme cruelty, and praying for a decree awarding to her all the community property, which included the automobile.
On October 3, 1922, the respondent, Northwestern Mutual Fire Association, issued to Harry F. Matthews, a policy insuring him from loss against fire, transportation, theft and lightning, for a year commencing September 28, 1922, in the sum of $1,000 on the car aforesaid. Attached to the policy was the following clause:
"Subject to all the terms and conditions of this policy, loss if any payable to Coffin & Beglan, of Boise, Idaho, as their interest may appear, otherwise to the insured.
Shortly after the issuance of the policy and on October 30, 1922, Matthews not having appeared in the divorce proceedings, his default was entered, and findings of fact, conclusions of law and judgment, were made and entered, wherein and whereby there was awarded and set over to Elma Matthews, as her sole and separate property the car aforesaid, and other property. No notice of the divorce or change of interest was at any time given to the insurance company.
On January 17, 1923, at Boise, the car was stolen.
Thereafter, and on June 12, 1923, the appellants brought this suit against the insurance company to collect the loss under said policy, Matthews having assigned to appellants whatever interest he had thereunder.
The insurance company answered, admitting purchase of the car by Matthews, retention of title by appellants, issuance of the policy, and proof of loss, but alleged that it had no notice of the divorce, or of any change of interest prior to the loss. The answer set out a provision of the policy, that it should be void:
" . in case of transfer or termination of any interest of the insured other than by the death of an insured, or any change in the nature of the insurable interest of the insured in the property described herein, either by sale or otherwise."
Further, that by reason of the divorce decree, the interest of the insured in and to the property had terminated, without the knowledge or consent of the insurance company, and that at the time of the theft, insured had no interest in the property, and that at the time of the loss Elma Matthews had no contractual relations with the insurance company.
Appellants demurred generally to said affirmative defense, and said demurrer was by the court denied and overruled.
On November 15, 1923, the case came on for trial before the court and a jury. After plaintiffs had proved the material averments of their complaint and rested, the defendant introduced in evidence the judgment-roll in the divorce case. Both sides having rested defendant moved for an instructed verdict which was granted by the court, and judgment for the defendant was thereafter on November 16, 1923, made, entered and filed, from which judgment and an order allowing costs in favor of respondent, the appellants appeal.
Appellants maintain that under the statutes of this state the community of husband and wife is a legal entity, separate and distinct from the separate estate of the respective spouses; that title must vest in the community created by the marriage before the court acquires jurisdiction, upon a dissolution of the marriage, to award or decree community property; that no jurisdiction vested in the district court entering the decree dissolving the marriage between Matthews and his wife to award the automobile to Elma Matthews for the reason that the community of Matthews and wife acquired no title or interest, and therefore nothing to decree.
A vendee under a conditional sales contract acquires not only the right of possession and use, but the right to become the absolute owner upon complying with the terms of the contract; these are rights of which no act of the vendor can divest him. If a vendor of property conditionally sold, wrongfully takes possession of the property the purchaser may recover the value thereof less the amount due.
The essential incidents of property are transferred to the vendee, along with possession and right of use of the property, as if the property were his own, and all that remains is the debt, and the title to the property as security.
Risk of loss should properly fall upon the party who has the beneficial incidents of title. The weight of authority is to the effect that if there is a loss or destruction of the property, while in the possession of the vendee, the loss is the buyer's and not the seller's. The amount remaining unpaid under the conditional sale contract is still due the seller.
A seller does not simply contract that the buyer shall have possession, but he actually delivers possession, and such possession is delivered, not to hold the goods for the seller, but to use it as the buyer's own, and if the purchaser defaults, the seller may retake the property in the manner specified in the contract or elect to treat the sale as an absolute one, and sue for the remaining amount due of the purchase price.
The buyer acquires more than a contract right, namely a property right.
A creditor of the conditional vendee may attach the interest of the buyer, pay the portion of the price remaining due and by doing so acquire the right to treat the full ownership as belonging to the buyer. Of course, the buyer must not be in default. The creditor succeeds only to the buyer's rights.
The following authorities are cited in support of the foregoing statements: 1 Williston on Sales, 2d ed., p. 754, sec. 326; Leaf v. Reynolds, 34 Ida. 643, 203 Pac. 458; Pease v. Teller Corporation, Ltd., 22 Ida. 807, 128 Pac. 981; Jones on Chattel Mortgages, sec. 11 et seq.; Dame v. C. H. Hanson & Co., 212 Mass. 124, Ann. Cas. 1913C, 329, 98 N. E. 589, 40 L. R. A., N. S., 873; Hollenberg Music Co. v. Barron, 100 Ark. 403, Ann. Cas. 1913C, 659, 140 S. W. 582, 36 L. R. A., N. S., 594; Chicago Equipment Co. v. Merchants Bank, 136 U. S. 268, 283, 10 Sup. Ct. 999, 34 L. ed. 349; Harley & Willis v. Stanley, 25 Okl. 89, 138 Am. St. 900, 105 Pac. 188; Hervey v. Dimond, 67 N. H. 342, 68 Am. St. 673, 39 Atl. 331; Arthur McArthur Co. v. Beals, 243 Mass. 449, 137 N. E. 697.
The appellants had not declared a forfeiture of the buyer's rights. It necessarily follows that the community of Matthews and wife had more than a contract right, namely; a property right, a substantial and beneficial right, and the court entering the divorce decree had jurisdiction to award the property to the wife.
The decree dissolving the marriage between Harry F. Matthews and Elma Matthews, and awarding the property to the latter is not aptly worded, as it awards to the prevailing party "One Hupmobile automobile 1921....." Certainty would have been added to the decree if the use and possession and the right to pay the amount remaining due under the conditional sales contract had been granted to Elma Matthews, subject of course, to the further provision, that such order was made without prejudice to the rights of the contract holder. The words used are quite broad and comprehensive and being so, as between the parties themselves, would include whatever interest Matthews had, even though less than actual title.
Appellants were mere appointees under the policy and their right is measured by the rights of Matthews. Matthews' interest was transferred to his wife; his right was extinguished; hence, as assignees of Matthews, appellants cannot recover. (Hill v. International Indemnity Co., 116 Kan. 109, 38 A. L. R. 362, 225 Pac. 1056 (and cases therein cited); Phoenix Insurance Co. v. American Trust and Savings Bank (Tex. Civ. App.), 248 S. W. 819; Woods v. Insurance Co. of the State of Penn., 82 Wash. 563, 144 Pac. 650; Burns v. Alliance Co-operative Insurance Co., 103 Kan. 803, 176 Pac. 985.)
The remaining question is: Was the change of ownership such as to avoid the terms of the policy? The great weight of authority is to the effect that such a change as was had in the instant case was sufficient. (First National Bank of Elk City v. Springfield Fire & Marine Insurance Co., 104 Kan. 278, 178 Pac. 413; Melcher v. Insurance Co. of Penn., 97 Me. 512, 55 Atl. 411; Farmers & Merchants Ins. Co. v. Jensen, 56 Neb. 284, 76 N. W. 577, 44 L. R. A. 861; Id., 58 Neb. 522, 78 N. W. 1054, 44 L. R. A. 861.)
The last assignment deals with costs allowed the respondent. The showing made by respondent was sufficient to come within the rule announced by the court in the case of Griffith v. Montandon, 4 Ida. 75, 35 Pac. 704.
I recommend that the judgment be affirmed.
Wm. E. Lee, Givens and Taylor, JJ., concur.
PER CURIAM. — The foregoing is hereby adopted as the opinion of the court. The judgment is affirmed. Costs are awarded to respondent.
Petition for rehearing denied.