Court Opinion

ID: 9791553
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:13:38.689236+00
Date Added: 2024-06-11T07:37:36.870613
License: Public Domain

McFADDEN, Justice
(dissenting).
In my opinion the judgment of the trial court should be affirmed for the reasons set forth below.
The majority opinion as written seeks the best of all possible worlds for the appellant here. That opinion first states that the contract must be interpreted as written, then holds that an ambiguous contract must be construed most strongly against the person preparing it, and by claiming an ambiguity in the policy, then arriving at the conclusion that the loss involved here was covered by the policy.
In its approach to the problem, the majority opinion quoted at length from the second page of the policy which sets forth the insuring agreements but failed to mention the first page of the policy which contains the declarations by the insured which declarations are made a part of the policy by express terms. Contracts of insurance must be read and considered as a whole, and the meaning and intention of the parties determined therefrom. Watkins v. Federal Life Ins. Co., 54 Idaho 174, 29 P.2d 1007 (1934). In Parma Seed, Inc. v. General Ins. Co. of America, 94 Idaho 658, 662, 496 P.2d 281, 285 (1972), this court stated:
“To ascertain that intent [the intent of the parties to the insurance policy], it is well settled that this Court must look first to the contract itself, construing the document as a whole.”
Contracts of insurance should be considered in view of their general objects rather than on the basis of the strict technical interpretation. Maryland Cas. Co. v. Boise Street Car Co., 52 Idaho 133, 11 P.2d 1090 (1932); Rollefson v. Lutheran Brotherhood, 64 Idaho 331, 132 P.2d 758 (1942).
In my opinion, examination of the declarations of the insured contained in the policy,1 five in number, when considered in connection with the remainder of the policy require an affirmance of the district court judgment. In summary these declarations state: Item 1, that appellant is the insured; Item 2, the purchaser of the automobile is Ted Jockumsen, Jr., and the policy period is for one year, August 21, 1969 to August 21, 1970; Item 3, the premium of $145.00 is computed at $15.00 for coverage for fire, lightning and transportation and theft, and $130.00 for coverage for collision or upset; Item 4, the automobile is described as a 1969 Chevrolet Camaro Sport Coupe, on which there remains an unpaid balance of $4,152.75, payable in 36 monthly installments. The insured warrants :
“That the motor vehicle described above was delivered to a bona fide retail purchaser under a legally enforceable conditional sale contract, chattel mortgage or lien. The unpaid balance of the contract, mortgage, or lien is as shown herein.”
Finally,
“Item 5. The purposes for which the motor vehicle is to be used are business and pleasure unless otherwise stated herein. There are no payments on this account more than 30 days past due.”
On this first page of the contract is set out a table for the pro-rata cancellation of this policy.
The purpose for a Vendors Single Interest Policy has been expressed as follows:
“SINGLE INTEREST COVERAGES
Dealers, Finance Companies and Loan Companies
“The general practice of automobile dealers and finance companies, in financing the purchase of an automobile, is to require that the borrower supply *253Fire and Theft or Comprehensive coverage plus Collision. However, when older automobiles are purchased, or when older autos are pledged as security for small loans, the requirement that the borrower supply Collision insurance is often waived as impractical because of the sparse market for coverage on such cars.
«* * *
“Conversion and Single Interest Collision insurance are available to protect automobile dealers and finance companies against these losses. These coverages insure only the interest of the dealer or finance company, never that of the purchaser of the automobile.
Coverage
“Single Interest Collision insurance (which is often written where the purchaser is not required to carry Collision insurance) covers the interest of the insured finance company or dealer against loss due to collision. There is no protection for the owner of the car. Following the accident, if the owner repairs the car and continues to make his payments, there is no claim under Single Interest Collision coverage. But if, following collision damage, he ceases to make payments and the value of the repossessed property is insufficient to pay the balance owed upon it, then the insurance company must make good the loss to the insured (dealer or finance company) due to collision. * * *.” Fire, Casualty and Surety Bulletins of the Nat’l Underwriters Service (Cs-1) (12th printing, July 1967).
In Connecticut Bank and Trust Co. v. Zering, 2 Conn.Cir. 333, 199 A.2d 18, 19, (1963), that court pointed out:
“A contract of insurance covering single interest damage hazards, while similar to an automobile physical damage policy containing comprehensive or fire and collision coverage, differs in that it covers only the lender’s interest after damage and default.”
Property and Liability Insurance, Magee and Serbein, 4th ed., 1967, a text on insurance, in Chapter 19, discusses automobile insurance contracts. Therein it is stated at page 479:
“For the purposes of insurance, automobiles are classed as (1) private passenger, (2) commercial, (3) public, (4) garage, and (5) miscellaneous.
“Private passenger automobiles include motor vehicles of the private passenger type, unaltered, and station wagons and jeeps used for pleasure or business purposes. In this category are included motor vehicles of the private passenger type even though altered by the attachment of a small box and used to transport tools or materials or to carry samples but not used for wholesale or retail delivery. Regardless of the type of the car, motor vehicles used for renting, livery work, or carrying passengers for compensation do not fall in the private passenger category, nor do motor vehicles owned and held for sale or used for demonstrating purposes by a dealer or manufacturer.” (Emphasis added.)
In discussing the various types of policies available, the authors discuss “Single Interest Collision and Conversion Insurance,” “Single Interest Fire and Theft,” and “Dealers’ Damage Insurance,” which in my opinion points out the fallacy of the reasoning of the majority opinion in arriving at the conclusion the judgment here should be reversed. The authors state:
“Single Interest Collision and Conversion Insurance. This is a form of insurance made available to dealers and finance companies to protect them against loss occasioned by the hazards incident to financed automobiles. Not all cars carry comprehensive or collision insurance, and a financed car seriously damaged by collision might deplete the security of the finance company and might possibly result in a situation in which collection of the amount due is impossible.
*254“Single interest collision insurance protects the interest of the insured finance company or automobile dealer only. In the event of an accident, the owner of the automobile is expected to make the necessary repairs, and if he does this, there is no liability on the part of the insurer writing the single interest collision insurance. If, following a collision damage to a financed car, the purchaser of the car fails to make necessary repairs and discontinues making his payments under the terms of the sales contract, the insurer is obligated to repair the collision damage or make good to the insured the loss occasioned by the collision.” [Id. p. 503.]
t( * * if;
“Single Interest Fire and Theft. While it is usual in connection with the financing of the purchase of automobiles for the party providing the funds to require the purchaser of the car to insure it for fire and theft and have the contract endorsed to cover the interest of the mortgagee, there are, nevertheless, situations in which a single interest fire and theft contract meets a need. Automobile dealers and finance companies in the chattel loan business that advance money with automobiles as security frequently find the single interest fire and theft contract advantageous. The contract provides a cover similar to that afforded by the single interest collision contract but limited to the risks of fire and theft, * * *.
“Dealers’ Direct Damage Insurance. Direct damage insurance for automobile dealers is written under several forms each adapted to meet a particular need.
“The various contracts cover automobiles owned by the dealer and held for sale or used in repair service. The insurance does not extend to automobiles sold under a conditional sale, mortgage, or other similar agreement.” Id. p. 504.
This policy was purchased for the purpose of protecting the appellant in its security interest in the car while it was in the possession of and being used by the purchaser Ted Jockumsen, Jr. As long as the contract was being complied with by the purchaser, and payments being made, whether the vehicle was stolen or damaged, the insurance company would not be liable if the payments under the purchase contract were being made. No liability attached to the respondent insurance company until there had been damage to the vehicle or theft2 of it, and then only if the conditions precedent to liability as contained in the policy are met, i. e., the purchaser is in default and the appellant has repossessed the vehicle.
The policy imposes a duty on the insured in case of damage in the following terms:
“When the insured shall be advised of damage to the automobile insured hereunder which may result in an impairment of his interest therein, the insured shall, as soon as practicable, give notice of such occurrence to the Company or its authorized agent. The insured shall protect the automobile whether or not the loss is covered by this policy and any further loss due to the failure of the insured to protect shall not be recoverable under this policy.” (Emphasis added.)
The foregoing provision indicates that only when a loss is sustained while the vehicle is in possession of the purchaser is there policy coverage. Otherwise why does it require that the insured first be advised of damage before giving notice to the company ? In addition, after the insured receives possession of the vehicle, failure to protect the vehicle from “any further loss” is not covered by the policy.
While the vehicle was still in the possession of the car buyer the appellant was se*255cured in the amount of the balance due under the installment contract by the value of the vehicle. But, after default and repossession, the appellant’s status insofar as its security interest is concerned, was completely changed. Having possession of the very subject of the contract, appellant no longer was relying upon its lien, but was relying upon the vehicle itself for its security.
The duty imposed upon the appellant to “protect the automobile whether or not the loss is covered by this policy” contemplates coverage under the policy only for loss or damage while it is in the possession of the purchaser, and imposes on appellant the duty to protect the vehicle after the loss has been incurred and appellant has repossessed it.
It is my opinion the trial court was correct in its conclusion:
“That the insuring agreement * * * provides coverage only for a loss occurring while the insured vehicle is in the prior possession or control of the retail purchaser and prior to repossession of said vehicle by the named insured.”

. This policy is entitled “Vendors Single Interest Policy” and contains in bold face type the admonition “we direct your attention to the fact that coverage under this policy proteets the interest of the lienholder only and does not protect the interest on equity of the purchaser.”

. Little credence is given the argument that the vehicle could not be repossessed if stolen from the purchaser and hence there would be no insurance coverage. Demand for delivery of the vehicle would have sufficed to establish the rights as between the parties, for the law does not require the doing of an useless act.