Court Opinion

ID: 9762199
Source: CourtListenerOpinion
Date Created: 2023-08-29 02:15:42.160945+00
Date Added: 2024-06-11T07:29:31.817282
License: Public Domain

SEILER, Judge
(dissenting).
I respectfully dissent from that part of the principal opinion holding that inasmuch as there was no acknowledgment or date on the used car dealer’s transfer of title, White, the purchaser, did not get title to the Ford pickup truck, which his per-mittee, Hisaw, was driving at the time of the accident, and hence there was no coverage under White’s MFA policy under its “Automatic Insurance for Newly Acquired Automobiles” provisions because White did *403not acquire “ownership”. I would hold that MFA has the primary coverage here.1
The MFA policy provided: “The insurance afforded by this policy with respect to the described automobile applies to any other automobile of which the named insured or spouse acquires ownership if it replaces the described automobile . . .”
The key words are “acquires ownership”. What is meant by these words where the named insured trades his car, but the title papers on the replacement car are defective, and then the named insured, or his per-mittee, has an accident?
The principal opinion proceeds:
1. The sale was fraudulent and void, passing no title whatever, citing numerous Missouri decisions applying Sec. 301.210. However, I submit it can fairly be said none of these involved the question presented by this case.
2. In order for Hisaw to be covered by MFA, the car he was driving must he one of which White, the MFA insured, “acquires ownership”.
3. White must own the replacement vehicle.
4. “Ownership” as used in the insurance policy means what is necessary to establish ownership under Sec. 301.210, supra. In support of this final and essential proposition, the principal opinion cites two cases, one from Ohio and one from New Jersey. The two cases, Garlick v. McFarland, 159 Ohio St. 539, 113 N.E.2d 92, and Velkers v. Glens Falls Insurance Co., 93 N.J.Super. 501, 226 A.2d 448, hold, in a liability insurance coverage situation, that where there is an attempted sale of a used automobile but title papers are incomplete, legal title will not be considered as having passed, by virtue of the statutes governing titles to motor vehicles, and so the ownership of the car remained in the seller and his policy would apply if the car was being driven with his permission (under this approach, the ownership of the pickup truck in the case before us would remain with the seller, Selvidge Auto, and their liability insurance, if they had any, would apply, if Hisaw were driving with their permission, in accord with the Missouri cases referred to in the following paragraph).
However, neither of the two cases cited involved the question of whether the liability coverage of the purchaser’s policy or that of his permittee applied, which is the question before us. In both cases, the question was whether the purported seller’s policy applied and since he had not divested himself of title by reason of failure to comply with the motor vehicle title statutes, he was still the owner and his policy applied. Sabella v. American Indemnity Company, (Mo.Sup. banc) 372 S.W.2d 36, and Allstate Insurance Company v. Hart*404ford Accident and Indemnity Company, (Mo.App.) 311 S.W.2d 41, are Missouri cases to the same effect. None of these cases involves an interpretation of the meaning of the words “acquires ownership” as applied to the factual situation before us and it is submitted these cases do not solve our problem.
Our case necessarily involves interpretation of the words “acquires ownership” and the principal opinion construes or interprets “ownership” as meaning what is necessary to meet the requirements of Sec.' 301.210. There is nothing before us by which we can say with assurance that this is the meaning intended by the parties thereto when the MFA insurance policy was written. On the contrary, it is much more reasonable and in keeping with the likely intent of the parties that what is meant by “acquires ownership” is that if the named insured acquires what the ordinary man would consider ownership for the purposes at hand, that meets what the parties intended. Both Couch and Appleman support this view: 12 Couch, Insurance 2d Ed., Sec. 45: 187 p. 237: “ ‘Ownership’ of the automobile for the purpose of a replacement clause refers to the true ownership of the automobile, and means such ownership as an ordinary man ascribes to his own, the property right which he holds as owner, the right of user, and interest in its protection which goes with a sense of ownership.” 7 Appleman Insurance Law and Practice, Sec. 4293, p. 91: “Where the policy states in such provision that coverage is afforded when the insured acquires ‘ownership’, it means such ownership as the ordinary man would contemplate by such term, that is, the right of user and such an interest in its protection that goes with a sense of ownership . . . ”
In the case before us, White traded in his 1961 Rambler, took delivery of the 1958 Ford pickup truck from Selvidge Auto, and received the title papers from Selvidge. These were in order, except for lack of an acknowledgement and this was because it was at night when the notary was absent. White was told by Selvidge, however, to take the certificate to a particular notary who knew his signature and would notarize it. There was nothing, therefore, suspicious in what occurred or to make White apprehensive as to the genuineness of what he was getting. White took possession of the pickup truck and put his Rambler license plates on it. His rights in it were superior to anyone else. The pickup truck was the only vehicle he had and he proceeded to use it. Did not the parties intend that once the named insured had gone this far in replacing his first automobile with another one that the “acquires ownership” part of the automatic coverage for newly acquired automobiles clause had been brought into operation and that he and his permittee would be protected against liability arising out of use of the replacement vehicle ?
What is the purpose of the automatic coverage for newly acquired automobile clause? Appleman says it “ . . . is to give coverage to persons who are already insured with the company in question upon acquiring a new vehicle. The coverage extends to the new acquisition when it replaces the sole automobile owned by the insured . . . ”, 7 Appleman, Insurance Law and Practice, Sec. 4293, page 84. Blashfield says, “An automatic insurance provision is for the benefit of the insured, and its purpose is to extend coverage to the person already insured with the company in question in respect to the operation . . . of another automobile acquired by him, which is not described in the policy, as a replacement for the automobile originally covered ...”
Blashfield goes on to say, “In construing such a provision, it must be kept in mind that the public has an interest in having automobiles covered by liability insurance, and its purpose is to broaden the coverage and not to restrict it”, Blashfield, Automobile Law and Practice, 3rd Ed., Sec. 316.3, pp. 656-658.
*405In Beck Motors, Inc. v. Federal Mutual Insurance Company, (Mo.App.) 443 S.W.2d 200, 203, the court said: “ . . . Its purpose is to permit the automatic extension of coverage to a car not specified by the policy, where that vehicle is acquired to replace the vehicle described . . . ”
The clause also provides a good sales argument for the insurance company for purchase of the policy in the first place and it induces the insured to keep his insurance with the original company when he trades cars, instead of going elsewhere, California State Automobile Association v. Dearing, 259 Cal.App.2d 717, 66 Cal.Rptr. 852, 856.
In American Indemnity Co. v. Davis (CCA 5), 260 F.2d 440, the question of whether there was coverage under the automatic coverage for newly acquired automobiles arose with respect to a replacement car which was jointly owned by the named insured and his son. The court came to the conclusion the term “ownership” as used in the policy was ambiguous and must be construed most favorably to the insured, saying at 260 F.2d 442, “ . . . Since ‘ownership’ in its literal sense includes joint as well as sole ‘belonging’, the use of the more general term ‘ownership’ comprehends the qualified terms ‘sole’ and ‘joint’ ownership. The term is ambiguous . . . ”
In Quaderer v. Integrity Mutual Insurance Company, 263 Minn. 383, 116 N.W.2d 605, 608, the court construed the words “owner” and “ownership” as used in the automatic coverage for newly acquired automobiles clause, saying as follows: “ . . . The pivotal question is: What meaning should be given the words ‘ownership’ and ‘owned’ selected by the defendant in these policy provisions and under the facts of this case?
“In construing the terms of the policy, it must be kept in mind that the public has an interest in having automobiles covered by liability insurance. Further, it is well settled that any ambiguous terms of an insurance policy are construed in favor of the insured and against the insurer who is charged with having chosen the language of the policy. In their context the terms ‘ownership’ and ‘owned’ are ambiguous. It is not clear whether they mean registered owner, or one having legal title to the vehicle, or simply one who may be exposed to liability as a registered owner pursuant to statutes governing motor vehicle registration and the Safety Responsibility Act. Thus the policy should be construed to effect coverage if this can be done without violence to its plain language and underlying purpose.”
In Powell v. Home Indemnity Company, supra, fn. 1, a case involving Missouri law, the court considered the meaning of the word “owner” in an automobile liability insurance policy and said, 343 F.2d 1. c. 859-860: “ . . . The trial court in construing the word ‘owner’ must take the meaning most favorable to the insured . . . The plain and reasonable meaning of the word as applied to motor vehicles includes not only absolute estates but also includes estates less than absolute ...” Under this view, White’s less than absolute estate in the pickup truck would be sufficient to meet the “acquires ownership” language of the MFA policy.
Siemer v. Schuermann Building & Realty Company, (Mo.Sup.) 381 S.W.2d 821, 826, does not involve an insurance contract, but it did involve a contract with the words “persons owning such lots” and the court discusses the meaning of the words “owner” and “persons owning” as follows : “The term ‘owner’ or the equivalent phrase ‘person owning’ does not have a fixed definite meaning. In its restricted sense, it means ‘legal owner’. In a broader sense, it means any persons beneficially interested in property ...”
I see no sound reason why the words “acquires ownership” as used in the MFA policy must necessarily, or should be, equated with ownership or title as used in the Missouri motor vehicle registration statutes. As pointed out in 28 Mo.L.R. 121, *406“Titles to Used Automobiles in Missouri”, our statute, Sec. 301.210 “ . . . represents Missouri’s attempt to curb a problem which has-become increasingly serious in this highly mobile day and age: the theft and fraudulent sale of used automobiles . ” In that field, of course, no one disputes the soundness of holding that a transaction involving purchase and sale of a used automobile is invalid unless the statutory requirements are met. But no such aspect is involved here. To hold that White “acquires ownership” of the pickup truck in the sense intended by the automatic coverage for newly acquired automobile provisions of the MFA liability policy in no way promotes the theft and fraudulent sale of used automobiles. To hold otherwise on the basis that Sec. 301.210 governs is to make a mechanical application of an inflexible rule developed to meet a different problem, where there is no basis for saying the parties had any such intention such rule should govern their insurance contract. In fact, the reasonable intentions on both sides are to the contrary.
As said earlier, deciding this case necessarily involves construction and interpretation of the words “acquires ownership.” If the words are ambiguous, as it seems they are, there is no way to avoid facing the fact that they are and the consequence that they must then be construed most favorably to the insured. As I have attempted to point out, it is quite reasonable to interpret “acquires ownership” as including what White had acquired with respect to the pickup. To interpret “acquires ownership” as meaning that White must have full technical title to the vehicle is actually to construe the words most favorably to the insurer — it produces the narrowest possible coverage.
While it is not our business to remake insurance contracts, as stated in Brugioni v. Maryland Casualty Co., (Mo.Sup.) 382 S.W.2d 707, 710-711, “ ... On the other hand, an insurance policy being a contract designed to furnish protection will, if reasonably possible, be interpreted so as to accomplish that object and not to defeat it, and, if terms of the contract are susceptible of two possible interpretations and there is room for construction, the provisions limiting or cutting down on the coverage of the policy, or avoiding liability therefor, will be construed most strongly against the insurer . . . ”
In the case before us, as it turned out, Hisaw, the driver of the pickup truck, had insurance which applied in case White’s did not. So the injured plaintiff was paid and Hisaw was protected. But suppose Hisaw had had no insurance and suppose further that Selvidge, the used car dealer, was financially irresponsible and had no insurance. Under the majority opinion, there would be no insurance available and it seems to me this result would be an unjustified windfall for MFA and completely at war with what the parties reasonably intended as to insurance coverage.
Under the principal opinion, if a man were to trade his car at a used car dealer for a used car, and if when the used car dealer turned over the assigned certificate of title to him it was somehow defective (assume the notary public simply overlooked notarizing it), then if the purchaser had an accident while driving his newly acquired car home that same day, or if he turned it over to his son to drive it home and the son had an accident en route, there would be no liability coverage under the purchaser’s policy. I do not believe the insurance company had any such intention when it wrote the policy, no do I believe the insured expected there was any such technical loophole.
There is an additional ground on which it should be held that the MFA, not the State Farm, policy provides the primary coverage for Hisaw. I refer to the well-established proposition that ownershp is irrelevant when considering the coverage of a liability policy, a proposition which the majority opinion rejects on page 7 as “not *407germane” in the case. The reasoning is that for Hisaw to be covered by the MFA policy, he had to be using a vehicle described in the MFA policy with White’s permission and the pickup truck could not qualify unless White owned it.
The implication seems to be that ownership would be irrelevant if White himself had been driving, but not where White’s permittee is driving. However, I see no way that White could be covered and White’s permittee not covered, because under the terms of the MFA policy the insurance afforded with respect to the described automobile (the Rambler) applies to* any other automobile of which the named insured acquires ownership if it replaces the described automobile. So if White were covered, certainly his permittee is covered, because the policy covers anyone using the described automobile with White’s permission and the same is true as to a newly acquired automobile.
In Hall v. Weston, (Mo.Sup.) 323 S.W.2d 673, we extended coverage to the named insured’s permittee, who was driving a replacement tractor and trailer. The trial court had directed a verdict against the insured, one ground being that the insured had no insurable interest, on the theory that the insured failed to prove that he had acquired a properly assigned certificate of ownership to the replacement vehicle under the statute, Sec. 301.210. The insurer was relying on Kelso v. Kelso, (Mo.Sup.) 306 S.W.2d 534. The court said this about the Kelso holding, 323 S.W.2d 1. c. 679: “ . . .In any event, however, the cases cited in the Kelso case to support the proposition that one who does not acquire title to an automobile in accordance with the provisions of Section 301.210 has no insurable interest therein were cases involving damage to or loss of an automobile by fire . . . The Kelso case should not be considered authority for the proposition that a named insured needs to have an insurable interest in an automobile in order to be covered by a policy insuring him against liability rather than against loss . . .
“Our present holding is limited to the instant situation, viz., one wherein a policy of automobile liability insurance insures only against liability for damages by reason of bodily injury and property damage arising out of ownership, maintenance, or me of the automobile, and for medical payments, and further provides, as does the instant policy, that ‘insured’ includes the named insured and any person using the automobile with his permission. We hold in the described situation that proof that an automobile was owned by named insured or that he had an insurable interest therein is not necessary. Ownership under those circumstances is irrelevant on the question of liability ...” (emphassis supplied).
The majority opinion refers in footnote 10 to the Hall v. Weston case as involving the “Named insured under policy insuring against liability instead of loss”, but I respectfully point out that the coverage in Hall v. Weston was extended to the named insured’s permittee. The named insured, who had been named jointly as a co-defendant with his driver (the per-mittee) in the original damage suit, had been let out in the jury trial — the jury found in his favor. The judgments which were sought to be collected were against the driver-permittee alone. The principle announced in Hall v. Weston that it is irrelevant in these circumstances whether the named insured had ownership of the replacement vehicle would seem very much germane to the question before us. If ownership by the named insured was irrelevant in Hall v. Weston, where coverage was extended to the named insured’s per-mittee, I fail to see why it is not equally irrelevant here, where coverage is sought to be extended to the named insured’s per-mittee driving a replacement vehicle. It *408seems to me that the majority opinion conflicts in this respect with Hall v. Weston.
One final point: the majority opinion refers to the fact that 22 days after the accident, Hisaw purchased the pickup truck from White, and he and White had Selvidge execute another “Reassignment by Registered Dealer” to Hisaw and Hisaw thereafter was issued a certificate of title on the pickup truck. The majority opinion says this makes it evident “ . . . the parties themselves considered the transaction to be a nullity insofar as it undertook to legally vest any ownership of the truck in White.” In my judgment, these events occurring after the accident, when the rights of the parties as to coverage had already become fixed on whatever the facts were when the accident occurred, cannot operate to affect the rights of the parties. We do not know what motivated Hisaw to buy the truck after the accident. Presumably it was damaged and perhaps Hi-saw felt morally obligated to take it off White’s hands. Hisaw evidently was somewhat negligent in his driving of White’s pickup because $4,000 was paid on Hisaw’s behalf to the injured plaintiff by the insurance company on a policy which had a $5,-000 limit. Also, as a practical matter, it undoubtedly was much simpler for Hisaw and White to forget the attempted transfer of title to White and have Selvidge start over with a new reassignment of title to Hisaw, than to correct the assignment to White and have White go through the steps to get a new title and then assign that to Hisaw. I do not believe the way the parties disposed of the damaged pickup truck after the accident bore any significance to them or to others as to whether Hisaw had coverage under the MFA policy, or whether White had acquired ownership of the pickup truck in the sense the words were used in his policy.
As earlier stated, I would hold that MFA has the primary coverage here and that State Farm does not.

. The general rule in Missouri (unless altered by policy provisions or special circumstances) is that the policy insuring the liability of the owner of a described vehicle has the first and primary coverage. Powell v. Home Indemnity Company (CCA 8) 343 F.2d 856; Fidelity & Casualty Co. of New York v. Western Casualty & Surety Co., (Mo.App.) 337 S.W.2d 566, and State Farm Mutual Auto Ins. Co. v. MidContinent Casualty Co., (Mo.App.) 378 S.W.2d 232. The rule of thumb is that the primary insurance follows the owned car, or, to put it another way, the insurer of the named insured to whom the automobile is non-owned is secondarily liable, generally speaking.
The reasoning is that the coverage written on a particularly described and owned automobile in the standard automobile liability policy is designed primarily to afford coverage for liability arising out of the operation of that automobile by the insured or his permittee. On the other hand, the coverage provided by the standard policy for one operating a vehicle other than the one described in his policy is intended mainly to avoid a liability exposure during incidental use of other vehicles. Olson v. Hertz Corporation, 270 Minn. 223, 133 N.W.2d 519, 523. So in a situation where both policies could apply it is logical to look first to the policy which provides coverage for broad user of the particular vehicle involved in the accident, rather than to the policy which provides coverage only as incident to covering the driver on his own car.