Court Opinion

ID: 9569340
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:13:03.378965+00
Date Added: 2024-06-11T11:50:22.141835
License: Public Domain

Hill, J.
(dissenting)—I dissent. I concur in so much of the majority opinion as relates to the immateriality of the failure to notify the insurance company of the replacement of the Cadillac with the Ford.
However, there is only one case2 which I have been able to find which holds, with the majority, that an automobile which the insured owned when the policy of liability insurance was issued can be a “newly acquired automobile” within the purview of the policy, and there is abundant authority to the contrary. Maryland Indent. & Fire Ins. Exchange v. Steers (1960), 221 Md. 380, 157 A. (2d) 803, cited by the majority as containing statements which support its position, is not a case involving the contention that an automobile owned by the insured when the policy was issued is a “newly acquired automobile.” As indicated in the footnote in the majority opinion, the Dodge was acquired after the policy was issued and the Ford was acquired after the policy was renewed. Each met the requirement of being “newly acquired.” Indeed, the Maryland court distinguished Brown v. State Farm Mut. Auto. Ins. Co. (Ky. 1957), 306 S. W. (2d) 836, as being a case where the court had rejected an attempt by the insured to have covered under the “newly acquired” clause an automobile which he owned at the time he took out the insurance.
In addition to the Brown case, supra, the following cases are squarely in point on the proposition that an automobile to be “newly acquired” must have been acquired after the issuance of the policy:
Lynam v. Employers’ Liability Assur. Corp. (D.C. Del. 1963), 218 F. Supp. 383. (This is not only the latest case *636on the specific point with which we are here concerned, but the opinion makes a comprehensive survey of the authorities.) The court held:
“ . .. . The only times when a vehicle may come within the Newly Acquired Automobile Clause are (1) when a vehicle is acquired which in fact is a replacement and the owner discards the old vehicle, (2) when the old vehicle is retained but is not-in working condition. The new vehicle must also be acquired after the issuance of the policy.” (p.385)
Commercial Standard Ins. Co. v. Central Produce Co. (D.C. M.D. Tenn. 1940), 42 F. Supp. 31 (affirmed sub nom. without opinion (C.A. 6th, 1941)), 122 F. (2d) 1021. This case held: that “Automatic Insurance” for “newly acquired automobiles” did not cover a tractor (A), which had been undergoing repairs when the policy was issued and, hence, had not been named therein, when it was placed back in service as a replacement for a tractor covered-by the policy, since tractor A was not “newly acquired.”
State Farm Mut. Auto. Ins. Co. v. Shaffer (1959), 250 N. C. 45, 108 S. E. (2d) 49. The court here held that a car owned, by the insured at the time the policy was issued was not a “newly acquired” car. In stating the terms of one of the policies, the court said:
“The policy by Nationwide provides coverage for a ‘newly acquired automobile.’ A newly acquired automobile is defined by, the policy to mean ‘an automobile ownership of which is acquired by the named insured ... if it replaces an automobile owned by (named insured) and covered by this policy. . . . ’ (Emphasis and parentheses ours.)” (p. 50)
After discussing the authorities, the court concluded:
“It is our opinion that the replacement vehicle is one the ownership of which has been acquired after the issuance of the policy and during the policy period, and it must replace the car described in the policy, which must be disposed of or be incapable of further service at the time of the replacement. . . . ” (p. 52)
Howe v. Crumley, Jones & Crumley Co. (C.A. Ohio 1944), 57 N. E. (2d) 415. Here, a fleet of trucks was insured. A 1930 *637White truck was owned by the insured, but was not included in the coverage because it was not the intention of the insured to use it in his business. One of the insured trucks was so badly damaged it had to be withdrawn from active operation, and the 1930 White truck was substituted for it. The plaintiff was injured in a collision with the 1930 White truck and recovered damages. It was held that the 1930 White truck, having been owned by the insured when the policy was issued, was not a “newly acquired automobile” under the “Automatic Insurance for Newly Acquired Automobiles” provision in the policy.
Utilities Ins. Co. v. Wilson (1952), 207 Okla. 574, 251 P. (2d) 175. This case involved the interpretation of the “Automatic Insurance for Newly Acquired Automobiles” provision, and the court said:
“The 1948 Chevrolet truck, being owned by Leonard Magerus at the time the policy was issued on the 1947 truck, could not have been a newly-acquired vehicle under the terms of the policy.” (207 Okla. at p. 575)
Providence Washington Ins. Co. v. Hawkins (Tex. Civ. App. 1960), 340 S. W. (2d) 874. This is a fire insurance, and not a liability insurance, case; but the discussion of what constitutes a “newly acquired automobile” is apropos. Fourteen specifically described tractors were covered by a fire insurance policy. A tractor owned by the insured for 7 years was substituted for one of the 14 tractors and was, shortly thereafter, burned. There was a provision in the policy for “automatic insurance for newly acquired automobiles,” if the newly acquired automobile replaced one of the insured cars. The court said:
“. . . Neither was the tractor in question ‘newly acquired.’ The undisputed evidence is that appellees purchased it in 1952—seven years previously. A vehicle already owned by insured before the policy was issued is not ‘newly acquired" under the provision. . . . ” (p. 876)
The texts say: “Nor is a vehicle ‘newly’ acquired when it was previously owned by the insured and merely put back into service.” 7 Appleman, Insurance Law & Practice § 4293, p. 92; and in 12 Couch, Cyclopedia of Insurance Law (2d ed.) § 45:193, p. 240-241:
*638“An automobile does not come within the newly acquired replacement automobile coverage unless it is acquired after the policy is issued. Otherwise stated, a newly acquired vehicle clause is by definition restricted to a vehicle thereafter acquired, as it could not have the status of a newly acquired vehicle if owned at the time the insurance on another vehicle of the insured is procured even though it could not be run at that time because it had no motor.
“In addition to being acquired after the making of a contract of insurance, it is of course necessary that it be acquired during the policy period.”
Opposed to this somewhat formidable array of authority, which says that an automobile to be “newly acquired” within the purview of the insurance policies must be acquired subsequent to the issuance of the policy, we have the well-reasoned majority opinion in the present case, and the opinion by a divided court (two to one) in Boston Ins. Co. v. Smith (D.C.A. Fla. 1963), 149 So. (2d) 68, in what would seem to be a sui generis case. Smith applied June 19,1961, for liability insurance on the only automobile he owned—a 1951 Mercury which had been involved in a wreck 3 days before. The agent mailed the application to the assigned risk office in another city. The risk was assigned to the appellant insurance company, which issued a policy covering the period from July 4, 1961 to July 4, 1962. In the meantime, on June 22, 1961, Smith purchased a 1951 Pontiac, and when the policy designating the 1951 Mercury as the “described automobile” was issued, he did not advise the insurance company of any change. While driving the Pontiac, he was involved in a collision on September 26, 1961. The issue was the liability of the insurance company for the damages caused by the Pontiac. The “newly acquired automobile” provision is apparently identical with the one with which we are here concerned. The evidence as to when the insured replaced the Mercury with the Pontiac is described by the court as “indefinite.” It did appear that on June 16, 1961, he drove the Mercury to his home, and that a week or two later he sold it to a junk dealer. The two-judge majority opinion held that it was a “fair inference” that the Pontiac replaced the Mercury some *639time between June 19, 1961, the date of the application, and July 4, 1961, when the coverage period commenced, and said:
“ . . . In this situation we think, construing the policy provision in question most strictly against the insurance company, that on the date of the replacement the Pontiac came under the policy coverage as a ‘newly acquired automobile.’ ” (p. 70)
No authorities were discussed except those dealing with the generally accepted generalities that ambiguities in an insurance policy are to be construed strictly and strongly against the insurer and that such policies are to be construed “so as to effect the dominant purpose of payment to the insured.” The court concluded:
“We consider that our construction of the policy provision in question is consonant with the obvious purpose of that provision to give coverage to a newly acquired automobile when it replaces the sole automobile owned by an insured. In the ordinary case such a replacement of one car by another owned by the same person would probably not appreciably increase the insurer’s liability for the coverage contracted for by an insured.” (p. 70)
Judge Sturgis, who dissented, could find no ambiguity and urged that the language of the “newly acquired automobile” provision could not be rationalized as “extending coverage to an automobile already owned by the insured at the time the insurance contract was executed,” and marshalled some of the authorities so holding. It would seem to have been his view that the “dominant purpose of payment to the insured” had to come within the terms of the policy.
If it is desired to distinguish the Smith case, it could be done on the basis that the 1951 Pontiac was acquired after the application for insurance was made (June 19, 1961), though before the policy was issued (July 4, 1961).
In any event, I believe we should adhere to the authorities heretofore cited, holding that a car owned by the insured at the time his liability policy became effective is not a “newly acquired automobile” within the purview of the policy provision now before the court. Unless “newly acquired” means acquired subsequent to the issuance of the *640policy, or at least subsequent to the application for the policy, it means nothing.
I would reverse the judgment and direct the entry of a judgment absolving the insurance company from liability.
Weaver and Ott, JJ., concur with Hill, J.

Boston Ins. Co. v. Smith (D.C.A. Fla. 1963), 149 So. (2d) 68. This is an unusual case, which will be discussed later in this dissent.