Symes Cadillac, Inc. v. Insurance Co. of North America

Opinion

FLEMING, J.

Insurance Company of North America (INA) appeals a judgment on an undertaking for redelivery in favor of Symes Cadillac, Inc. (Symes).

[907]

In December 1973 Symes sold a 1974 Cadillac Eldorado for $8,632.07 to Cavco West, Inc. (Cavco), an automobile leasing company and sometimes insurance agency. Cavco paid by check, then resold the automobile for $8,000 cash to Rodney Wolfe, an acquaintance of Cavco corporate officers. Wolfe took possession of the automobile. When Cavco’s check bounced, Symes sued Cavco, Wolfe, and others for damages and repossession of the automobile.

To obtain immediate repossession of the automobile pending trial, Symes posted an undertaking for delivery.

1

To prevent the repossession, an undertaking for redelivery by INA was posted on behalf of Cavco and Wolfe. After trial, the court found Cavco, which had defaulted, liable to Symes for the cost of the automobile plus interest and expenses ($9,097.11). The court exonerated Wolfe, who retained the automobile as a good faith purchaser.

Unable to collect its judgment from Cavco, Symes brought the instant action against INA on its undertaking for redelivery. INA denied liability on grounds of mistake, estoppel and lack of consideration. At trial, Wolfe testified that when Symes sought to repossess the automobile, he asked Bruce Kipley, an INA agent and former officer of Cavco who also was named as defendant in Symes’ suit for repossession, to obtain an undertaking for redelivery. Edward Hallman, a senior underwriter for INA, testified that Kipley telephoned him to order the redelivery bond. They were unsure who was the proper defendant to name on the undertaking. Hallman knew Kipley had been associated with Cavco, so he decided to list both Wolfe and Cavco on the bond. If that was wrong,

[908]