Hutchings v. Southwestern Automobile Insurance

HOUSER, J.

This appeal is from a judgment in favor of the defendant.

Plaintiff was the owner of an automobile which he sold to one Brown on an installment contract. Nine days thereafter the defendant issued to plaintiff an insurance policy which, among other things, purported to insure plaintiff against the embezzlement of the automobile by Brown. One of the covenants contained in the insurance policy was the following:

“It is a condition precedent to any right of recovery hereunder or under the policy to which this endorsement is attached, that the automobile hereby insured has, at the time of issuance of this endorsement and the attached policy, been lawfully registered with the Motor Vehicle Department of the State of California in the name of the said vendor as the legal owner, and the name of the said vendee as the registered owner thereof.”

It is urged by respondent that the fact that at the time the insurance policy was issued, the automobile was not registered in the name of plaintiff had the effect of voiding the policy. With reference to the situation covered by such “condition precedent” in the policy, the case of

Raulet

v.

Northwestern National Ins. Co.,

157 Cal. 213 [107 Pac. 292], would appear to be controlling in principle. In that case the insurance policy, which covered certain furniture, contained a clause in substance that if the insured property either was, or should become, “encumbered with a chattel mortgage,” the policy should be void. It appeared that at the time the policy was issued there was in fact a chattel mortgage upon the property to secure the payment of rent for the building in which the furniture was located. Although primarily it was held that such a mortgage did not

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come within the spirit of the provisions of the insurance policy to which attention has been directed, it was also held in effect that such a provision was in the nature of a “veritable trap for the unwary, ’’ and before it could be binding upon the assured “the company should be required to call specifically to the attention of the policy holder” the provision in question. Among other things, the court said: