Sly v. American Indemnity Co.

JENNINGS, J.

Plaintiff instituted an action to recover damages for personal injuries sustained by her in an automobile accident. In this action she secured a judgment against E. A. Krause, the insured in a policy of insurance issued by defendant. The defendant conducted the defense of its insured in the action. Upon the return of the writ of execution unsatisfied, plaintiff brought this suit against the insurer to enforce collection of the judgment theretofore obtained by her. Upon the conclusion of the trial the court rendered judgment in plaintiff’s favor. From the judgment thus rendered defendant prosecutes this appeal.

It is the contention of appellant that it is not liable under the terms of the insurance policy by virtue "of which respondent was permitted to recover for the reason that, prior to the happening of the accident in which respondent suffered the injuries of which she complains, the insured had transferred whatever interest he had in the insured automobile and had surrendered possession of the automobile to his vendee who at the time of the accident was operating it.

Facts material to the appeal as disclosed by the record are as follows: On December 20, 1929, E. A. Krause executed a conditional sales contract with the J. R. Townsend Company, Inc., of San Diego, whereby he agreed to purchase from said company a certain automobile and to pay therefor the sum of $833.78". Of this amount the sum of $160 was paid on execution of the contract and the balance of $673.78 was to be paid in monthly installments. It was agreed that legal title should remain in the seller pending payment of the entire purchase price. The buyer was given possession of the automobile. On this same date appellant issued a policy of insurance whereby it insured J. R. Townsend Company, Inc., and E. A. Krause for the term of one year against loss from certain enumerated perils. One of these perils is legal liability imposed by law upon the assured for damages on account of bodily injuries caused by the ownership,

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maintenance or operation of the auto, accidentally suffered or alleged to have been suffered during the life of the policy by any person. On January 7, 1930, K A. Krause secured from the Department of Public Works, Division of Motor Vehicles of California, a certificate of registration showing J. B. Townsend Company, Inc., to be the legal owner and E. A. Krause the registered owner of said automobile. In the month of January, 1930, certain negotiations were had between E. A. Krause and one Floyd J. Mills regarding the exchange hy Krause of his equity in the automobile for a motorcycle which was the property of Mills. During the progress of these negotiations the matter of having the automobile re-registered in Mills’ name was discussed, but inquiry in regard to this matter at the office of the Townsend Company developed the information that such action would require the payment of an additional fee and it was therefore abandoned. However, on January 30, 1930, Krause and Mills met at the place of business of a dealer in motorcycles in the city of San Diego and informed the dealer that they proposed to make the exchange and at the same time Krause turned over to the motorcycle dealer the Mills motorcycle, as initial payment on another motorcycle and signed a conditional sale agreement whereby he agreed to purchase the second motorcycle for a specified price. Upon the conclusion of this transaction, Mills drove away in the automobile and thereafter retained possession of it. The accident in which respondent was injured occurred on February 9, 1930, at which time Mills was operating the automobile.