Salinger v. General Exchange Insurance

Grimm, J.

The petition in this ease was filed in October, 1930. The plaintiff is the wife of B. I. Salinger, Jr. For brevity, he will be referred to as “Salinger” and his wife will be referred to as the “plaintiff. ” The defendant General Motors Acceptance Corporation will be referred to as the “acceptance corporation” and the defendant General Exchange Insurance Corporation will be referred to as the ‘ ‘ insurance company. ’ ’

Generally speaking, it is alleged in the petition that the plaintiff is the owner of a certain LaSalle sedan automobile, purchased from the Cadillac Motor Car Company of Chicago on the deferred payment plan, a copy of the contract being attached to the petition. The contract is a conditional sales contract and specifics the purchase price of the automobile at $3,041.75. There was a deferred balance of $2,089.00 to be paid in monthly installments of $175.00. The contract then provides, among other things:

“1. Title to said property shall not pass to the purchaser until said amount is fully paid in cash. * * *

“6. Time is of the essence of this contract, and if the purchaser default in complying with the terms hereof, or the seller deems the property in danger of misuse or confiscation, the seller or any sheriff or other officer of the law may take immediate possession of said property without demand (possession after default being unlawful),.including any equipment or accessories thereto; and for this purpose the seller may enter upon the premises where said property may be and remove same. The seller may resell said property, so retaken, at public or private sale, without demand for performance, with or without notice to the purchaser (if given, notice by mail to address below being sufficient), with or without having such property at the place of sale, and upon such terms and in such manner as the seller may determine; the seller may bid at any public sale. From the proceeds of any such sale, the seller shall deduct all expenses for retaking, repairing and selling such property, including a reasonable attorney’s fee. The balance thereof shall be applied to the amount due; any surplus shall be paid over to the purchaser; in ease of deficiency the purchaser shall pay the same with interest and the purchaser does hereby confess judgment in the amount of such deficiency. Seller may take possession of any other property in the above described motor vehicle at the time of repossession and hold the same temporarily for the purchaser without liability on the part of the seller.”

It is alleged in the petition that at the time of bringing the suit the plaintiff had invested in the car $1,652.00. It is further alleged that the interest of the Cadillac Motor Car Company had been assigned to the acceptance corporation; that on August 2, 1929, the defendant insurance company entered into, a contract of insurance with the plaintiff against loss by theft, which insurance company policy is attached to the plaintiff’s petition, marked ‘ ‘ Exhibit B. ’ ’ This contract of insurance insured against fire and lightning, theft, robbery and pilferage. It is further alleged that on or about January 10, 1930, said automobile was stolen in the city of Chicago and that the value of the machine at the time of the loss was $2,286.00. It is further alleged, upon information and belief, that all of the stock, of the insurance company which issued the policy was owned and controlled by the acceptance corporation.

On January 3, 1931, the acceptance corporation answered, admitting the execution of the conditional sales contract and admitting that at the time of the theft of the automobile, it was the owner and holder of said conditional sales contract. In a separate count, it answers that after the theft of the automobile, • the automobile was recovered on the 15th day of March, 1930, and thereafter, by an agreement on the part of the plaintiff, the ear was taken to the Schroeder Auto Top and Glass Company of Chicago for repairs; that the car was there repaired and placed .in as good as or better mechanical condition than it was in at the time said car was stolen; that the plaintiff agreed with the insurance company that if said insurance company would pay to the said Schroeder Auto Top and Glass Company the .sum of '$193.60, being the amount of the cost of repairing said 'automobile, the plaintiff would release the said insurance company in full; that said bill was paid and that the plaintiff did enter into and sign a waiver and agreement of settlement, releasing the said insurance company from any and all claims of every kind and character against it upon said policy of theft insurance.

It is also alleged in said answer that after the payment of said repair bill, the acceptance corporation did repossess the said automobile and sold it for an amount of $84.00 less than the then outstanding balance due and owing to the acceptance corporation, under the terms of the conditional sales contract. It is also alleged that at the time said automobile was repossessed, the plaintiff was in arrears on four payments or installments, due under said conditional sales contract under which said car was purchased, said payments being in the amount of $175.00 each, payable one each month.

On January 3, 1931, the insurance company filed its answer by way of a' general denial, and specifically pleaded the recovery of the car after it had been stolen, and the agreement that the car should be taken for repairs, as previously stated; that the plaintiff agreed that if the insurance company would pay the repair bill of $193.60, the plaintiff would and did release the insurance company of all claims of whatsoever kind or character against it, and that thereafter said plaintiff did enter into a written release, releasing the insurance company in full for any loss or claim against it, and directed the insurance company to pay the repair company the repair bill; that, therefore, the insurance company is. not liable to the plaintiff in any sum whatsoever.

On February 2, 1931, the plaintiff filed a reply to the answer of the 'insurance company, containing among other things a denial that the plaintiff signed the release and waiver set up by the insurance company, but admitting that an. instrument was signed, the purposes of which were to authorize the insurance company to have the repair made to the ear. It is claimed that the ear was never returned to the plaintiff for inspection. In another count, the plaintiff replies to the answers filed by both defendant corporations, in substance, that the entire .capital stock of the insurance company is owned by the General Motors Acceptance Corporation and that said insurance company is controlled by the acceptance corporation. It is charged that the instrument claimed by the insurance company to be a release was obtained by fraud.

On March 30, 1931, plaintiff filed an amendment to its reply, alleging' that the acceptance corporation organized under the laws of the state of Delaware has control of the insurance company, save and except qualifying shares held by directors; that the said acceptance corporation dominates and controls its subsidiaries, including the insurance company. It is also alleged that the acceptance corporation, by taking possession of the automobile, has converted the same, the reasonable, value of said automobile being $2,286.00.

For the purposes of this case, only a very brief outline of the facts need be set out. The conditional sales. contract with the Cadillac Motor Car Company was' dated August 17, 1929. The purchase price was $3,041.75, of which $952.75 was paid down, partly in cash and partly an allowance for- an old car, leaving a deferred balance due under the contract of $2,089.00. This was to have been paid in installments of $175.00 each, payable on the’ 20th of each succeeding month, the last .installment being for $164.00.

After the execution of this conditional sales contract, it was sold and assigned, by the Cadillac Motor Car Company to the acceptance corporation, the assignment being in writing and appearing on the back of the conditional sales contract. At the time of the sale of the car, the insurance policy in.question was issued, by the insurance company. It provides, among, other things, to insure the dealer, Cadillac Motor Car Company; the purchaser, the plaintiff; and the acceptance corporation,. as their interests might appear, from loss by theft, pilferage or fire. Salinger was also named as one of the assured, he having signed the conditional sales contract. The entire transaction, so far as the plaintiff is concerned, was handled by Salinger. In fact, for most of the time involved, the plaintiff was in California. Following the mailing of the contract and the delivery of the car, Salinger, acting for the plaintiff, trailed in the payments of the installments, none of which were paid when due. The last payment made on the car was the one due November 20, 1929, which installment was paid December 19, 1929. The payments due December 20, 1929, and January 20, 1930, were never paid, nor were any payments subsequently due ever made. On January 10, 1930, the car was stolen. At that time, the plaintiff was in default on the contract. The insurance company undertook to locate the car, and succeeded March 15, 1930. It was found in a garage in Chicago. A Mr. Haase, as an adjuster for the insurance company, inspected and took possession of the car. The insurance company elected to repair and recondition the car, to which Salinger agreed. There is a slight dispute between the parties as to just what was said in connection with said agreement, but Salinger himself, on rebuttal, testified in reference to his conversation with Haase, when Haase offered to recondition the car, saying:

‘ ‘ I said to him more than that I had no right to ask if they would put it in the shape and satisfy me it was in such shape, that was all I wanted.”

The car was repaired and placed in first-class condition, all accessories which had been stolen or damaged were replaced, and the repair bill was paid. These repairs were completed on April 4, 1930, and on April 5, 1930, while the car was still in the repair shop, and before the same had been delivered to the insurance company, the car was taken by the acceptance corporation, under its conditional sales'contract. The plaintiff at that time was in default more than $700.00 on the conditional sales contract, and some of the payments were more than three months in default, notwithstanding the record shows repeated oral and written notices had been sent in an effort to obtain the payment of the installments due. The acceptance corporation sold the car under the terms of the conditional sales contract and re ceived $1,522.00 therefor, leaving a balance still due the acceptance corporation under the terms of the sale of $42.00.

It will be noted that in this suit, while the acceptance corporation was made a party defendant, no relief was asked against it, and as to it the cause was subsequently dismissed. The jury returned a verdict against the insurance company for $1,600.00.

Twenty-one errors are relied upon for reversal. We shall not find it necessary to consider all of them.

I. By instruction No. 6, the court undertook to direct the jury in reference to the measure of damages in the event, the plaintiff should recover. The policy of insurance provided that in case of loss, the company should be liable in "an amount not exceeding the actual cash value of the property insured at the time of the loss or damage. ’ ’ Notwithstanding this language of the contract, the court instructed the jury that in arriving at the damages, they should consider the following elements:

"1. The reasouMble cash value of the car at the time it was stolen.

"2. Evidence as to the purchase price of the car.

‘ ‘ 3. The use the car had had.

"4. Its value to the plaintiff as a means of conveyance.

"5. Its depreciation in value.

"6. All other facts and circumstances bearing upon the value of the plaintiff’s interest in the car.”

Manifestly, the court’s instructions in this regard were erroneous under the definite terms of liability specified in the insurance contract.

Without unduly extending this opinion, we may say, by way of illustration, that the value of the car to the plaintiff as a means of conveyance was wholly an immaterial inquiry in this particular ease. The definite policy provision which was the written contract between the parties not only provided that the measure of damages should be “an amount not exceeding the actual cash value of the property insured at the time of loss or damage, ’ ’ but also provided that the recovery should be "without compensation for loss of use.”

The court was clearly bound by the provisions of the insurance policy sued upon, and it was therefore erroneous to tell the jury they could consider as an element of damage the value of the car to the plaintiff as a means of conveyance.

' “All other facts and circumstances bearing upon the value of the plaintiff’s interest in the car” is such a broad, vague, and indefinite term as to be both misleading and confusing. No one can tell what elements might be considered by the jury under these broad, vague terms. This statement of an element of damages permits the jury to let their imaginations run upon fanciful elements of damage upon which the appellant would be required to pay by virtue of a general verdict. The only proper thing for the jury to do was to fix the actual cash value of the car.

■ Many other errors are relied upon for reversal, but we deem it unnecessary to discuss them in this opinion.

Presumably, the mistakes of the past will'not be committed in a new trial.

It follows that the case must be, and is-, reversed. — Reversed.'

Wagner, C. J., and Albert, Kindig, De Grape, and Stevens, JJ., concur. Evans, J., dissents. Faville, J., took no part in this case.