On appeal from the Supreme Court, Middlesex Circuit.
For the appellant, William H. Campbell, Jr.
For the respondent, James F. Patten.
The opinion of the court was delivered by
CAMPBELL, CHANCELLOR. The proofs in the case seem to be: Frank Van Syckle conducted a garage and Dodge automobile agency at Perth Amboy and the appellant company was his insurance carrier; his brother, Harold, was the manager of the business and in entire charge thereof; no one except he and Frank had authority to pass upon and approve the sale or purchase of automobiles.
On Saturday, May 2d, 1931, about five P.M., one Charles Stevenson presented himself at the Van Syckle agency as a prospective purchaser of a Dodge car. Neither Frank nor Harold Van Syckle was present. Stevenson talked to and had all his dealings with one Kehrer, a salesman. He wished to turn in, as part payment on a new Dodge car, an Essex car. Kehrer talked to Harold Van Syckle over the telephone respecting the offer and proposition made by Stevenson, and while Van Syckle did not give his approval to the proposed transaction he did give permission to Kehrer to turn over to and put Stevenson in possession of a Dodge car. No definite
or fixed terms of sale were settled upon at that time. Stevenson left his Essex car at Van Syckle's place of business. There appears to have been some uncertainty as to whether Stevenson desired to purchase a six-cylinder or an eight-cylinder Dodge. The automobile he was permitted to take was a six-cylinder car. Before permitting Stevenson to take the car Kehrer required him to sign an order for it and a chattel mortgage in blank and a note, likewise in blank, for the first payment. Selection of the particular car to be purchased and the final terms of purchase appear to have been postponed until the following Monday morning when Harold Van Syckle would be present and could pass upon the proposed transaction.
The license plates of Stevenson's Essex car were transferred to the Dodge and Stevenson left the Van Syckle place with the Dodge car about six-thirty P.M.
On Monday, May 4th, 1931, at about three A.M., Stevenson, operating this Dodge car, struck and injured one Frank Steinrock.
On the same day at about nine A.M., Stevenson saw and talked to Harold Van Syckle, for the first time, respecting the sale of a Dodge car; his offer of the preceding Saturday, May 2d, was accepted; Frank Van Syckle executed to him a bill of sale, and the chattel mortgage and other instruments signed in blank by Stevenson on the preceding Saturday were filled out and executed by Van Syckle.
The bill of sale and chattel mortgage were dated as of Monday, May 4th, and executed by Van Syckle between nine and ten A.M. The bill of sale was filed with the motor vehicle department May 5th, and on the same day the chattel mortgage was recorded in the Middlesex county clerk's office.
Thereafter Steinrock, the respondent, brought suit against Stevenson, individually, and as agent of Van Syckle, for damages resulting from the happening of May 4th. He was nonsuited so far as his cause of action ran against Stevenson as agent of Van Syckle, but he obtained a verdict and judgment against Stevenson and an execution under such judgment was returned unsatisfied.
Frank Van Syckle's contract of insurance with appellant contained a provision as required by section 10, chapter 116, Pamph. L. 1929, p. 199 (Cum. Supp. Comp. Stat. 1925-1930, p. 1059, § 135-128). That provision is as follows: "This policy is further extended to cover, as an additional assured, any person while riding in or legally operating any automobile owned by the assured named in Declaration No. 1, or any person, firm, or corporation legally responsible for the operation of such automobile where the disclosed and actual use of the automobile is for pleasure and ordinary business purposes and the automobile is being so used with the permission of the named assured; but the coverage provided under this paragraph shall under no circumstances apply to any automobile while being purchased from the named assured under any installment payment agreement and in which the named assured holds title in whole or in part."
Failing in satisfying his judgment against Stevenson, the respondent, Steinrock, brought suit against Van Syckle's insurance carrier, the appellant, under the foregoing provision of the insurance contract upon the idea and theory that at the time of the occurrence on Monday, May 4th, 1931, at three A.M., Frank Van Syckle was the ...