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Rudolph v. Home Indemnity Co.

Decided: December 4, 1975.

JOHN W. RUDOLPH, ET AL., PLAINTIFF,
v.
THE HOME INDEMNITY COMPANY, A NEW YORK CORPORATION, DEFENDANT



Diana, J.c.c., Temporarily Assigned.

Diana

These are cross-motions for summary judgment. The facts are not in dispute.

In March 1973 plaintiff Thomas Rudolph advertised to sell his 1970 Chevrolet Corvette for $3,700. A person representing himself as "Bill Warren" answered the advertisement in person, offering to purchase the car for the sum of $3,600. Rudolph refused to reduce the price and "Warren" returned a few days later and presented a purported certified check on the Carteret Bank and Trust, payable to Rudolph in the sum of $3,700. Rudolph accepted and deposited the check in his account in the Somerset Hills and County Bank and signed and transferred the certificate of ownership to "Warren," who then left with the car.

A week later Rudolph was advised the check was a forgery and that the certification stamp it bore was false. Rudolph reported the incident to his insurance agent and the Franklin Township police. Investigation revealed that "Warren" had given a false address and that a person calling himself "Bill Weinler" and at times "Ron Warren" had previously acquired another vehicle by the same fraudulent device and had given the same false address as had "Warren." It was later discovered that "Warren" subsequently sold the Rudolph vehicle in Florida and that the person known as "Bill Warren" was currently in jail in Florida.

Defendant Home Indemnity Insurance Coverage, which had issued a family comprehensive automobile policy to the

father of Thomas Rudolph, denied coverage because the insured "voluntarily parted with his automobile for a monetary sum" and the policy coverage is limited to "theft or larceny."

The policy provides:

Coverage G. Theft

To pay for loss to the owned automobile or to a non-owner automobile caused by theft or larceny.

LOSS PAYABLE CLAUSE

Loss or damage, if any, under the policy shall be payable as interest may appear to the Lienholder named on the reverse side hereof and this insurance as to the interest of the Bailment Lessor, Conditional Vendor, Mortgagee or other secured party or Assignee of Bailment Lessor, Conditional Vendor, Mortgagee or other secured party therein called the Lienholder shall not be invalidated by any act or neglect of the Lessee, Mortgagor, Owner of the within described automobile or other Debtor nor by any change in the title or ownership of the property; provided, however, that the conversion, embezzlement or secretion by the Lessee, Mortgagor, Purchaser or other Debtor in possession of the property insured under a bailment lease, conditional sale, mortgage or other security agreement is not covered under such policy, unless specifically insured against and the premium paid therefor; and provided, also, that in case the Lessee, Mortgagor, Owner or other Debtor shall neglect to payany premium due under such policy the Lienholder shall, on demand, pay the same.

The company contends that, although Rudolph sustained a loss, the loss does not fall within the policy coverage. The company asserts that since Rudolph voluntarily surrendered both title and possession, neither a theft nor larceny took place in the legal sense.

The distinction defendant draws is that a theft or larceny occurs when legal title to the property remains in the owner after the wrongful taking, but where legal title (whether by fraud or false pretenses) is transferred to the wrongdoer, the wrongful taking is at most obtaining property by false pretense but not a theft or larceny.

The criminal statutes of New Jersey still retain distinctions between larceny, embezzlement and obtaining ...


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