Opinion
Hearing Granted by Supreme Court June 14, 1928.
Appeal from Superior Court, Los Angeles County; Frank C. Collier, Judge.
Action by Willard O. Fiske against the Niagara Fire Insurance Company of New York, a corporation. From the judgment, defendant appeals. Reversed.
Stephens, Justice pro tem., dissenting.
COUNSEL
David R. Faries, John R. Berryman, Jr., and Edwin Heizman, all of Los Angeles, for appellant.
David D. Stuart, of Los Angeles, for respondent.
OPINION
THOMPSON, J.
This action was brought by the plaintiff against the defendant to recover on a contract of insurance, insuring against "theft, robbery, and pilferage." The defendant demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action. The lower court overruled the demurrer, giving the defendant ten days to answer. No answer having been filed within the time given, judgment was entered in the sum prayed for, and the defendant prosecutes this appeal therefrom on the judgment roll. While counsel for the parties litigant say the sole question to be decided in this case is whether larceny by trick and device is insured against, we feel that we cannot be so limited to a purely academic discussion of an abstruse problem, but rather must look to the complaint to determine in what manner, if at all, the theft is alleged.
We find that on February 21, 1923, the plaintiff and one Spainhower entered into a conditional contract of sale, by the terms of which plaintiff agreed to sell an automobile to Spainhower for $400, payable "$140 upon the execution" of the contract, and the balance at the rate of $30 per month. Subsequent to the execution of the contract, which was also subsequent to the delivery of the check for $140, but prior to the delivery of the automobile, the insurance policy was issued by the appellant insuring the plaintiff and Spainhower "jointly and severally" against loss occurring by reason of "theft, robbery, or pilferage." Payment of the check of $140 was never made, for the reason that Spainhower had no account with the bank upon which it was drawn. Spainhower departed with the automobile for "parts unknown," and neither he nor the automobile has ever been located.
We think the sole question in the case is reasonably stated by counsel, but perhaps the opinion may subsequently be cited with more assurance of its proper application if we reframe it to read: The sole question to be solved is whether it was the intent of the parties to the insurance policy by using the words "theft, robbery, and pilferage" to insure against a larceny by trick and device, by one of the parties named as a beneficiary under it, the trick and device having been made use of prior to the issuance of the policy. In other words, we are to inquire: What did the parties contemplate when they used the term "theft," under all the circumstances surrounding the making of the contract? Prior to the legislative session of 1927 we had no criminal offense in California designated by the word "theft." Some states, however, had previously given to the word "theft," as we now have done, a statutory meaning quite different from that sense in which it is popularly employed. We need not go farther afield than our own state to illustrate this thought. Prior to the passage of the statute shortly referred to there had been a consistent distinction marking the offenses of larceny and embezzlement. Last year the Legislature passed an act (section 490a, Penal Code [St. 1927, p. 1047, § 7]) which reads:
"Wherever any law or statute of this state refers to or mentions larceny, embezzlement, or stealing, said law or statute shall hereafter be read and interpreted as if the word ‘theft’ were substituted therefor."
We might ask the question, was the word in the policy at the time it was used intended to be as comprehensive as the definition now given to it by statute? It is intimated in Hartford Fire Insurance Co. v. Wimbish, 12 Ga.App. 712, 78 S.E. 265, and Michigan Commercial Insurance Co. of Lansing v. Wills, 57 Ind.App. 256, 106 N.E. 725, that the words "theft, robbery, and pilferage" have the same meaning when used in an insurance policy as in a prosecution for such offenses. If in this instance the word "theft" at the time it was employed by the parties here was not intended to include embezzlement, then by which particular statutory or legal definition thereunder, if any at all, should it be governed? These questions are asked for the purpose of emphasizing the thought that, at least in the absence of a statutory definition in this state, the words would more faithfully depict the minds of the parties if they receive that meaning popularly and customarily attributed to them by laymen. A most interesting and illuminating case upon this subject is Anderson v. Hartford Accident Co., 77 Cal.App. 641, 247 P. 507, where it was said that the term "highway robbery" should be interpreted according to the customary meaning it had acquired by "its consistent use throughout the English speaking world."
That the question of intent is the determining factor in arriving at the proper construction of the contract before us is evident from the following authorities upon the subject:
Buxton v. International Indemnity Co., 47 Cal.App. 583, 191 P. 84, involved the construction to be placed upon a policy as altered by a letter written by the insurer to the insured prior to the issuance of the particular policy, reading as follows:
"‘I wish to advise you that the International Indemnity Company will from this date extend policies on all cars in which you may have an equity to cover any claims arising under the following conditions: *** (3) If the conditional buyer of an automobile or any member of his immediate family should steal any automobile insured under our policies and thereby commit a felony, upon warrant being secured for the arrest of such party or parties, the company hereby agrees that your equity in any automobile insured by this company will be fully protected."’
After holding that the letter and the policy constituted one contract, the court quite properly held that it was the intent of the parties to the contract of insurance thus made to insure against embezzlement of the automobile by the conditional purchaser in contravention of section 504a of the Penal Code. While it is too well settled to require citation of authority that the decision can only be read as settling the law applicable to the facts then before the court, it is important here to note that the intention of the parties was the governing factor in the determination of the case. In arriving at this intention, the court made use of dictum that the policy without the letter would cover "theft by one having a conditional contract of purchase, *** if we concede the possibility of such an offense." The court also says:
"It is difficult to imagine how he" (the conditional purchaser) "could commit larceny in connection therewith, for this offense involves unlawfulness in taking possession. Appellant enlightens us upon this point by arguing that, if the contract of purchase was entered into for the purpose of stealing the car, then the original possession would be unlawful and the act would be larceny. It seems unlikely that the plaintiff desired insurance against a situation such as this. The necessary elements of such an offense to bring it within the terms of such a policy would be most difficult of proof. " We have italicized that portion of the quotation which seems to have an important bearing upon the proper construction to be put upon the terms of the policy here in question, and in arriving at the intent of the parties when the policy was issued, insuring the plaintiff and the conditional purchaser jointly and severally against loss.
The case of Delafield v. London & Lancashire Fire Ins. Co., 177 A.D. 477, 164 N.Y.S. 221, also approaches the problem from the standpoint of the intent with which the word "theft" was employed in the policy. It says:
"While this policy insures against ‘theft,’ it seems clear that it was not the intention of the parties to the contract of insurance to insure against larceny by trick and devise; that is, theft, the commission of which involves, as an essential element, the deception of the insured, resulting in a surrender of the possession of his property. The term ‘theft,’ as used in this policy, does not include all forms of larceny recognized by law. It does not include a larceny perpetrated, as this was, under the form and guise of a business transaction conducted by the insured himself."
We also draw some light from Stuht v. Maryland Motor Car Ins. Co., 90 Wash. 576, 156 P. 557, where the court was again considering the exact words of this policy. It is there said:
"The words ‘theft,’ ‘robbery,’ and ‘pilferage’ are well understood. They were used in this policy in their common and ordinary meaning."
Reference may properly be had to two very interesting and instructive cases involving marine insurance contracts where the word "thieves" was under consideration, which cases go a long way toward demonstrating that the common or ordinary meaning of the word is to govern the construction of the instrument. In the first case, Atlantic Ins. Co. v. Storrow & Boyd, 5 Paige (N.Y.) 285, the policy contained a provision insuring against loss by "thieves," and the question was whether the policy was intended to cover a loss by "simple larceny (furtum)" or only one "perpetrated by open violence, denominated latrocinium by the civil law." It was determined that the policy was not limited to losses from assailing thieves, but also covered a loss occasioned by larceny unaccompanied by violence. This was contrary to the view entertained by the English and Continental text-writers and also contrary to the statement found in Kent’s Commentaries (14th Ed.) 303, as follows:
"The theft that is insured against by name, means that which is accompanied by violence (latrocinium) and not simple theft; furtum non est casus fortuitus."
In commenting upon the decision in Atlantic Ins. Co. v. Storrow & Boyd in the notes relative to the quotation just given from Kent’s Commentaries, the author says:
"This decision overrules all the old authorities and text-books, for they all apply the term ‘furtum,’ or simple theft, as well as ‘latrocinium,’ or robbery, or assailants from without the ship, and exclude from the policy simple theft, as not being properly as casualty. All the English text-writers follows the same rule, as Malynes (Lex Mer. c. 25), Molloy (de Jur. Mar. b. 2, c. 7, § 7), Beawes (Lex Mer. 313), Weskett (on Ins. tit. ‘Theft’), Park (30, 31), Millar (145, 146), and Marshall (by Condy, i. 243). Park, in his 6th Ed., says that the English law is silent on the subject. The decision by Chancellor Walworth may be reasonable, and it is according to the popular acceptation of the word ‘thieves,’ but it is against all the text authorities, foreign and domestic. It is also in contravention of the principle that thefts are not casualties; and it may be a matter of questionable policy whether the owners and masters of ships ought to be indemnified against thefts of goods under their own care, and occasioned by their own lack of vigilance."
The pertinency of the last part of this last quotation to a correct application of the law to the facts before us is made apparent when we consider that ordinary business precaution would have prevented the acceptance of the check for $140 without certification of its genuineness. However, the next authority, the case of American Insurance Co. v. Bryan, 26 Wend. (N.Y.) 563, 37 Am. Dec. 278, is fully as illuminating. For a more thorough understanding of the meaning of the word "thieves," we have concluded to sacrifice somewhat the cause of brevity and quote liberally from this case. The policy in question insured against, "pirates, rovers, thieves, and barratry of the masters and mariners"; barratry being "a criminal, or at least intentionally fraudulent misconduct of the master or mariners towards the owner of the vessel." In the argument of counsel for the respondent, we find the following:
"The word ‘thieves’ has the same meaning in the policy as in all other cases, and there is not a word in the English language which has, and has had for centuries, a more defined, limited, and restricted meaning, both in common use and among lexicographers. Walker defines ‘thievish,’ ‘secret, sly, acting by stealth; the robbery may be by stealth, yet thievery is by common understanding intended to mean secret, private larceny."’
Again he says:
"There seems then no ground for saying that the law limits the meaning of the word ‘thieves’ to ‘assailing thieves’-that it changes the meaning of furtum into latrocinium. No usage is shown establishing this distinction. On the contrary, the word when used in a policy is held by underwriters themselves to have its natural and usual meaning. This is evident from the fact that many companies limit their liability by excepting loss by thieves or by assuring in express terms against ‘assailing thieves."’ The court adopted this reasoning of counsel, and said:
"This throws us back to examine the older use and meaning of the words ‘thieves’ and ‘theft.’ They have had a peculiar use in our language. The primary meaning, which is now the ordinary one, is that of secret stealing or simple larceny. But they had formerly a more general signification, and comprehended robbery or violent taking, although that was never the exclusive sense. The signification was either an unlawful and guilty taking of property generally, or else and more especially a secret taking. Our received translation of the Bible, that still fresh and living ‘well of English undefiled,’ was but little prior in date to the ascertained use of the clause in question, and it abounds in examples of these uses. The original words in the New Testament [here occur two Greek words] have respectively the precise sense of a ‘secret thief,’ and ‘a robber by force.’ They are translated indiscriminately by ‘thief,’ though the former word is never translated ‘robber.’ When the two words occur together, their distinct meanings are marked as ‘he is a thief and a robber.’ (John x, 1.) But we read, ‘a certain man fell among thieves,’ literally, ‘among robbers.’ Again: ‘Ye have made my house a den of thieves,’ in modern language, ‘a robber’s den’ (spelunca latronum, in the vulgate).
"At a later date, we find Blackstone, a legitimate English classic, as well as the most pleasing and perspicuous of elementary teachers, explaining larceny by theft, and he speaks of it as either simple larceny or plain theft, unaccompanied by any atrocious circumstances, or else compound larceny, of which robbery is a species. It is needless to multiply examples, to show that at whatever period we may fix the introduction of this clause in our policies, the words comprehended the largest risk of felonious taking, with or without force, secretly or by open assault. Modern use has gradually restricted the sense to thieving unaccompanied by violence, but at no period do we find any usage of an exclusive signification of robbery only, which would not embrace the other meaning."
In the case of Spinetti v. Atlas Steamship Co., 80 N.Y. 71, 36 Am. Rep. 579, the bill of lading exempted the company from liability from loss arising by reason of "theft on land or afloat" and "barratry of master or mariners." This cause was determined by resolving the intent of the parties, the court citing with approval the authority from which we have just quoted. It is obvious that it is just as great an error to stretch the word beyond its proper signification as it is to restrict it by undue limitation. Rapalje in his work entitled "Larceny and Kindred Offenses" says:
"‘Larceny’ is derived from the Norman ‘larcyn,’ Latin ‘latrocinium.’ *** It must be done fraudulently and secretly, so as not only to deprive the owner of his property, but also to attempt to leave him without knowledge of the taker."
While this last statement quoted by Rapalje from State v. Ledford, 67 N.C. 71, may not receive approval as a legal definition, it is instructive upon the common or ordinary meaning of the word "theft," for it is apparently confused with that word. Our own word "furtive" is derived from the Latin furtum, and indicates the stealthiness or secretiveness inherent in the predecessor of simple theft. Webster’s New International Dictionary defines thief as "one who steals, esp. stealthily or secretly; one who commits theft, or larceny; formerly, also, a robber."
We are of the opinion from our investigation of the meaning of the word "theft" that it signifies, in its ordinary acceptation, as distinguished from its legal definition, the secret, furtive act of feloniously appropriating to one’s own use the property of another under cover of darkness or some scheme designed to escape detection. Or, to phrase it differently, the word, to the ordinary layman, conveys the mental picture of one who secretly takes and carries away another’s property, rather than one who deals with cheats and swindles, tricks, artifices, or devices.
That it was the intention of the parties to the contract to employ the word in its ordinary sense is strongly suggested by the fact that they were not satisfied to use it in an all-inclusive sense, but also employed the word "robbery" to indicate the loss occurring by the use of violence or fear (inherited from the Latin latrocinium) and "pilferage" to indicate petty thievery. One of the most potent factors to be considered in arriving at the sense in which the word was used in the policy is the fact that Spainhower was one of the beneficiaries named in the policy. Had it been intended that the contract was to insure the other beneficiary against loss from a trick and device used by Spainhower prior to the issuance of the policy, is it not more than passing strange that he also should have been insured? A case has been called to our attention, to wit, Neal v. Liverpool Ins. Co., 178 A.D. 730, 165 N.Y.S. 204, in which it was held that, where the conditional vendor and vendee of a motorcycle were both named as beneficiaries in the policy, the conditional seller was entitled to recover the balance due on the contract where the loss occurred as a result of the conditional purchaser’s stealing the motorcycle himself. No sound reason is advanced for the ruling. The intent of the parties is not discussed and apparently not considered. A portion of the opinion reads:
"I am of the opinion that the policy covers the plaintiff’s loss. It in effect insured each interest separately, namely, that of the plaintiff, the conditional vendor, and of Arthur, the conditional vendee, and by its express terms covers theft by any person other than such as are expressly excepted by the terms of the policy. As to the plaintiff’s interest, Arthur is not within this exception." We cannot help but remark that no account is taken of the fact that the persons who are excepted are those in the employment, service, or household of the insured. Even though the facts were not essentially different in the instant action, we could hardly accept the foregoing as authoritative.
In so far as the case of Rush v. Boston Insurance Co., 88 Misc. 48, 150 N.Y.S. 457, is concerned, we must bear in mind that, on the strict question as framed and limited by counsel, it is prior to the case of Delafield v. London & Lancashire Fire Insurance Co., supra, decided by the same department, and, if there be no distinction in the two cases, it must be considered as affected by the latter. However, the Rush Case is in no way pertinent to the question here under consideration, for the reason that all the facts said to constitute the larceny were committed by one other than a conditional purchaser, and subsequent to the time the policy was issued. Furthermore, the judgment for plaintiff against the insurance company was reversed because the trial court rejected testimony tending to show that the person who took possession of the automobile was acting under an honest belief that he was entitled to possession. Therefore this case is of no assistance whatever in the determination of our problem. The authority of Overland-Reno Co. v. International Indemnity Co., 115 Kan. 137, 222 P. 122, would be more valuable if it discussed the question under consideration, but the opinion is confined to a consideration of the question framed by counsel and stated by the court as follows:
"The defendant contends that the act of Dolson did not constitute a larceny, but that the car was procured by false pretense."
After determining that the offense was larceny, it is assumed or taken for granted that it was covered by the policy without discussion of that question.
The case of Hill v. North River Ins. Co., 111 Kan. 225, 207 P. 205, 24 A. L. R. 736, can hardly be accepted by us as authority for the reason that it extends the meaning of the word "theft" far beyond its popular or common acceptation. It is there said:
"The prevailing rule is that any scheme, whether involving false pretenses or other fraudulent trick or device, whereby an owner of property is swindled out of it with the preconceived intent of the swindler not to pay for it, is classed as larceny, and is punished accordingly."
While we recognize the rule that where the provisions of a policy are reasonably susceptible of two constructions consistent with the object of the obligation, one of them favorable to the assurer and the other favorable to the assured, that the one favorable to the assured will be adopted, we cannot extend this doctrine to the point where it does violence to the English language or fails to properly interpret the minds of the parties. The case of Illinois Automobile Insurance Exchange v. Southern Motors Sales Co., 207 Ala. 265, 92 So. 429, 24 A. L. R. 734, is not helpful, for the reason that it was an appeal from an order granting a motion for a new trial where a judgment had gone for the defendant; the trial court being of the opinion at the time it granted the motion for a new trial that the plaintiff was entitled to recover under a policy containing the words here in question, where the purchaser executed notes representing a part of the purchase price secured by a certain amount of timber which he claimed to own, but which he did not own. The Supreme Court determined that the purchaser did not consummate a theft of the car, and reversed the order granting the motion for a new trial. If the case can be considered helpful, it must be taken as denying the doctrine laid down in Hill v. North River Insurance Co., supra, to the effect that any false pretense or fraudulent trick or device is classed as larceny and constitutes a theft under the policy. We are of the opinion that the demurrer should have been sustained.
Judgment reversed.
I concur: WORKS, P. J.
STEPHENS, Justice pro tem. (dissenting).
The following opinion having been prepared by me, and my associates disagreeing therewith and having agreed upon and filed the main opinion, with which I cannot agree, I file this as my dissenting opinion in the case.
The defendant demurred to the complaint on the ground that it does not state facts sufficient to constitute a cause of action. The lower court overruled the demurrer, giving defendant ten days to answer. No answer having been filed within the given time, judgment was entered in the sum prayed for, and defendant appeals on the judgment roll.
Appellant states, and respondent agrees thereto, that the only question involved is, "Does the policy insuring against theft, robbery and pilferage insure against a larceny committed by means of trick and device?"
As shown by the allegations of the complaint, an automobile was obtained from plaintiff’s assignor by trick and device, in that one Spainhower pretended to purchase the car through a lease contract, which provided that the title should remain in plaintiff’s assignor until a full compliance with its terms was had, and delivered a check as and for the initial payment, stating that he had money in the bank and that the check would be paid upon presentation. Payment thereon was never made, for the reason that Spainhower at no time had an account with the drawee bank. The automobile has never been returned, and Spainhower immediately disappeared. As the judgment was entered after demurrer sustained and no answer filed, we must consider the whole transaction upon Spainhower’s part as fraudulent and as a scheme to trick plaintiff’s assignor into delivering the car to him so that he could make way with it. The agreement of counsel as to the sole point presented for decision also requires us to accept the facts as constituting a taking by trick and device.
The controversy, reduced to its simplest terms, is: Plaintiff claims that a taking by trick and device is a "theft," while defendant claims that it is not. Appellant contends that the word "theft" does not contemplate a loss through trick and device.
Bouvier says:
"Theft is a popular term for larceny. It is a wider term than larceny and includes other forms of wrongful deprivation of property of another."
"‘Theft’ is defined as a proper term for larceny, and is used by Blackstone as synonymous with the latter word and as descriptive of one and the same offense. Hence it is held that the word ‘theft’ describes a crime and is synonymous with larceny." People v. Donohue, 84 N.Y. 438.
The turning point in all cases of this nature is whether or not there was an intention on behalf of the owner of property to presently part with the title as well as the possession of the property. 25 C. J. 657, and cases cited. In the instant case the title was specifically retained by plaintiff’s assignor. This rule in reference to larceny prevails alike in England and the United States. In the case of People v. Shaughnessy, 110 Cal. 602, 43 P. 3, the court says:
"In The Queen v. Russett, L. R. 2 Q. B. Div. 312, decided in 1892, Coleridge, C. J., said: ‘If the possession of the money or goods said to have been stolen has been parted with, but the owner did not intend to part with the property in them, so that that part of the transaction is incomplete, and the parting with the possession has been obtained by fraud, this is larceny."’
To the same effect are People v. Smallman, 55 Cal. 185, and People v. Rae, 66 Cal. 423, 6 P. 1, 56 Am. Rep. 102, the latter a leading case in which the principle is exhaustively treated, both in the main and dissenting opinions. The principle contended for here is affirmed in both. We quote from the main opinion:
"Where, by means of fraud, conspiracy, or artifice, possession of the property is obtained with felonious intent, and the title still remains in the owner, larceny is established. While the crime is false pretenses, if the title, as well as the possession, is absolutely parted with."
This language is quoted with approval in People v. Delbos, 146 Cal. 737, 81 P. 131. See, also, People v. Johnson, 91 Cal. 271, 27 P. 663; In re Clark, 34 Cal.App. 440, 167 P. 1143; Matter of Moss, 120 Cal. 695, 53 P. 357; People v. Rial, 23 Cal.App. 713, 139 P. 661, and People v. Edwards, 72 Cal.App. 102, 236 P. 944.
Appellant relies upon Delafield v. London, etc., Ins. Co., 177 A.D. 477, 164 N.Y.S. 221 (a case essentially the same as the instant one), in which his contention is squarely upheld; but after an extensive research there has been found no other authority holding to the principle therein enunciated. The case cited does not discuss the points presented and cites no authority in support of the conclusion therein reached. In Hill v. North River Ins. Co., 111 Kan. 225, 207 P. 205, 24 A. L. R. 736, a case where an automobile was stolen by trick and device, the insurance policy seems to have been about the same as in the instant case, insuring against "theft, robbery, or pilferage." The opinion reviews the authorities and holds the taking to be "theft," as the term is used in the policy. Commenting upon the Delafield Case, the court says:
"It seems that this New York case may have had several features to distinguish it from the one before us; but whether it had or not, it does not *** shake our conviction that the case at bar was correctly decided."
In Illinois Automobile Ins. Exchange v. Southern Motors Sales Co., 207 Ala. 265, 92 So. 429, 24 A. L. R. 734, the expression "theft, robbery, or pilferage" is analyzed in the light of the authorities, and "theft" is held to cover larceny by trick and device. The court there said:
"The decision in Delafield v. London, etc. [ 177 A.D. 477, 164 N.Y.S. 221], *** is not acceptable authority. The court there seems not to have taken any account of the rule of construction to which we have referred."
Hartford Fire Ins. Co. v. Wimbish, 12 Ga.App. 712, 78 S.E. 265, analyzes the terms "theft, robbery, and pilferage" fully, and comes to the same conclusion reached in the two last above cited cases. The same may be said of Stuht v. Maryland Motor Car Ins. Co., 90 Wash. 576, 156 P. 557.
Buxton v. Industrial Indemnity Co., 47 Cal.App. 583, 589, 191 P. 84, deals with the words "steal" and "theft" in an insurance policy, and holds that "theft" covers a case where there is a felonious intent to make way with an automobile at the time a purchaser on a conditional sales contract acquired possession of it. And so in Rush v. Boston Ins. Co., 88 Misc. 48, 150 N.Y.S. 457, it was held, under an automobile insurance policy using the same terms as those in the policy considered in the instant case-theft, robbery, or pilferage-that the claimant "could not recover unless he had been deprived of [the automobile] feloniously *** and that proof of taking by trick and device would be sufficient to allow an inference of intent." In Overland-Reno Co. v. International Indemnity Co., 115 Kan. 137, 222 P. 122, the court was considering the exact point before us here, and said:
"The defendant contends that the act of Dolson did not constitute a larceny, but that the car was procured by false pretense. We adhere to the doctrine in Motor Co. v. Insurance Co., 111 Kan. 225, 207 P. 205, 24 A. L. R. 736, and Overland-Reno Co. v. Indemnity Co., 111 Kan. 668, 208 P. 548. In the former it was said: ‘The prevailing rule is that any scheme, whether involving false pretenses or other fraudulent trick or device whereby an owner of property is swindled out of it with the preconceived intent of the swindler not to pay for it, is classed as larceny."’
This subject is fully treated in notes to 14 A. L. R. p. 215; 19 A. L. R. p. 171, and 24 A. L. R. p. 740.
Blashfield in his "Cyclopedia of Automobile Law," vol. 3, § 81, treats the law on this subject as follows:
"It has been held, in one jurisdiction, that the word ‘theft,’ as used in such a policy, does not include all forms of larceny recognized by law, and does not cover larceny by trick and device, that is theft that involves as an essential element, the deception of the insured resulting in the surrender of the possession of the insured property but not in parting with title. Delafield v. London & Lancashire Fire Ins. Co., 177 A.D. 477, 164 N.Y.S. 221. But, in other jurisdictions, under the rule that where the provisions of a policy of indemnity are reasonably susceptible of two constructions consistent with the object of the obligation in question, one favorable to the insured and the other favorable to the insurer [see Faris v. American Nat. Ass’n, 44 Cal.App. 55, 185 P. 1035], that one will be adopted that is favorable to the insured, it is held that the words ‘theft,’ ‘robbery,’ or ‘pilferage,’ in an automobile policy, will include larceny in any and every form not expressly excluded by other provisions of the policy, and that the term may therefore include securing the possession of a chattel, not the title thereto or a special property thereunder, by or with the consent of the owner, through a fraudulent trick or device, then intending to steal the chattel, or the act of a swindler, who deprives the insured of the possession of an automobile, the insurer retaining title to it, by means of a preconceived plan which involves impersonation, misrepresentation, and fraud. Under this rule, any scheme, whether involving false pretenses or other fraudulent trick or device, whereby an owner of an automobile is swindled out of it, with the preconceived intent of the swindler not to pay for it, is larceny within such a policy. ***"
It may be debatable whether or not, under the agreed point at issue, as mentioned in the briefs of both parties, attention should be given to and comment made in this opinion upon possible questions that may have importance in the case. However, two points will be briefly noticed.
A reading of the complaint will show that the spurious contract for the sale of the automobile was entered into, and the check for the first payment delivered, prior to the issuance of the policy of insurance, also that the delivery of the automobile under the contract was subsequent to the issuance of the policy. This state of facts does not change the effectiveness of the policy. While the whole plan to steal the automobile was in course at the effective date of the insurance policy, the theft had not been accomplished. It was only accomplished when the possession was actually obtained by the thief. To argue otherwise would be to say that an insurance policy would not be applicable to a case where prior to the date thereof a person had secured duplicate keys to the insured car for the purpose of stealing it, but had only used them successfully after the date of the policy.
The other point which possibly may properly be considered here is as to whether the policy, having been issued to the owner and the contract holder, who turned out to be a thief, as to their respective interests, affects the contract as to the owner. Logically this cannot be. It has been held in O’Neill v. Queen Ins. Co., 230 Mass. 269, 119 N.E. 678, that a policy insuring an automobile against theft, taken out by one who has no insurable interest, is void as to him. The statement that a person who steals an automobile, as in the instant case, has acquired no insurable or other interest therein is incontrovertible, and needs no citation of authority to support it. A person has no insurable interest in a thing if his assumed or asserted right therein arises under a contract which is void or unenforceable in good morals or at law or in equity. Hessen v. Iowa Automobile Mut. Ins. Co., 195 Iowa, 141, 190 N.W. 150, 30 A. L. R. 657. The further statement that, the policy having been procured by the owner in good faith, it cannot be invalidated by the felonious act of the thief, is axiomatically sound. The point is decided in Neal v. Liverpool, etc., Ins. Co., 178 A.D. 730, 165 N.Y.S. 204, a case dealing with a theft by trick and device on a conditional sales contract:
"The plaintiff sold the motorcycle by a conditional bill of sale to Arthur. The verdict is for the amount due and unpaid to plaintiff for the purchase price. The proof tends to show that Arthur, one of the insured, himself stole the motorcycle, and the question is whether the plaintiff, the other insured, may recover for its interest in the motorcycle. I am of the opinion that the policy covers the plaintiff’s loss. It in effect insured each interest separately, namely, that of the plaintiff, the conditional vendor, and of Arthur, the conditional vendee, and by its express terms covers theft by any person other than such as are expressly excepted by the terms of the policy. As to the plaintiff’s interest, Arthur is not within this exception."
The judgment should be affirmed.