Coverage is extended automatically "if the allegedly replaced automobile is either disposed of by the named insured, or is inoperable or incapable of further service." ( Hames Ready Mix, Inc. v. Transit Cas. Co., 260 Cal.App.2d 173, 175 [ 66 Cal.Rptr. 898]; Merchants Mut. Cas. Co. v. Lambert, 90 N.H. 507 [ 11 A.2d 361; 127 A.L.R. 483]; Hoffman v. Illinois Nat. Cas. Co. (7th Cir. 1947) 159 F.2d 564, 566; Mitcham v. Travelers Indem. Co. (4th Cir. 1942) 127 F.2d 27; National Indem. Co. v. Giampapa, 65 Wn.2d 627 [ 399 P.2d 81, 83].) The concept of operability is one of practical, rather than legal, usability.

But after a thorough reading of counsel's briefs as well as an independent search of the authorities, the court is unable to find any Virginia case that has decided the exact issue now before the court. One of the most often cited cases involving facts similar to the case at bar is Merchants Mutual Casualty Co. v. Lambert, 90 N.H. 507, 11 A.2d 361, 127 A.L.R. 483 (1940). Merchants Mutual Casualty Company issued a policy of liability insurance covering a 1930 Pierce-Arrow sedan.

The court held since the Oldsmobile was actually inoperable when the Dodge was acquired, the Dodge was a replacement for it, and since the Ford replaced the Dodge, the insurer's liability was the same as if the Ford had replaced the Oldsmobile directly. "In Merchants Mutual c. Co. v. Lambert, 90 N.H. 507, 11 A.2d 361, 127 A.L.R. 483 (1940), the insured owned a 1930 Pierce-Arrow which was out of repair and not fit to be driven on the public highway. The insured then purchased a 1935 Pierce-Arrow and put it to the same use as the 1930 Pierce-Arrow. He did not dispose of or transfer the tags or registration from the 1930 automobile to the 1935 automobile.

1966); Lynam v. Employers Liability Assurance Corp., 218 F. Supp. 383 (D.Del. 1963). The insured here relies on authorities which state that the fact that the vehicle described in the policy was retained by the insured in a legally useable condition does not preclude transfer of coverage to the newly acquired automobile where the evidence discloses that the new car was in fact purchased to replace the old one. Merchants Mutual Casualty Co. v. Lambert, 90 N.H. 507, 11 A.2d 361, 127 A.L.R. 483 (1940); Maryland Indemnity and Fire Ins. Exchange v. Steers, 221 Md. 380, 157 A.2d 803 (1960); Maryland Casualty Co. v. Toney, 178 Va. 196, 165 S.E.2d 340 (1941); 7 Am.Jur.2d Automobile Insurance § 101; Ann. 34 A.L.R. 2d 936, 945 (1954). However, the cases cited in support of this proposition involve factual circumstances indicating that the retained vehicle was physically or legally inoperable at the time that the new vehicle was acquired.

The Buick was not sold, however, and title and ownership remained in the owner. On these facts the court held no replacement had taken place.Mitcham distinguished Merchants Mut. Cas. Co. v. Lambert, 90 N.H. 507, 11 A.2d 361, 127 A.L.R. 483 (1940), infra, in that the described automobile that was replaced and retained in Lambert was garaged and actually inoperable and incapable of further service at the time of replacement. There was also failure to comply with a notice provision which was contained in the policy in dispute.

In our opinion, the other cases above cited, denying coverage, are likewise consistent with our present decision. In Merchants Mutual Casualty Co. v. Lambert, 90 N.H. 507, 11 A.2d 361, 127 A.L.R. 483 (1940), the policy described a 1930 Pierce-Arrow as the insured vehicle. It provided coverage for a subsequently acquired vehicle "if it replaces an automobile described in this policy.

Respondents cite a number of cases for the proposition that the language of the policy permits coverage where title and possession of the described car are retained but it is not driven because of needed repairs. Merchants Mutual Cas. Co. v. Lambert, 90 N.H. 507, 11 A.2d 361, 127 A.L.R. 483; Glens Falls Ins. Co. v. Gray (5 Cir.) 386 F.2d 520; National Ind. Co. v. Giampapa, 65 Wn.2d 627, 399 P.2d 81. In the New Hampshire case, the trial court found the described car was "worn out, out of repair, and not fit to be driven on the public highway."

As long as this was the situation, in the event of an accident involving the named automobile, the insurer could not have shown that the named car was no longer covered by the insurance policy, and thus have avoided liability. However, in the instant case, there was ample evidence from which the lower court could find, as it did, that at the time of the acquisition of the Dodge, the Oldsmobile was in fact inoperable; and therefore the problem of determining which automobile was covered by the policy was different from the problem in the Mitcham case. Much closer to the instant case on the facts, is Merchants Mut. Casualty Co. v. Lambert, 90 N.H. 507, 11 A.2d 361. The court in that case held that the evidence sustained the finding of the lower court that the newly acquired automobile was purchased to replace the named automobile for the use to which the named automobile had been put. The evidence indicated there, as here, that the car was mechanically inoperable even though the owner retained possession of the car and it still had license plates on it. The Mitcham case distinguished this case on the ground that in Mitcham the named automobile was still operable.

"The automatic insurance clause in standard policy forms is intended to meet the necessity for maintaining continuous insurance on cars in the presence of the recognized custom among insured owners of acquiring other cars by replacements and new purchases during the life of their policies, and is intended to be and is worded so as to afford proper insurance protection to such insured and at the same time to preserve the essentials of insurance for the insurer." The clause is usually called "automatic insurance" in the clause heading in the policy, but in any event courts generally hold it provides automatic coverage within the notice period, (usually ten or thirty days) before any notice has been given. Merchants Mutual Casualty Co. v. Lambert, 90 N.H. 507, 11 A.2d 361, 127 A.L.R. 483 and note, page 486. In Continental Casualty Co. v. Trenner, D.C. Pa., 35 F. Supp. 643, 644, it is said: "* * * insurance which can be extended by a mere notice from the insured and without any new contract can be fairly called `automatic' insurance * * *."

In a liability insurance policy language providing for automatic insurance of newly acquired automobiles does not cover the temporary use of a borrowed car, and means the insurance automatically covers a newly acquired automobile which is purchased to replace the one which is already in use. Merchants Mut. Cas. Co. v. Lambert, N.H., 11 A.2d 361, 127 A.L.R. 483; Clarano v. Gamble-Robinson Co., supra; Dean v. Niagara Fire Ins. Co., 24 Cal.App.2d Supp. 762, 68 P.2d 1021. Gordon Davis, W. C. Warren, and E. L. Dodson, all of Tuscaloosa, for appellees.