
    NO. 8834
    COURT OF APPEAL PARISH OF ORLEANS
    Gulf Finance & Securities Co. vs. Globe Indemnity Co.
    
      
    
   Dinkelspiel; J.

This suit is instituted by plaintiff, alleging that the defendant company issued policy of insurance, whereby thqr insured piaintiff against loss resulting-from the conversion of automobiles upon whloh the plaintiff held chattel mortgagee, given by purchasers for such automobiles, to secur-e the credit portion of the purchase price. The bond of the defendant read as follows:

"How. therefore, in considers,tion of the payment of an agreed premium, Globe Indemnity Company, (hereinafter called the surety; does hereby agree to indemnify said Automobile Finance & Securities Company, (hereinafter called the obligee) against such direct pecuniary lose as the obligee may sustain by any act of laroeny, embezzlement or conversion of the purchaser, whereby the obligee is deprived of the security of motor vehicles listed in any schedules made a part hereof, as hereafter'orovided, either directly or through the connivance with others on tne part of any purchaser named in the said schedules."

Plaintiff alleges that it aoqulred twelve chattel mortgage notes executed by one 0. J. Douoet on February 11th. 1920. in part payment for the purchase price of an automobiife'bought by him; that it oald the premium on its policy; that the debtor paid the first seven notes, but defaulted upon the payment of the last five notes; that the dbbtor, in August, 1330 , violated the condition of the ohattel mortgage by selling the automobile to one Hsnselman, without recognition of the chattel mortgage; that the automobile was placed beyond the reach of the plaintiff, could not be found, and that plaintiff is aooordlngly entitled to compensation thereby suffered, under the terms of tne policy. Plaintiff prays for a Judgment KX for §198,41, being the amount of the five unpaid notes-, plus interest at sight per cent thereon from October 11th, 1930, and for the sum of 110.46 detective charges.

The defendant claims, flrsi;, termination of liability under the policy as to its risk prior to the making of the claim. Seoond, failure to comply with the requirements of the policy as to the giving of immediate notice of the claim thereunder.

Defendant further contends that the policy in question is subjeot to the further conditions: "The liability under this obligation shall begin v/ith the day cf the purche-ae set opposite the name of the purchaser in any shhedule made part hereof, and 3hall end it the expiration of one year from date of purchase, as shown in said schedule”, end under clause seven contend "Upon disoovery by the obligee of any act which may be made the basis of 2, '■lo.im thereunder the obligee shall give immediate written notice thereof to the surety c.t its branch office in Hew Orleans, and affirmative proof of loss shall be filed with the surety at said jgranch office in How Orleans within three months thereafter. "

It would be futile and serve no good purpose to quote any portions of the testimony in this case, save such as mxi are material to the issues, in our opinion.

Plaintiff has offered in evidence, the act of sale of the automobile in question, which oontains the ch-ttel mortgage and in connection therewith has offered the five notes sued upon. The act of mortgage sho\vs that in addition to the notes sued upon bearing eight per cent interest from date until paid, there is also fifteen per cent attorney's fes3 part of the act.

The testimony shows that frequent letters and demands were made by plaintiff for payment of the notes given by the purchaser Douoet, and the letters contained the statement that if the notes were not promptly paid proceedings would be taken to enforce collection, and the privilege and lien'plaintiffs held against the automobile im question. It is further shows that when suit was instituted against Douoet by executory prooess to enforce the lien that the Sheriff failed to find the automobile in question in the premises of Douoet, who in the meantime had disposed of the car to one Hanselman, and the latter had also disposed of It to someone else, without stating anything In reference to tne mortgage and lien, ana every attempt mads to ascertain where tne car was located, both by the employment of the deteotive agenoy, by tne Sheriff, end by the plaintiff, proved unavailing. The evidence shows that notice was given in writing to the aeienaant oompany of these facts, there was some auestion as to wnetner nr not the first notice sent was or w»s not received by the defendant oom-ststed pany, on the one iwud it was^atosix that the letter was written and mailed, but the defendant's officer in charge of matters of this character denied receiving the letter. The detective's report was olso sent to the defendant company.

The witness Hanselman testifies-that he laxa bought from Doucet the car in question, he bought it in August, 1920, did not know there was a mortgage on the oar, haa paid cash for the car. he kept it for thirty days, then sold it, he bought the oar in the c-ity of New Orleans and sold it there also.

We take up for consideration, first the defends made that failure to comply with the requirements of the polioy as to the giving of "immediate notice"of the claim thereunder.

It is urged with great force both in the brief and in the oral argument of defendant's oounsel, that the notioe given of the lev-1 of this ms chine was not given as required by the stxp-ulati's-s in the insurance contract* where it is required that "the obligee upon discovery of any act which may be made the basis of a claim under the policy, shall give immediate written notice thereof to the surety st the branoh office No. 506 Liverpool & London & Globe Building, New Orleans, Louisiana, and affirmative proof of loss shall be filed with the surety st its said branch office within three months thereafter", and numerous authorities ere cited in support of this propositition.

Without quoting the decisions referred to by oounsel in this regard, we prefer to rest our opinion as to the words used, "Immediate notice to be given", cn the decisions of the Highest Court of the Land, together with others, in the same connection.

"In an action brought by the receiver of a national bank appointed by the Comptroller of the Currency upon a bond of indemnity given to hold the bank harmless against fraud of a specified officer, it was contended that the court erred in admitting in evidence a notice of the default of the officer, given to the surety company by the receiver within from ten to seventeen days after the discovery of the default, and in instructing the jury that the requirement in the bond that immediate notice should be given of 'i default was fulfilled by giving notice o.s soon as reasonably practicable and with promptness, or within a reasonable time. Held that the trial court did not err in refusing to instruct, :s a matter of lew, that the notice v;fn3 not given as soon as reasonably practicable, under the circumstances of the case, cr without unnecessary delay, and in leaving the jury to determine the question whether the receiver had acted with reasonable promptness in giving the notice."

In the body of its opinion the Court said:

"The notice by the receiver to the surety company that McKnlght was a defaulter was given on Februcry 18, 1897. It follows ths.t the notice was given within ten to seventeen days after the first discovery of s default. Both the trial court end the Circuit Court of Appeals, reviewing numerous authorities, held that the requirement in the bond "that the employer shall immediately give the company notice in wri ting of the discovery of any default or loss" ought net to receive the construction ths.t it was intended by the parties that notice of a default should be given instantly on the discovery of a defrult, but that what wss meant was that notice should be given within a reasonable time, having in view all the circuías cnees of the os.ee. In so deciding ws think the court did not err.. Indeed, this construction of the word "immediate" would SS3m to be apollad in practice, as is illustrated by the bond, of indemnity considered in the case of the Guarantee Co. vs. Mechanics' etc. Co. 183 U. S. 402, where one of the conditions was "that the company shall be notified in writing of any cot on the part of said employe which may involve a loss for which the company is responsible hereunder to the employe immediately or without unreasonable delay." Citing Ward vs. Maryland Casualty Co. 51 Atlantic Reporter, 900, where the court defines the word "immediate" as used in the policy "without any time intervenihg.; without any delay; present; instant; often used, like simil'-r absolute expressions, with less strictness then the literal meaning requires, as an immediate answer." It is evident th'-'t the word was not used in this contract in its literal sense» It would generally be impossible to give notice in writing of a fact the inst'-nt it occurred. It cannot be presumed ths.t the parties intended to introduce into the contract a provision that would render the contract nugatory. As immediate vies understood by them, it alloved the intervention of a period of time between the occurrence of the fact and the giving of notice mere cr les: 1-ngthy according to the circumstances. Ths object of the notice v/os one of the ciroumitsnces to b considered. If it was to enable the defendants to take steps for their protection that mu’t necessarily be taken soon after the occurrence of the fact of which notice wa3 to be given, a briefer time would be required to render the notioe immediste according to the understanding of the pi rties then would he required J>f the object could be equally well attained after considerable daisy. For example, s delay of weeks in giving notioe of the commencement .of the employees suit might not prejudice the defendants in preparing for a defence of the action, while e, much shorter delay in giving notioe of the accident might prevent them from ascertain’ng the truth about it. The parties intended by the language used that tne notice in eeoh case should he given so soon after the fact transpired that, in view of all the circumstances, it would he resson-bly immediate. If a notioe is given with due diligence under" the circumstances of the c.?.~e, and ■ ithout unnecessary and unreasonable del.°y, it will answer the requirements of the contract.1' Citing numerous authorities.
Fidelity & Deposit Co. vs. Courtney, 186 D. S. Reporter 343-45-46-47.
Conrad vs. Also g-e/Uhion Casualty & Insurance Co. 49 La. Ann. 636.
Also see Fisher vs, Globe & Rutgers' Fire Insurance Co. 147 La. 990. et seq.

Other authorities on the s-une subject matter, quoted in plaintiff's.brief, amongst then, American Surety Co. vs. Pruly 170 U. S. 133 et ssq. and authorities from the Supreme Courts .construing the of the different Stated of the union, panatruaingxiha word "immediate" are all to the like tener snd effect.

To the first objection, the termination of liability so to its risk prior to /.-.sting of the ol~ira.

The oh«ttel mortgage given by Doucet contained the pact "de non tli:ni.ndo". In .August, 1330, the proof shews, that Doucet in violation of the t-rms of the mort. age, -sold the oar to Eons el-man, who in turn diopos-d of it to someone else. The.testimony further shew th".t the pic intiff did not discover thl3 act of cen-versicn until the following limrch, 1931, and subsequently the notes being p*st due it filed its suit for executory process and endeavored to seize She c-'r; the Sheriffs return showed the o-sr could not be found; then the notice claiming the amount due under the policy w:.s given to defend».nt company.

1!'e ere of the c-in ion th--t .th-=> notice, given -:~3 in accordance with the terms required by the In-uworo? Coaprny, and was given in time under the policy. When pit-intiff .11s-covered its security on the c.r in q; action fexdxx h».d vanished, through the acts cf the our oh: ter, in the s-1? ts 13 -nvelm-.n, it .v-e covered under this policy, and defendants -.re liable under their bond for the loss. Every effort the t could Ir ve boon a.,ds by plaintiff in order to rcccvcr the property econ >;.3 they ascertained tiio facts, ond more then tV-t could not b ys- r the jyclicy defend -n ¡d, end vs th»t •-s If-ble.

The next objection, where the terms of each note provided for maturity of all notes on default'in payment of-any one note, end all notes bear interest from maturity, Interest will be allowed on all the notes from the date of the first default, it requires no special argument to show that natoikk notwithstanding letters contained a demand for payment of eaoh note, that thsxs that did not waive the fact provided for in the mortgage that the maturity of the several notes were thereby waived by the plaintiff» The.notes speak for themselves and together with the act of mortgage constitute the right to oolleot the eight per cent Interest on the notes in question.

The further objection is made, that where in the body of the petition a claim is made for fifteen per cent attorney's fees' in' addition to the principal demand, and the evidence shows that these fees are due;although the prayer of the petition may omit to-ask for judgment for them they will be allowed under a prayer for general relief.

In this connection there are many cases in the Supreme Court of this State, commencing with the '5th Ann. Police Jury vs. the Corporation of Shreveport, 661; the case of Overead Berney & Co. vs. Robinscn et al, 10 Ann. 738, Smith vs. Cocoran, 7th La. 46; Edwards vs. Smith 10th Ann. 536, and many other authorities to like effect covering this objection, and we are of the opinion that the mere omission in the prayer to a.sk for specific relief is ooverea by the allegation in the petition"which demands the relief covered both by the notes themselves, and the act of mortgage accompanying same.

Having reviewed hoth the evidence s.nd the law as we find it appertaining-to1 the questions herein involved, and construing them, ae we-helive jústioe demands, we are of the opinion that, the Court aquo decided" correctly the issues Involved in this case.

For the reasons assigned, it is ordered, -’ijudgsd and d'-.or 'Odj that the judgmem; of tha Coürt caquo be and the same is horabr ."f firmed, c-'vis of both court-, 6c be p-....id by the defendant.

-Judgment affirmed-  