Defendant primary insurer appealed the judgment of the Superior Court of Alameda County (California), in favor of plaintiff vendor in an action on a policy issued by defendant to recover loss resulting from damages to a covered truck, which had been sold to the insured under a conditional sales contract.
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Overview
Plaintiff vendor sold a truck to insured under a conditional sales contract whereby title remained in plaintiff’s name until full payment. The insured obtained excess insurance on the truck from defendant excess insurer and a policy from defendant primary insurer, naming plaintiff as the payee in case of loss. The truck was damaged, and the insured cancelled the policies. When defendants failed to pay, plaintiff sued. Judgment was entered for plaintiff. Defendant primary insurer appealed. In affirming the decision, the court ruled the policy expressly required that plaintiff be indemnified for its loss, making it an insured party. Acceptance of the policy by plaintiff was not required and its cancellation by the insured after the fact did not impair the rights of plaintiff under the policy, which vested at the moment of loss. Under the conditional sales contract, plaintiff had an insurable interest in the truck and the insurance money stood in lieu of the lost property; repossession of the truck by plaintiff did not defeat its rights. Being excess insurance, defendant excess insurer’s policy could not be deemed other insurance so as to release the primary insurer from liability.
Outcome
The judgment was affirmed because a special rider to insured’s policy provided that loss was payable to plaintiff; the insured’s cancellation of the policy after the loss occurred did not affect plaintiff’s right to recover; plaintiff had an insurable interest in the truck, title remaining in plaintiff under the conditional sales contract at the time of loss; defendant excess insurer’s policy was not in effect at the time.