Action begun January 27, 1941, by Alvin Fish against Connecticut Fire Insurance Company, on a fire insurance policy contract for damage to a truck caused by fire. Judgment entered November 28, 1941, for the plaintiff in the sum of $577.68 and costs. Defendant appeals.
The complaint shows the issuing of the policy and alleges that the agent of the defendant was fully informed of the condition of the title including all prior liens. And that at the time of the fire when the truck was damaged he was still the sole owner thereof. That the Insurance Company took possession of the truck and disposed of what remained as salvage.
Defendant in its answer alleges that there was at all times prior to the issuance of the insurance and thereafter an incumbrance, evidenced by a conditional sales contract owned by the Universal Credit Company, that no notice prior to said loss, or knowledge thereof, had ever been given the defendant. It is charged that the plaintiff intentionally and fraudulently concealed this fact, and that, had such knowledge been possessed by the defendant, the policy would not have been issued. It is also alleged in the answer that, before the fire, the plaintiff sold and transferred his interest in said truck to Lloyd Slaback, and that the interest of the plaintiff had terminated, and asked that the plaintiff be denied any recovery under the policy. *Page 168
The case was tried to the court without a jury. There was evidence that the agent of the Insurance Company was informed of all the circumstances connected with the ownership and the existing liens upon the truck before the insurance policy was issued. There was subsequently an agreement entered into by the plaintiff with one Lloyd Slaback under which the plaintiff agreed to sell the truck and the said Slaback agreed to purchase, subject to the issuing to said Slaback by the public service commission of Wisconsin of a license as a contract motor carrier. The trial court found upon all disputed facts in favor of the plaintiff. That there was a full disclosure, in good faith, to the Insurance Company's agent of the indebtedness upon said truck. That said agent was acting for the Monroe County Finance Company, at the time of the transaction with the Insurance Company, loaned to the plaintiff $300, and gave the same to him by two separate checks, one payable to the plaintiff and the Universal Credit Company, and the other payable to the plaintiff individually. That the plaintiff duly indorsed the first check and delivered it to the Universal Credit Company in the belief that that amount satisfied the indebtedness. That the policy named the plaintiff and the Monroe County Finance Company as joint insured. That the agent was duly informed that the Universal Credit Company claimed that a mistake had been made and that there was a small additional sum due. That the agent advised the plaintiff that it was all right, "that plaintiff might pay the claimed additional sum due said Universal Credit Company;" this balance was fully paid when the truck burned on the 7th of May, 1940, "while said truck was being operated by plaintiff's servants . . . and at the time of said fire the policy of insurance . . . was in full force and effect." The findings, with reference to the contract between plaintiff and Slaback for the purchase of the truck, are that no transfer has *Page 169 occurred; that the certificate of title was not assigned to said Slaback; that at the time Slaback was an employee of the plaintiff, engaged in his regular business; that no violation of the terms of the policy occurred; that the Insurance Company was duly notified of the loss; that the truck was taken to the International Harvester Company garage in Madison; that thereafter defendant refused to permit plaintiff to interfere with the truck and, without notice to plaintiff, the defendant acquired possession and has since retained it. Due proofs of loss were made and defendant denied liability; that immediately before the fire, the truck was of sound value of $700; that the defendant paid the balance due the Monroe County Finance Company, a named insured, leaving the sum of $577.68 of sound value unpaid. The trial court concluded, as a matter of law, that the policy was in full force and effect at the time of the fire. That the plaintiff was not guilty of any fraud, concealment, or deception. That the defendant, by reason of the facts disclosed, is estopped from claiming any forfeiture of said policy. That the plaintiff was the sole and unconditional owner of the truck at the time of the fire; that the title of plaintiff was unaffected by the executory contract of sale and awarded judgment in favor of the plaintiff for $577.68, with interest from the 7th of May, 1940. From the judgment accordingly entered the defendant appeals and assigns, among other claimed errors, the following: That there is no evidence to sustain the finding that disclosures of all indebtedness against the truck were made to W. J. Pollard, defendant's agent; and the finding that the plaintiff was the sole and unconditional owner; and that the damage done by the fire was $700. The view of the circumstances taken by appellant led it to interpose several defenses against allowance of respondent's claim under the contract policy of insurance, but the contentions of appellant were all answered by testimony properly admitted upon the trial. So, the appellant is met on this appeal with findings of fact against it and those findings are sustained by the evidence.
Objection was made to the admission of evidence., and the assignment of error based on those rulings has been examined, but we find no prejudicial error. The evidence showing that a full disclosure of all existing liens upon the truck was made when the insurance was asked for is ample and convincing. The appellant's agent was informed of the condition of the title. He arranged a loan to pay previous liens and made out a check to cover the amount supposed to be due thereon, making the check payable to the respondent and the creditor. A mistake was made in naming the amount due, but of this mistake the agent was informed. Good faith was established in dealing with the agent and the knowledge of the agent at the time the policy was issued was "knowledge of the company," sec. 203.13 (1), Stats.
The question which caused the trial court most concern arose out of the agreement between respondent and his employee, Slaback. Under this agreement, Slaback was to become the owner of respondent's business as a licensed contract motor carrier when he (Slaback) secured the necessary license from the public service commission, and on this contract appellant raises the point that respondent had parted with his interest in the truck. This was a conditional sale and under the contract the property in the truck and business was to be transferred at a future time and after the proposed buyer had secured his right to engage in the business as a contract motor carrier, sec. 121.18 (1), Stats.
The intention of the parties to that agreement not only appears from the contract itself, but the conduct of the parties *Page 171 recognized the fact that conditions were to be fulfilled before the sale would be complete or a delivery of the truck would occur. It was an agreement to sell in the future. Slaback continued in the employ of respondent, and he and another employee were using the truck in respondent's business, under his direction, and for his benefit, when the fire occurred. Slaback was being paid his wages as an employee at the time.
New tires were placed upon the wheels of the truck. Respondent testified, "I bought the new tires that were on the truck on a conditional sales contract and there was some back on the tires at the time of the fire." There was no investigation of the circumstances relating to the purchase of the tires. No effort was made to ascertain the amount paid or the balance due, or the relation with respect to the matter as it existed between the seller of the tires and respondent. A conditional sales contract does not freeze a transaction so that it may not be modified. The seller may waive his claim to the title in the article sold and the buyer has a right of redemption under certain circumstances after default. There was no showing upon the trial that the seller concerned himself in the case. When the tires were mentioned, and respondent was asked if he had notified the Insurance Company, the court answered that it would make no difference. That ruling was not challenged, and after respondent answered "No" to that question, the matter was dropped. The court was of the opinion that appellant lost the right to avail itself of certain defenses by reason of its course of conduct both before and after the fire. The court found that appellant had taken possession of the truck for its own protection and refused to recognize respondent's rights in the situation. This occurred almost immediately after the fire, and the proceedings for the sale under the disproved claim of the Universal Credit Company did not occur for at least three months after the fire, and the chattel mortgage under which appellant now desires to have it appear that it *Page 172 acted was not purchased by it from the Monroe County Finance Company until more than a month had passed.
It further appears that the tires were not destroyed by the fire and that they were sold as a part of the salvage under arrangements to which the appellant was found to be a party. While the seller under a conditional sales contract may, if he chooses, assert title to replacements on a truck on the theory that by retaining the title in himself such equipment is separable from the truck and not an accession, on the other hand, tires or other replacements which the owner placed on the machine go with it when the title is freed of a lien either by waiver or by express agreement. A seller might choose to rely on the account without the security. 2 Berry, Automobiles (6th ed.), p. 1451, sec. 1806; Hallman v. Dothan Foundry Machine Co. 17 Ala. App. 152, 82 So. 642; Franklin, ServiceStations, Inc., v. Sterling Motor Truck Co. of N.E.50 R.I. 336, 147 A. 754; K. C. Tire Co. v. Way Motor Co.143 Okla. 87, 287 P. 993. The appellant's relation to the subject in litigation does not extend to and include the matter of an accounting between the seller of the tires and respondent, and in the absence of proof of a valid and existing incumbrance the principle of accession would be applicable. There is no evidence of any harm resulting to the appellant from the replacement of the tires.
The court found that the claim of the Universal Credit Company had been fully paid before May 7, 1940, the date of the fire. Still that company assumed to act to the extent of reclaiming the truck and offering it for sale. This was done without notice to respondent. Control over the truck exercised by appellant has been referred to. Respondent testified that he promptly sought to take possession of it but his demand was denied. There was a stipulation dated May 18th, signed by Slaback, whom the court found was an employee of respondent, and the "Connecticut Fire Insurance Co.: By Western Adjustment Inspection Co., J. J. McIntosh, Adjuster," *Page 173 in which "it is hereby agreed and determined that the sound value of the property immediately preceding May 7, 1940, and the loss and damage which occurred on that date is as follows: . . . Sound value: $700." On June 24, 1940, the appellant took an assignment of the mortgage held by the Monroe County Finance Company. A sale of the salvage took place under the proceedings referred to and the Western Adjustment Inspection Company was the purchaser.
There was sufficient competent evidence before the trial court with reference to the value of the truck to sustain the finding that immediately before the fire it was worth the sum of $700 and due proofs of loss were made. The appellant must be held to have taken possession of the wreckage for salvage purposes under its policy provisions, thus leaving to respondent his right to recover the value of the insured property. Appellant acquired and satisfied an existing lien by taking an assignment of the chattel mortgage on which there was due $122.32, leaving a balance of $577.68 due respondent for which judgment was granted.
By the Court. — Judgment affirmed.