LOSS OF MOTOR-CAR

Poverty Bay Herald, Volume LIX, Issue 17947, 26 November 1932, Page 15

LOSS OF MOTOR-CAR

INSURANCE CLAIM FAILS FRAUDULENT DECLARATION COMMENTS BY THE JUDGE'. That the price of the car concerned in the dispute had been inflated and overinsured by a fraudulent device of the plaintiff company acting through tho managing director and its Napier agent was tho conclusion reached by Mr Justice MacGregor in a reserved judgment delivered in the Wellington Supreme Court in a case in which the Tourist Motor Company, Limited, of Hastings, claimed £llOO agaiust the Tluited lm surance Company, Limited, pn a policy over a nine-aeater motor-car Tho car was sold by the plaintiff to Leonard Ralston Wyllie in February, 1931, on behalf of his brother Under a hire purchase agreement for £ISOO. Steps were, taken to insure the car with the defendant company for £llOO and an advance of £IOOO was made to the plaintiff company in respect of tho transaction by the New Zealand Guarantee Corporation. For a time the car was operated on a service run, but the run did not prove a success and promissory notes hold bv the plaintiff soon fell into arrears. Eventually the car was brought back into plaintiff’s garage at Hastings and while there it was destroyed by fire on October 3, 1931. ■ REFUSAL TO PAY CLAIMA claim for loss amounting to £llOO was declared by Hyslop, mauging director of the Tourist Motor Company, to the defendant company, which refused to pay. In the claim for loss it was (inter"alia) declared by Hyslop that the cash value of the car at the date of its purchase by Leonard Ralston Wyllie was £ISOO, The defendant company contended that this statement by Hyslop was fraudulent inasmuch as the cash value of the car at the date in question was to his knowledge not more than £1250. That contention raised the cardinal question of whether the plaintiff’s claim for the insurance moneys was honest or fraudulent. His Honor held that it was fraudulent. In other words, he said, be was satisfied that the cash value of the car when it was sold to Wyllie was not £ISOO, but was to the knowledge of Hyslop not more than £1250. MEANING OF “BALLOONED” Ilis Honor said that the explanation given by Hammy, the Napier agent of the Tourist Motor Company, of the word “ballooned,” appearing in a letter written by him to Hyslop in regard to the price of the car, was neither intelligible nor convincing to him. Hammy had said that he found the word in an American trade journal. Hyslop simply stated that fie himself did not use the word “ballooned,!’ and consulted a dictionary as to its meaning in Hammy’s letter. “I must follow his example,” continued His Honor, “and fall back on the Oxford dictionary, which defines ‘balloon’ as ‘anything inflated, empty and hollow,’ and (used as verb) ‘to swell or puff out like a balloon.’ These definitions appear to help us in the present case. The result is that according to Hammy the price of this car (which I take to be £1250), was ‘increased’ or ‘inflated’ or ‘swollen’ to allow for the total amount through the Guarantee Corporation to be

available. “That, of course, is precisely what the insurance company now complains of. The price of the car was inflated—‘ballooned’—in order to increase the amountto he advanced on the transaction by the guarantee company. That was effected by the simple method of adding £350 to wlmt Hannay refers to as the ‘proposed deposit’ of £250 in his letter of March 2, 1931. A promissory note on demand for an amount of £250 was accordingly signed by the ostensible purchaser in favor of the plaintiff company, EFFECT THROUGH TRANSACTION ‘■The result is, in effect, that throughout the-whole transaction the car was overvalued and thus, incidentally, but inevitably, over-insured by a fraudulent device of the plaintiff company acting through its managing director and its Napier agent. The Wylbes themselves 1 look upon as merely more or less passive pawns in the game,-having little or nothing to lose. In any event, they did not object to the price of tho car being ‘ballooned’ in the manner described, so long as possession of the car itself was obtained. , “It is fairly clear to me,’’ said His Honor, “that "the only real cash deposit was £l5O, £SO cash from Lep. Wylie and Mrs. Wylie’s sedan car traded in at £IOO. The subsequent history of the sedan itself throws further lurid light on the aixiazing financial methods of the plaintiff company. Having acquired this car as part of the deposit lor £IOO, the plaintiff company the same day went through the form of reselling it to Mrs Wylie, the former owner, for £l5O and forthwith proceeded to procure an advance on it of £IOO from the guarantee corporation, representing that it lmd been sold on a £SO cash deposit-. A somewhat similar equally false representation was made by the plaintiff company in applying for a larger advance on the Studehaker car.” HIS HONOR’S FINDINGS

His Honor also considered several subsidiary points raised at the trial. In the final result he said he was satisfied from the evidence (1) that tho statement made on behalf of the plaintiff company in tho proposal that the price paid to it for the car was £ISOO was untrue; (2) that the insurance policy was obtained through representations made on behalf of tho pjaintiff that the selling price of tho car was £ISOO and that the cash deposit paid on the sale was £SOO, both of which representations were untrue; and (3) that the declaration made in support of the plaintiff’s claim under the policy of insurance was fraudulent. For those reasons the plaintiff company s action must, fail.

Judgment was entered for the defendant company, with costs.