Bunney

Wilmer Bunney by his guardian recovered judgment in the United States District Court against Associated Indemnity Corporation as insurer. The latter appeals.

The basic facts are not in dispute. David and Clarence Bunney, as Bunney Bros., were engaged in dump truck operations for the Works Progress Administration. They owned a Ford dump truck, which we shall denominate the “1935 truck”, on which they carried personal injury and property damage insurance with defendant. David entered into negotiations with the Pound Motor Company leading to the purchase of a used truck, which we shall term the “1938 truck”. The.parties reached an agreement whereby the 1938 truck would be sold in return for the 1935 truck and $339.00. As David wished to retain the steel body from his old truck, the parties agreed further that he should install the steel body on the 1938 truck and should transfer to the 1935 truck a wooden body, which representatives of the Pound Motor Company had inspected and had pronounced acceptable. Thereafter, he was to take the 1935 truck to the Pound Company.

On January 4, 1940, the 1938 truck was delivered to David. He immediately placed a chattel mortgage on it, and gave…