Summary
In Maryland Casualty Co. v. Ronan et al., 37 F.2d 449, cited in the Brower case, supra, a corporation purchased a salesman's car for its only salesman who used it almost exclusively.
Summary of this case from Beatty v. HoffOpinion
No. 156.
January 6, 1930.
Appeal from the District Court of the United States for the District of Vermont.
Action by Emma Ronan and another against the Maryland Casualty Company. From the decree, defendant appeals. Affirmed.
The opinion of the lower court, by Howe, District Judge, follows:
The plaintiff Ronan was personally injured October 27, 1923, at Barton, Vt., by the negligence of the plaintiff Stannard in driving a coupé automobile owned by the J.G. Turnbull Company, a Vermont corporation, and insured against liability for accidents by the defendant. In the suit of the plaintiff Ronan against the Turnbull Company and Stannard, which the defendant defended at its own expense in accordance with the provisions of its policy, the judgment of the Supreme Court of Vermont was that Stannard was negligent, and the plaintiff's damages were assessed at $10,000, but it was adjudged that the Turnbull Company was not liable. 99 Vt. 280, 131 A. 788; Ronan v. Stannard, 100 Vt. 436, 138 A. 729. Execution against Stannard on the judgment was returned unsatisfied. He is insolvent.
Here the question is: Is the defendant liable to the plaintiff Ronan under the policy which it issued to the Turnbull Company? The policy provides:
"(A) Against loss from liability imposed by law upon the assured for damages on account of bodily injuries * * * accidentally suffered * * * by any person, * * * caused by any automobile described in the schedule hereof and used for the purposes named therein. * * *"
"II. The insurance provided by this policy is so extended as to be available, in the same manner and under the same conditions as it is available to the named assured, to any person or persons while riding in or legally operating any of the automobiles described in the general agreements, and to any person, firm or corporation legally responsible for the operation thereof, provided such use or operation is with the permission of the named assured, or, if the named assured be an individual, with the permission of an adult member of the named assured's household other than a chauffeur or a domestic servant; provided, further, insurance payable hereunder shall be applied first to the protection of the named assured, and the remainder, if any, to the protection of other persons entitled to insurance under the provisions and conditions of this clause, as the named assured shall in writing direct."
"III. Further, the company will investigate all accidents and claims covered hereunder, and defend in the name and on behalf of the assured all suits thereon, even if groundless of which notices are given to it as hereinafter required; and will pay, in addition to the limit of liability set forth in the general agreements, the expense (including as a part thereof court costs, all premiums on attachment and/or appeal bonds required in any such proceedings, and all interest accruing after entry of judgment and up to the date of payment by the company of its share of such judgment) incurred by it in such investigation and defense; but the company reserves the right to settle any such claim or suit."
"IV. The insolvency or bankruptcy of the assured shall not release the company from the payment of damages for injuries or death sustained or loss occasioned within the provisions of the policy; and the prepayment of any judgment that may be recovered against the assured upon any claim covered by the policy is not a condition precedent to any right of action against the company upon the policy, but the company is bound to the extent of its liability under the policy to pay and satisfy such judgment; and an action may be maintained upon such judgment by the injured person, or his or her heirs or personal representatives, as the case may be, to enforce the liability of the company as in the policy set forth and limited."
Lines 1-3: "The unqualified term `assured' wherever used in this policy shall include in each instance any other person * * * entitled to insurance under the provisions and conditions of insuring clause II hereof. * * *"
Lines 17-19: "No action shall lie against the company to recover upon any claim for any loss under the above insuring clause IV unless brought after the amount of such claim or loss shall have been fixed and rendered certain * * * by final judgment against the assured. * * *"
In the schedule, under the printed words, "Use to Which Vehicle is to be Put," the statement is inserted in typewriting, "Private Use and Business Calls." Stannard was an employee of the Turnbull Company, at a weekly salary. He was its chief bookkeeper, and he went out on the road as its salesman and to make collections a part of the time — about three weeks out of four.
The Turnbull Company purchased and kept the coupé for a "salesman's car"; Stannard was its only salesman, and had used it almost exclusively. Besides using it in and about the business of his employer, it was his practice to use it in and about his own private affairs, at times with the knowledge and permission of the officers of the Turnbull Company, and at other times without their knowledge or permission. When any of these officers were at or about the office of the company, and he wanted to use the car for pleasure, to make personal calls, visits, etc., he would ask their permission, which was always given. Sometimes, several times, quite often, often on Sunday, it would happen that none of the officers would be at the office when he would want to use the car for his personal accommodation. Then it was his practice to use it without their knowledge or permission, always telling them of it later, and as they never reprimanded him, or even objected, their silence was their approval. And so his taking the car and driving to the cemetery, for his personal accommodation, on the occasion of the accident to the plaintiff Ronan, without having obtained specific permission from his employer, was nevertheless using the car with the permission of the Turnbull Company, implied by their usage and common practice. Thus he was "legally operating" and "legally responsible for the operation" of the car at the time of the accident, and the defendant's policy "extended" and is "available" to him in accordance with provision II supra. Dickinson v. Maryland Casualty Co., 101 Conn. 369, 125 A. 866, 41 A.L.R. 500; Slavens v. Standard Acc. Ins. Co. (C.C.A.) 27 F.2d 859.
As the "named assured," the Turnbull Company, was not liable to the plaintiff Ronan for Stannard's negligence in injuring her, and as Stannard was the only person liable to her, there is no other person entitled to insurance under the provisions and conditions of clause II supra, and consequently the defendant can require no direction in writing from the "named assured," as provided in clause II when more than one other person is entitled to the protection of this insurance contract.
Section 2, subdivision III, of Act No. 155 of the Acts of the Vermont Legislature 1919, p. 163, is made a part of the policy by indorsement attached thereto. The third paragraph of this subdivision provides:
"The insolvency or bankruptcy of the insured shall not release the company from the payment of damages for injury sustained or loss occasioned during the life of the policy, and in case of such insolvency or bankruptcy an action may be maintained by the injured person (or claimant) against the company under the terms of the policy, for the amount of any judgment obtained against the insured not exceeding the limits of the policy." Francis v. London Guarantee, etc., Co., 100 Vt. 425, 138 A. 780; Sanders v. Insurance Co., 72 N.H. 485, 57 A. 655, 101 Am. St. Rep. 688; Lombard v. Company, 78 N.H. 110, 97 A. 892; Capelle v. Company, 80 N.H. 481, 120 A. 556.
Therefore let a decree be entered for the plaintiff Ronan to have and recover of the defendant the amount of the insurance policy ($5,000), and the plaintiff's legal costs as taxed and allowed by the Supreme Court of Vermont at $527.81, in accordance with the provision in clause III, supra, and interest on both these amounts, $5,527.81, from the 15th day of November, 1927, that being the day the Supreme Court of Vermont granted her an execution against Standard, and the time when the defendant should have paid the plaintiff Ronan in accordance with the provisions of its policy. Let the plaintiffs recover their costs.
David E. Porter, Harry W. Witters, and Jutten A. Longmoore, all of St. Johnsbury, Vt., for appellant.
Searles, Graves Waterman, of St. Johnsbury, Vt., for appellee.
Before L. HAND, SWAN, and MACK, Circuit Judges.
Decree affirmed on opinion below.