Southern Farm Bureau Cas. Ins. Co. v. Logan, 41445

Decision Date04 April 1960
Docket NumberNo. 41445,41445
Citation119 So.2d 268,238 Miss. 580
PartiesSOUTHERN FARM BUREAU CASUALTY INSURANCE CO. v. Thomas LOGAN, a Minor, by Next Friend, Myrtle Logan.
CourtMississippi Supreme Court

Crawley & Brooks, Kosciusko, for appellant.

P. L. Douglas, Starkville, for appellee.

GILLESPIE, Justice.

Southern Farm Bureau Casualty Insurance Company, appellant, hereinafter called insurer, issued an automobile liability policy to Mrs. Annie Mae O'Brian covering a certain truck owned by Mrs. O'Brian, hereinafter called insured. This policy was in force when Thomas Logan, a minor, appellee, was injured in an accident arising out of the use of said truck.

On September 17, 1958, appellee Logan filed suit in the Circuit Court of Oktibbeha County against Mrs. Annie Mae O'Brian in which he alleged that on July 25, 1958, he was riding in the insured truck when it was being driven by a servant of insured when he was injured as a result of the negligent operation of said truck by insured's servant. The declaration alleged that appellee, plaintiff therein, was loading milk cans on and off of said truck and that plaintiff got out of said truck and unloaded certain milk cans from the truck and into a barn and was injured as he attempted to re-enter the truck because insured's servant negligently accelerated said truck as Logan attempted to re-enter it.

After this suit had been on file for about three weeks, and on October 10, 1958, insurer wrote Logan's attorney that it had been advised of the suit by Logan against insured, and that Logan was an employee of insured, and the policy provided no coverage for bodily injury to any employee of the insured while engaged in the employment of the insured. The letter stated that the exclusion in the policy relieved insurer of any liability arising from the accident. The letter then stated that without waiving any of the company's defenses under the terms of the policy, the insurer would make a settlement on the basis of medical expenses and actual lost time. The letter then stated: 'If the case cannot be settled on the basis set out above, we will immediately notify Mrs. O'Brien and Jimmy O'Brian (who was sued with Mrs. O'Brian) that we will furnish them no defense for this suit that you have filed.' A copy of this letter was sent to insured.

On October 15, 1958, Logan's attorney rejected the offer of settlement and made what amounted to a counter offer. On October 21, 1958, insurer wrote the insured as follows:

'This is to advise that Mr. P. L. Douglas, the attorney who has filed a suit in behalf of Thomas Logan, against you and your son, Jimmy, has declined to accept the proposal offered in our letter of October 10, 1958. Under the circumstances we have no alternative but to advise you that we cannot furnish you or your son, Jimmy, a defense in the law suit styled Thomas Logan, a minor by next friend, Myrtle Logan v. Annie Mae O'Brian and Jimmy O'Brian now pending in the Circuit Court of Oktibbeha County. Under the circumstances I would suggest that you make the necessary arrangements to employ personal counsel to protect your interest and the interest of your son.'

On October 21, 1958, judgment by default was entered in the Circuit Court of Oktibbeha County in favor of Logan against insured for $19,500 and costs. This judgment was entered the day insurer wrote insured that the former would not defend the suit. It is not shown when insured received this letter but it necessarily was after the default judgment had been rendered. Insured lived on a rural route.

The present suit was filed by Logan against insurer to recover the amount of the judgment, alleging therein the matters already stated. The policy provides for suit by an injured party against the insurer after having secured a judgment against the insured.

Insurer filed its answer admitting all allegations of fact in the bill of complaint and alleging that prior to October 1, 1958, its agent orally notified insured that Logan was an employee of insured and he was not covered by the policy, and that insurer was not liable for any injuries suffered by Logan; that insurer would offer no defense in said suit, and insured should protect herself by employing her own attorney to defend said suit. Insurer included in its answer a special plea alleging that Logan was an employee of insured at the time he was injured, and the policy provided in the exclusions as follows: 'This policy does not apply: (d) under Coverage A, (1) to bodily injury to any employee of the insured while engaged in the employment of the insured.' The answer alleged that the policy provided no protection to insured and Logan could not recover on the policy because of said exclusion.

On motion of Logan, the chancery court struck insurer's answer and granted an interlocutory appeal to settle the principles of the case.

The motion to strike the answer admits the truthfulness of the facts alleged in the answer. It is a proper method of testing the legal sufficiency of the answer. Mississippi Chancery Practice, Griffith, Par. 372, page 355.

I.

The first question for our decision is whether the insurer was obligated under its policy to defend the insured in the suit filed by Logan. There are two reasons why the insurer was obligated to defend the insured in this suit, each of which, independent of the other, is sufficient to require insurer to defend the Logan suit.

(1) The insuring agreements contained in the policy in question are in part as follows:

'Insuring Agreements

'1. Liability

'Coverages A, Bodily Injury and B, Property Damage

'1. To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages:

'Coverage A because of bodily injury sustained by any person, and

'Coverage B because of injury to or destruction of property, caused by accident and arising out of the ownership, maintenance or use of the automobile, including loading and unloading thereof.

'2. To defend any suit against the insured for such damages even if groundless, false or fraudulent; but the Company may make such settlement of any claim or suit as it deems expedient; * * *.'

The exclusion relied upon by insurer is as follows:

'Exclusions

'This Policy Does Not Apply:

'(d) under Coverage A, (1) to bodily injury to any employee of the insured while engaged in the employment of the insured; (2) to any obligation for which the insured or any company as his insurer may be held liable under any workmen's compensation, unemployment compensation or disability benefits law, or under any similar law; * * *.'

The applicable parts of the policy in the present suit are substantially the same as those in the case of United States Fidelity & Guaranty Company v. Cook, 181 Miss. 619, 179 So....

To continue reading

Request your trial
40 cases
  • Great Northern Nekoosa v. Aetna Cas. and Sur. Co.
    • United States
    • U.S. District Court — Northern District of Mississippi
    • 8 Abril 1996
    ...Putman v. Insurance Co. of North America, 673 F.Supp. 171, 176 (N.D.Miss. 1987) (citing Southern Farm Bureau Casualty Insurance Co. v. Logan, 238 Miss. 580, 119 So.2d 268, 271 (1960)); see also State Farm Mutual Automobile Ins. Co. v. Taylor, 233 So.2d 805, 808 (Miss.1970).1 "Only if the pl......
  • Gordon v. Nationwide Mut. Ins. Co.
    • United States
    • New York Court of Appeals Court of Appeals
    • 1 Junio 1972
    ...Ind. Co., 390 S.W.2d 558 (C.A., Mo.); Comunale v. Traders & Gen. Ins. Co., 50 Cal.2d 654, 328 P.2d 198; Southern Farm Bur. Cas. Ins. Co. v. Logan, 238 Misc. 580, 119 So.2d 268; Myers v. Farm Bur. mut. Ins. Co., 14 Mich.App. 277, 165 N.W.2d 308; American Fid. Fire Ins. Co. v. Johnson, 177 So......
  • Loftin v. U.S. Fire Ins. Co., 39340
    • United States
    • Georgia Court of Appeals
    • 17 Abril 1962
    ...193 N.E. 558; United States Fidelity & G. Co. v. Yazoo Cooperage Co. (1930) 157 Miss. 27, 127 So. 579; Southern Farm Bureau Casualty Ins. Co. v. Logan, 238 Miss. 580, 119 So.2d 268; Goldberg v. Lumber Mut. Casualty Ins. Co. (1947), 297 N.Y. 148, 77 N.E.2d 131; Lee v. Aetna Casualty & Surety......
  • Moeller v. American Guar. and Liability Ins. Co.
    • United States
    • Mississippi Supreme Court
    • 5 Septiembre 1996
    ...duty to furnish a legal defense, whether the claim later proves to be meritorious or not. Southern Farm Bureau Cas. Ins. Co. v. Logan, 238 Miss. 580, 119 So.2d 268, 270-71 (1960) ("The insurer's ultimate liability is not the criterion for determining whether the insurer is obligated to defe......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT