241 F.2d 296 (5th Cir. 1957), 16298, United Services Auto. Ass'n v. Russom

Docket Nº:16298.
Citation:241 F.2d 296
Party Name:UNITED SERVICES AUTOMOBILE ASSOCIATION, Appellant, v. James B. RUSSOM et al., Appellees.
Case Date:January 31, 1957
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 296

241 F.2d 296 (5th Cir. 1957)

UNITED SERVICES AUTOMOBILE ASSOCIATION, Appellant,

v.

James B. RUSSOM et al., Appellees.

No. 16298.

United States Court of Appeals, Fifth Circuit.

January 31, 1957

Rehearing Denied Feb. 26, 1957.

Under automobile liability policy clause requiring insurer to pay all interest accruing after entry of judgment and prior to insurer's tender of that part of judgment not exceeding limits of its liability thereon, insurer was required to pay interest on entire judgment, including that portion thereof in excess of its policy limits.

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C. W. Trueheart, San Antonio, Tex., Trueheart, McMillan, Russell & Westbrook, San Antonio, Tex., for appellant.

Josh H. Groce, San Antonio, Tex., Eskridge, Groce & Hebdon, San Antonio, Tex., of counsel, for appellees.

Before CAMERON, JONES and BROWN, Circuit Judges.

JOHN R. BROWN, Circuit Judge.

The insurer, United Services Automobile Association, asserting, as it has frequently but unsuccessfully in these family automobile situations, United Services Automobile Association v. Preferred Accident Insurance Co., 10 Cir., 190 F.2d 404; United Services Automobile Association v. Zeller, Tex.Civ.App., 135 S.W.2d 161, error dismissed, judgment correct, that use of the car was not with permission of the named assured, denies liability outright. But unwilling, perhaps in keeping with the military status of its clientele, to put its trust altogether in this Maginot Line, it, as do so many others, Maryland Casualty Co. v. Southern Farm Bureau Casualty Insurance Co., 5 Cir., 235 F.2d 679; Continental Casualty Co. v. Suttenfield, 5 Cir., 236 F.2d 433, falls back on fluid defenses the effect of which is to say that it is not liable because another is, or partially is. And, like General Insurance Co. of America v. Western Fire & Casualty Co., 5 Cir., 241 F.2d 289, all but forgotten is the accident 1 between Enslen and the Russoms which set these intermeshing cogs in motion. For now concern is whether United's 2 policy protects Enslen

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as an additional assured under the Omnibus Clause; and if it does, whether it must bear the loss altogether or can parcel all or part of it out to Enslen's insurer, Standard, 3 especially since Standard was the moving figure 4 in the disposition of the Ohio suits and, as lender under a loan receipt, 5 is a substantial beneficiary of the jury verdict and judgment below against United.

In the course of its defenses, United takes us on a spirited, nationwide juridical conflicts bus ride as it proceeds from Ohio to Texas, Texas to Ohio, to Kentucky, and back to Ohio stopping en route only long enough to take on, as

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passengers, favorable local jurisprudence but departing quickly lest unfavorable and unwanted principles might come aboard.

Beginning our fast travels, this time to Ohio, United's contention that Enslen did not have Col. Critchfield's permission to use the car is, in this midtwentieth automotive century, almost a feudal recrudescence. For despite the fact that the 1948 Oldsmobile was the Critchfield family car for use by both husband and wife and was loaned from time to time by Mrs. Critchfield with the Colonel's acquiescence to friends and relatives for temporary trips, United insists that the Colonel had never expressly clothed his wife with authority to allow others to use it, and Ohio, as a matter of law, declares that the named assured cannot impliedly authorize his permittee to allow sub-permittees to use the vehicle.

The claim is unsupported by facts and, if Ohio law applies, it does not impose this unrealistic result. Enslen was no stranger to the Critchfield household. Indeed, they had an acute interest in him as did he in the 1948 Oldsmobile. A few days before, about January 9, 1950, he had answered the Critchfield's classified ad offering this car for sale at which time the Colonel allowed him to take it on a short demonstration drive. A day or so later, he returned and, in the Colonel's absence, obtained Mrs. Critchfield's permission to demonstrate the car to his family for a couple of hours. Colonel Critchfield learned of this but never chastised or rebuked his wife or indicated, any more than would any other contemporary husband, that his wife had exceeded the scope of her employment, agency, or authority. Subsequently, a bargain was struck, Enslen gave the Colonel a $250.00 check as a down payment, and the next day Enslen and the Colonel drove the car to a bank to arrange financing. As some delay was encountered in financing, the car was to remain with the Critchfields until the transaction was closed. On the day of the accident, desiring to obtain a new set of tires for this car (he intended to use the Critchfield old tires on his present automobile to enhance its resale value), Enslen sought, and obtained, Mrs. Critchfield's permission to drive the car to Cincinnati to buy some specially advertised tires. On this trip, the accident occurred. When Colonel Critchfield returned a few days later, he reported the accident to United on the assumption that Enslen, using the car under these circumstances, was covered. Use by Enslen was further ratified since title was subsequently transferred formally to Enslen January 26, 1950.

If this does not compel, at least it amply supports, the jury special findings that in lending the car to Enslen, Mrs. Critchfield 'had the implied authority of her husband to permit * * * Enslen to use * * *' it and Enslen's use of the car was '* * * with the implied permission of Colonel Critchfield.'

If Ohio 6 law is the governing standard, then Fox v. Crawford, Ohio App., 80 N.E.2d 187, 189, does not, as United insists, forbid implied authorization. Portions of the opinion perhaps declare that the named assured may only give express permission to a user to allow others to use the car. But from the opinion as a whole, it is clear that all the case stands for is that authority in the permittee to allow use by a sub-permittee will not be implied merely from the original grant of permission by the named assured. But it does not remotely hold

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that authority may not be implied. For it recognizes that it is but a question of agency and '* * * authority to act for * * * (named assured) may be implied, as in other agencies, by acts and conduct, but in order to bind * * * (the named assured) by * * * (the permittee's) acts his authorization must be express, implied or subsequently ratified by * * * (the named assured) * * *'; and in this process, the named assured can '* * * signify her permission to use the insured automobile by a course of conduct, or * * * mere silence to bring * * * (the sub-permittee) within the omnibus clause * * *' so long as '* * * such implied permission * * * (was) by act or conduct of * * * the named insured, and * * * amounted to her intended selection of him as such driver * * *.' And see Marolt v. Lisitz, 94 Ohio App. 298, 115 N.E.2d 169, 175; West v. McNamara, 159 Ohio St. 187, 111 N.E.2d 909.

Ohio then fits in with the general principle that whether the named assured authorized the permittee to allow others to use the vehicle is to be measured in a realistic way in which, once established, implied permission has exactly the same significant force as one expressly made with more elaborate formality. Indiana Lumbermen's Mutual Ins. Co. v. Janes, 5 Cir., 230 F.2d 500; Pennsylvania Thresherman & Farmers' Mut. Cas. Ins. Co. v. Crapet, 5 Cir., 199 F.2d 850; United Services Automobile Association v. Preferred Accident Insurance Co., 10 Cir., 190 F.2d 404; United Services Automobile Association v. Zeller, Tex.Civ.App., 135 S.W.2d 161, error dismissed, judgment correct; Robinson v. Fidelity & Casualty Co. of New York, 190 Va. 368, 57 S.E.2d 93; Drake v. General Accident, 88 Ga.App. 408, 77 S.E.2d...

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