Central Surety & Ins. Corporation v. Caswell

• Decision Date: 10 August 1937
• Docket Number: No. 8473.,8473.
• Citation: 91 F.2d 607
• Parties: CENTRAL SURETY & INS. CORPORATION v. CASWELL et al.
• Court: U.S. Court of Appeals — Fifth Circuit

91 F.2d 607 (1937)

CENTRAL SURETY & INS. CORPORATION v. CASWELL et al.

No. 8473.

Circuit Court of Appeals, Fifth Circuit.

August 10, 1937.

T. J. Blackwell, of Miami, Fla., for appellant.

John W. Prunty, John A. Bouvier, Jr., and John M. Murrell, all of Miami, Fla., for appellees.

Before FOSTER, HUTCHESON, and HOLMES, Circuit Judges.

FOSTER, Circuit Judges.

Appellant brought this suit in equity against Margaret V. Caswell, Fred Caswell, her husband, Leah Lorenz, Clifford Lorenz, her husband, Louise O'Donnell, a feme sole, and Francis Carter, a minor, seeking a declaratory judgment under the provisions of the Act of March 3, 1911, as amended, (28 U.S.C.A. § 400). The bill alleges diversity of citizenship and sufficient amount involved to give the district court jurisdiction. By other allegations the following material facts are pleaded:

Appellant issued a policy of liability insurance covering a passenger automobile owned by Margaret V. Jones, who afterwards married Fred Caswell, to indemnify her against loss for damages caused to others by the negligent operation of the said automobile, up to the amount of $10,000. Under provisions of the policy appellant is obligated to defend any suits brought against the insured for damages so caused and to pay any judgments recovered, to the extent of the indemnity stipulated. Under an exception in the policy the car was not covered if at the time of an accident it was being used for carrying passengers for compensation.

The insured left Miami, Florida, operating the car herself, on a trip to New York City, carrying as passengers the four persons last named as defendants. An accident occurred on June 13, 1936, in Dade county, Florida, and the said four passengers were seriously injured. The insured notified appellant that the passengers were her gratuitous guests; that the accident was caused by her own negligence; and that they were making demands upon her for payment of damages. The insured is urging said persons to prosecute their claims; they are contending that appellant is obligated to pay their damages; they intend to bring suits against Margaret V. Caswell and, after recovering verdicts, to collect the judgments from appellant by garnishment or other proceedings. The insured has demanded that appellant pay the claims or defend the suits, if brought, and pay any judgments recovered, within the limits of the policy.

Relying upon information furnished by the insured, appellant made a settlement with Louise O'Donnell for $2,000. Later, appellant learned that the passengers were being transported for compensation and therefore it was not liable under the policy.

The prayer was for judgment requiring Margaret V. Caswell and Louise O'Donnell to make restitution of the amount paid the latter; for judgment declaring the policy did not cover damages occasioned by the accident; and for an injunction pendente lite restraining the prosecution of suits for damages.

A guardian ad litem was appointed for the minor, Francis Carter, and service made on him. The record does not show that subpoena was served on Louise O'Donnell or that she has appeared in any way in the suit.

Motions were filed on behalf of Margaret V. Caswell and her husband, Leah Lorenz and her husband, and Francis Carter, to dismiss the suit on the ground, among others, that there was no actual controversy pending between plaintiff and said defendants. Judgment was entered denying an injunction and dismissing the bill as to all the defendants except Margaret V. Caswell and her husband.

We do not know the reasons for judgment from the record, but we assume the District Court reached the...