Central Surety & Ins. Corporation v. Norris
| Decision Date | 18 April 1939 |
| Docket Number | No. 9013.,9013. |
| Parties | CENTRAL SURETY & INS. CORPORATION v. NORRIS et al. |
| Court | U.S. Court of Appeals — Fifth Circuit |
T. J. Blackwell and W. H. Walker, Jr., both of Miami, Fla., for appellant.
M. H. Rosenhouse, of Miami, Fla., for appellees.
Before FOSTER, SIBLEY, and HOLMES, Circuit Judges.
This appeal involves an application of the Declaratory Judgments Act, 28 U.S. C.A. § 400. The petition was brought by Central Surety & Insurance Corporation to have its non-liability declared upon a policy which promised to pay for Mrs. Mildred M. Norris all sums she shall become obligated to pay for damages resulting from the use of her automobile to persons injured or for property injured or destroyed. The respondents are Mrs. Norris and her husband and eight persons who claimed to have been injured in a collision between her automobile and another, and the owner of the other car which was damaged. Two of the injured persons, Ginger Ruddell and William Rosser, had sued Mrs. Norris and her husband in a State court, each claiming $25,000 damages. Others were threatening suit. The policy bound the Insurance Corporation to defend all such suits. The Corporation claimed that its policy did not apply because an exclusion clause so provided "when the automobile is used * * * for carrying persons for a consideration," in that the automobile was being thus used when the collision happened. Mrs. Norris claimed otherwise, and was calling on the Corporation to defend her. The petition alleged these facts and prayed for a judgment declaring it was not bound to defend any of the suits and not bound to pay any judgments that might be obtained, and that pending the determination of the Insurance Corporation's controversy prosecution of the suits which had been brought be enjoined and the bringing of any others be also enjoined.
The District Judge sustained a motion to dismiss Ruddell and Rosser who had already sued in the State court, and refused to enjoin the other injured persons from suing, but retained the case for trial otherwise. The Insurance Corporation appealing contends that all respondents should have been retained and all should have been enjoined.
The plaintiffs in the two suits pending in the State court should not have been dismissed. While they have not sued the Insurance Corporation, and are not interested in the question whether the Corporation is bound to defend their suits, yet if they win they will, or at least may, implead the Corporation by garnishment or other means to obtain payment of their judgments. In such case the question whether the policy applies will have to be decided again. It would be very inconvenient if the federal court should, these plaintiffs not being parties, decide that the policy does not apply, and the Corporation should not defend the actions and the plaintiffs should recover and then the State court should...
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