CE Carnes & Co. v. EMPLOYERS'LIABILITY ASSUR. CORP.
| Decision Date | 13 February 1939 |
| Docket Number | No. 8934.,8934. |
| Citation | 101 F.2d 739 |
| Parties | C. E. CARNES & CO., Inc., et al. v. EMPLOYERS' LIABILITY ASSUR. CORPORATION, LIMITED, OF LONDON, ENGLAND. |
| Court | U.S. Court of Appeals — Fifth Circuit |
J. W. Hawthorn, of Alexandria, La., Charles A. McCoy, Alvin O. King, Sam H. Jones, and Richard A. Anderson, all of Lake Charles, La., and N. Curtiss Petitjean, of Rayne, La., for appellants.
Ed Rightor and W. H. Sellers, both of New Orleans, La., for appellee.
Before FOSTER, HUTCHESON, and McCORD, Circuit Judges.
On August 18, 1935, Employers' Liability Assurance Corporation, Ltd., of London, England, issued its policy of automobile liability insurance covering a motor truck owned by C. E. Carnes & Company, Inc., a Louisiana corporation. The limit of liability in the policy was $20,000 for bodily injuries and $5,000 for property damage. The policy was renewed in identical form on August 18, 1936, and the renewal policy was in force and effect on October 21, 1936, when the accident occurred out of which this litigation arises.
Item one of the insurance policy in question states that the occupation or business of the assured is "Handling Farm Machinery, Crane Fixtures & Paints." Item six states the purpose for which the automobile is to be used as "Commercial." Further the policy states,
On October 21, 1936, Carnes & Company placed on its truck a removable metal tank containing five hundred gallons of liquid butane gas. The assured's employees, in unloading the tank from the truck, broke off the valve cock. The liquid escaped, vaporized quickly and formed a gas heavier than air. The gas sought the ground and spread through the town of Crowley, Louisiana. It became ignited and killed and injured a number of people and destroyed and damaged much property.
Claims for personal injuries and property damage were made against C. E. Carnes & Company, Inc. This company in turn called upon the Insurance Company to compensate for damage done by the gas. The Insurance Company declined to assume liability, contending that the insurance of the truck did not extend to and cover the hauling and unloading of butane gas.
Plaintiff, Insurance Company, brought this suit (Judicial Code, § 274d, 28 U.S.C. A. § 400) for a declaratory judgment against its assured, C. E. Carnes & Company, Inc., and against the other defendants who were injured or whose property had been damaged by the explosion of the butane gas. It alleged that a controversy had arisen as to its duty to defend claims against the assured resulting from the explosion and prayed for a judgment declaring its "rights, obligations and other legal relations * * * under its policy."
The case was heard on its merits and the court below found that the insurance policy in question did not cover damage and loss which emanated from the hauling and unloading of butane gas. A judgment was there entered which decreed that no obligation rested upon the Insurance Company to compensate the defendants under the policy, and the court enjoined them from "asserting any rights against the plaintiff herein under said policy arising out of said accident." From this judgment C. E. Carnes & Company, Inc., and others, have appealed to this court.
Appellants challenge the right of the insurance company to have a declaratory judgment. They contend that there is a lack of diversity of citizenship, and they seek to set this case apart from such other cases of like import for the reason that by Louisiana Law, Act 253 of 1918, amended by Act 55, of 1930, the insurance company would not be a necessary party defendant in a suit for damages.
For this insurance company to have a declaratory judgment against the defendants these elements of federal jurisdiction must exist and coexist: First, there must be a diversity of citizenship. Second, there must be, between the parties litigant, an actual controversy. Third, the amount involved must exceed the sum of $3,000.
The insurance company being a foreign corporation and each of the defendants citizens of Louisiana, there is a diversity of citizenship. By Louisiana law each of the defendants have an interest in this insurance policy and in the outcome of this suit. The amount involved is not, as appellants contend, what individual defendants claim by way of damages. This is not a tort action at all and the question of negligence vel non is not before us. The amount in controversy is the value of that which is sought to have declared free from doubt — the policy for $25,000. The Louisiana Statutes providing that one bringing a suit for damages may sue the tort-feasor separately, or bring his suit against the tort-feasor and the insurance company, or against the insurer alone, have no argumentative force here.
Within the meaning of the Declaratory Judgment statute there is here a real, actual controversy admitting of relief. All the elements of federal jurisdiction were clearly shown and the court below had jurisdiction. Ætna Life Ins. Co. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617, 108 A.L.R. 1000; Central Surety & Ins. Corp. v. Caswell et al., 5 Cir., 91 F. 2d 607; Farm Bureau Mut. Auto. Ins. Co. v. Daniel et al., 4 Cir., 92 F.2d 838; Carpenter et al. v. Edmonson, 5 Cir., 92 F.2d 895; Ætna Casualty & Surety Co. v. Yeatts et al., 4 Cir., 99 F.2d 665; Davis v. American Foundry Equipment Co., 7 Cir., 94 F.2d 441, 115 A.L.R. 1486; Stephenson v. Equitable Life Assurance Society, 4 Cir., 92 F.2d 406; Travelers Ins. Co. v. Young, D.C., 18 F.Supp. 450.
On the merits of the case the appellants bring to the fore and stress two...
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