Pennsylvania Threshermen & FM Cas. Ins. Co. v. Owens, 7233.
| Decision Date | 07 November 1956 |
| Docket Number | No. 7233.,7233. |
| Citation | 238 F.2d 549 |
| Parties | PENNSYLVANIA THRESHERMEN AND FARMER'S MUTUAL CASUALTY INSURANCE COMPANY, Appellant, v. Emily S. OWENS, Appellee. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Joseph R. Young, Charleston, S. C. (Hagood, Rivers & Young, Charleston, S. C., on brief), for appellant.
Joseph W. Cabaniss, Charleston, S. C. (Hope, Willcox & Cabaniss, Charleston, S. C., on brief), for appellee.
Before SOPER and SOBELOFF, Circuit Judges, and BRYAN, District Judge.
The question to be determined on this appeal is whether or not the appellant insurance company has been relieved of its obligation on a contract of automobile liability insurance because of a breach of the policy by the assured.
Pennsylvania Threshermen and Farmer's Mutual Casualty Insurance Company issued its policy to James F. Harter, an automobile owner living in Charleston, South Carolina. With his permission, Robert C. Wood, also of Charleston, was driving the car in the outskirts of that city on March 7, 1954, when it came into collision with another automobile in which the appellee, Emily S. Owens, was a passenger. She suffered injuries and sued both Harter and Wood, owner and driver, respectively, of the insured automobile.
Wood conferred with the insurance company shortly after the accident, and gave it a written statement. In April he assisted the lawyers by verifying an answer to the suit filed against him. At that time he was told that the case could come to trial the following October term, but of course no definite date could then be given him. When the case was about to be reached on the calendar in November, however, the attorneys for the insurance company learned that Wood was no longer in Charleston and could not be located. They gave notice to the plaintiff that for this reason they would defend the suit as to Wood with reservation of rights. The insurance company filed a copy of this notice in court, and attached thereto an affidavit of Wood's wife, who had gone to Indiana to live, stating that she did not know where he was and had no means of communicating with him. The insurance company's lawyers contacted Wood's mother and pastor, but neither could furnish information as to his whereabouts or the means of communicating with him.
Just before the case was called for trial the attorneys for the defendants moved for a continuance and attached a copy of the statement obtained by the adjuster for the insurance company from Wood immediately after the accident. The motion for a continuance, however, was refused.
At the trial the plaintiff's attorneys, as part of their evidence, read to the jury Wood's statement, which the defendant had filed with the motion for continuance. The trial judge held that this would occupy the same position as any other testimony that the plaintiff offered. At the close of the plaintiff's case, the attorneys for the defendants moved for a non-suit as to both defendants, and the motion as to J. F. Harter was granted, no agency having been shown. No other testimony was offered on behalf of Wood, and the jury returned a verdict against him for $8,000.00 actual damages.
Being unable to collect from the absent judgment debtor, Mrs. Owens made demand on the insurance company for payment. When it denied obligation, Mrs. Owens brought suit in the United States District Court against the company on the theory that the policy issued to Harter, the named assured, covered Wood as well, for the benefit of anyone who might recover against either of them.
The insurance company defended on the ground that Wood had failed to cooperate in his defense as required by the policy. The case was tried on a stipulation of facts before the District Judge sitting without a jury, and judgment was entered in favor of the appellee. This appeal followed.
The appellant and appellee are in agreement that Wood is covered as an additional insured under the terms of the policy, which contains the following provisions:
"No action shall lie against the company unless, as a condition precedent thereto, the insured shall fully comply with all of the terms of the policy * * *.
* * * * * *
"The insured shall cooperate with the company and upon the company's request, shall attend hearings and trials and shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of suits."
The problem of non-cooperation has a dual aspect: not only what the assured failed to do, but what the insurer on its part did to secure co-operation from an apathetic, inattentive, or vanished policy holder, must be considered. Liability insurance is intended not only to indemnify the assured, but also to protect members of the public who may be injured through negligence. Indeed, such insurance is made mandatory in many states. It would greatly weaken the practical usefulness of policies designed to afford public protection, if it were enough to show mere disappearance of the assured without full proof of proper efforts by the insurer to locate him. See Tuder v. Commonwealth Casualty Company, 163 A. 27, 10 N.J.Misc. 1206.
Whether or not Wood failed to co-operate with the insurer and thereby relieved it of liability is to be determined by the law of South Carolina, where the contract was made. The District Judge relied chiefly upon the case of Meehan v. Commercial Casualty Insurance Co., 166 S.C. 496, 165 S.E. 194, 196. There, as here, the company showed that it was unable to communicate with the insured, who had disappeared. The Supreme Court of South Carolina, applying the dual aspect of non-cooperation above-mentioned, held that the facts were not sufficient to show failure of the assured to co-operate. The facts there and the facts here are, of course, not identical, but they are closely parallel. It would serve no useful purpose to prolong this opinion with an elaborate comparison between the two factual situations. The ...
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