American Auto. Ins. Co. v. Fulcher
| Decision Date | 17 February 1953 |
| Docket Number | No. 6530.,6530. |
| Citation | 201 F.2d 751 |
| Parties | AMERICAN AUTO. INS. CO. v. FULCHER. |
| Court | U.S. Court of Appeals — Fourth Circuit |
James G. Martin, IV, Norfolk, Va., for appellee and cross-appellant.
Harry E. McCoy, Jr., Norfolk, Va., (Hughes, Little & Seawell, Norfolk, Va., on the brief), for appellant and cross-appellee.
Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.
These are cross-appeals from a judgment of the United States District Court for the Eastern District of Virginia in favor of the plaintiff administrator in an action on a liability insurance policy issued by the defendant. The action was originally instituted in the Circuit Court of Norfolk, Virginia, but was removed to the District Court.
On August 7, 1946, Barbara M. Fulcher was killed in an automobile accident in the City of Norfolk, Virginia, when the car in which she was a passenger was struck by an automobile owned by Fred Green and operated by his brother, George Green. At the time of the accident, Fred Green was incarcerated in the Norfolk City Jail. Earlier in the evening George Green, who lived in Baltimore, Maryland, had visited the home of his uncle, who lived in Norfolk and with whom Fred resided. Upon learning of his brother's predicament, George conceived the idea of going down to the City Jail to see if he could effect Fred Green's release. For this purpose, he and several friends who were with him employed Fred's car, which was parked in front of his uncle's house.
Being unsuccessful in their efforts to free Fred Green, or even to see or talk to him at the Jail, George and his friends decided to visit the home of Fred's prosecutrix in an effort to induce her to withdraw her charge against him. This mission also proved unsuccessful and George Green suggested that they drive to his mother's home in Norfolk County to arrange for her presence at Fred's trial, which was scheduled for the following morning. At this point, George first became the driver of his brother's car which theretofore had been driven by one of his friends, and it was while on this journey that the collision occurred.
Subsequently plaintiff, as administrator of the estate of Barbara M. Fulcher, instituted suit in the Circuit Court of the City of Norfolk against George and Fred Green to recover damages for the death of his intestate. The case was tried before a jury on April 25, 1950. At the conclusion of the plaintiff's evidence, the trial court sustained a motion by defendants' counsel to strike the evidence as to Fred Green, and the jury returned a verdict for $15,000 in favor of the plaintiff against George Green only. Judgment was entered on the verdict and has now become final.
After execution on this judgment had been returned "no effects," the plaintiff administrator initiated this action to recover from the defendant insurance company, on the theory that George Green was an additional insured under the terms of the liability insurance policy issued to Fred Green. The defendant entered a plea of res adjudicata and denied that at the time of the accident George Green was driving Fred Green's car with permission of the owner. The District Judge held that the judgment of the State Court in favor of Fred Green was not res adjudicata of the issue before the District Court and found that at the time of the accident George Green was operating his brother's car with the implied permission of its owner. Accordingly, judgment was entered against the defendant for $15,000 and costs, with interest from the date of the judgment. Despite plaintiff's request, the District Court refused to allow interest from the date of the State Court's judgment, April 25, 1950, and denied plaintiff his costs in the State Court.
From this judgment both parties have appealed, and the questions presented thereby are:
(1) Is the judgment in favor of the owner Fred Green in the State Court res adjudicata as to the liability of the defendant in this Court?
(2) Was George Green operating the automobile of Fred Green at the time of the accident with the permission, express or implied, of the owner?
(3) Should the District Court allow to plaintiff administrator interest on the $15,000.00 judgment of the State Court from April 25, 1950, until paid, and his costs in that Court?
These questions will be considered in the order given. The Virginia Statutes applicable to the instant controversy and pertinent to the resolution of the first two issues raised on appeal, provide:
Code of Virginia (1950) Section 38-238.
"* * * No such policy shall be issued or delivered in this State, to the owner of a motor vehicle, by any corporation or other insurer authorized to do business in this State, unless there shall be contained within such policy a provision insuring such owner against liability for damages for death or injuries to person or property resulting from negligence in the operation of such motor vehicle, in the business of such owner or otherwise, by any person legally using or operating the same with the permission, express or implied, of such owner." (Italics ours.)
Code of Virginia (1950) Section 46-492.
The Court below rejected the plea of res adjudicata for three reasons:
(1) The parties to the State Court action were different; the defendant insurance company was not a party to the State Court proceedings.
(2) The issues were different in the State Court action.
(3) The State Court action was based on tort, whereas this action is based on an insurance policy or contract.
In view of our conclusion, we consider it necessary to discuss only the second of these reasons.
In order to recover against Fred Green in the State Court, it was necessary for the plaintiff to show that at the time of the accident, George Green, who was driving the automobile, was acting as Fred Green's agent. The action there, as to Fred Green, was based upon a theory of common law agency, and the plaintiff was required to prove that George Green was driving the car with the consent of Fred Green and upon the business of Fred Green. Both of these concomitant elements of agency must have concurred to establish Fred Green's personal liability in that action.
As the District Judge noted in his opinion, the action in the State Court "was dismissed as to Fred Green because at the time of the accident George Green was not using the automobile by and with the consent of the said Fred Green and upon the business of the said Fred Green." (Italics ours.) By striking the plaintiff's evidence as to Fred Green, the State Court did not indicate whether that evidence had failed of proof on either or both of these elements. The effect of this ruling was simply that the plaintiff's evidence was insufficient to support a jury finding that both of these elements together had been proven.
The instant action, unlike that in the State Court, is not one which seeks to establish the vicarious personal liability of a principal upon a theory of common law agency. The case at bar is a simple action on a contract, and to recover against the defendant insurance company, it is not incumbent upon the plaintiff to prove an affirmative consent on the part of Fred Green to the use of his car, or that the car was being used on his business. The only issue before the District Court was whether or not at the time of the accident, George Green was driving Fred Green's car with his permission, express or implied, within the terms of the contract and the meaning of the applicable Virginia statutes.
We think the observation of the Supreme Court of Virginia in Gilmer v. Brown, 186 Va. 630, 636, 44 S.E.2d 16, 18-19, is particularly pertinent to this question:
It is clear that the issues in the two actions here in question are not identical. The evidence available to the plaintiff in the State Court was insufficient to show the high degree of relationship between owner and driver amounting to agency. In the District Court agency was not an issue, and the burden of proof on the plaintiff to show permission, express or implied, which was the only essential to a recovery under the contract of insurance, was considerably reduced. Consequently, the very same evidence which proved inadequate to establish the personal liability of Fred Green in the State Court, might well prove sufficient to fix liability upon the defendant insurance company in the District Court.
The differences between the mere permissive use by a third person of an owner's car with the consent of the owner and the use of the car by a third person as the agent of the owner can be made clear by an example. Thus A lends his car to B for a trip to be made solely for B's benefit. On the trip, C is hurt by B's negligent operation of the car. Clearly here, B is an additional insured under A's motor liability policy; and equally clear is it that B is not A's agent and A incurs no...
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