American Employers' Ins. Co. v. Brock

• Decision Date: 22 October 1948
• Docket Number: No. 13943.,13943.
• Parties: AMERICAN EMPLOYERS' INS. CO. v. BROCK.
• Court: Texas Court of Appeals

215 S.W.2d 370

AMERICAN EMPLOYERS' INS. CO. v. BROCK.

No. 13943.

Court of Civil Appeals of Texas. Dallas.

October 22, 1948.

Rehearing Denied November 19, 1948.

Appeal from District Court, Dallas County; Sarah T. Hughes, Judge.

Action by Mrs. Clara Christine Brock, individually, and as executrix of the estate of F. A. Brock, deceased, against the American Employers' Insurance Company for reimbursement under a motor vehicle liability policy. From the judgment, defendant appeals.

Judgment affirmed.

R. T. Bailey, of Dallas, for appellant.

Johnson, Rembert & Marshall, of Dallas, for appellee.

LOONEY, Justice.

The statement below, in our opinion, is sufficient for an understanding of the nature of the case, but during the discussion additional pertinent facts will be stated. At the request of appellant, the trial court filed elaborate findings which are before us unchallenged.

The record discloses that on June 20, 1946, Mrs. Lona Livingston fell into a sidewalk elevator shaft in front of De George's Restaurant on Commerce Street in the City of Dallas and sustained personal injuries. Mrs. Livingston first made claim for damages for her injuries against De George's Restaurant and, after that claim was disposed of, made claim against Mrs. Brock, the appellee, who thereupon requested American Employers' Insurance Company, the appellant, to take over the claim and dispose of same; but this, for the reason hereinafter stated, the company refused to do. Mrs. Brock then settled with Mrs. Livingston, paying her $1,200, and incurred in connection therewith an attorney's fee of $250. This suit was to recover those amounts from the insurance company, Mrs. Brock contending that the claim of Mrs. Livingston was within the purview of an automobile insurance policy which the company previously had issued to F. A. Brock, the deceased husband of appellee. The trial was before the court without a jury and resulted in a judgment in favor of Mrs. Brock against the company for the full amount sued for. The company timely perfected this appeal.

The following provisions of the policy are brought under review: "Coverage A — bodily injury liability — to pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law for damages, including damages for care and loss of services, because of bodily injury, including death at any time resulting therefrom, sustained by any person or persons, caused by accident and arising out of the ownership, maintenance, or use of the automobile." Item 5 of the policy provides: "The purposes for which the automobile is to be used are * * * commercial." Paragraph I under "Conditions" of the policy provides in part as follows: "* * * (b) The term `commercial' is defined as use principally in the business occupation of the named Insured, as stated in Item 1, including occasional use for personal, pleasure, family, and other business purposes. (c) Use of the automobile for the purposes stated includes the loading and unloading thereof." (S.F. 65)

In appellant's first point of error the contention is made that "The injuries sustained by Mrs. Livingston did not grow out of either the loading or unloading of the truck being operated by Mrs. Brock's employees, and, therefore, were not within the purview of the contract issued by American Employers' Insurance Company to F. A. Brock, deceased."

The parties agree that the question presented, that is, the proper construction to be given the "loading and unloading" clause of the Texas Standard Form of the Public Liability Policy, is of first impression in this State. However, the construction of this clause of the liability policy has been the subject of considerable litigation in other states and many of these cases are annotated and discussed in 160 A.L.R. 1259 under the title "Risks within `loading and unloading' clause of automobile liability insurance policy." The cases are in two categories: Those following the "coming to rest" theory and those following the "complete operation" theory. Respectable authorities will be found sustaining each of these theories. Appellant contends for the application of the "coming to rest" theory, while appellee relies upon the "complete operation" theory.

Typical of the reasoning of decisions supporting appellant's contention is that of the Supreme Court of Pennsylvania in Ferry Bros. v. Protective Indemnity Co., 155 Pa.Super. 266, 38 A.2d 493, 494. The facts show that the accident complained of grew out of and was incidental to the reasonable and necessary preparation by the driver before the truck could be loaded. The insurance company contended that the accident was not within the loading and unloading clause of the contract. In sustaining this contention, among other things, the court said: "To bring the accident within the `loading and unloading' clause of the policy there must be a connection between the accident and the use of the vehicle insured. The vehicle must have been directly connected with the work of loading; or it must have been an active factor in the operation. * * * in the present case neither the ashes, nor the container in which they were carried, nor the insured truck was the cause of, or involved in, the accident. The instrumentality that caused the accident was the cellar door. This was merely a convenience preparatory to loading, and was not, under the facts, included in the process of loading the truck." To the same effect see Stammer v. Kitzmiller, 226 Wis. 348, 276 N.W. 629, by the Supreme Court of Wisconsin. Also Franklin Co-op. Creamery Ass'n v. Employers' Liability Assurance Corp., 200 Minn. 230, 273 N.W. 809, by the Supreme Court of Minnesota.

On the other hand, typical of the reasoning of courts that construe the "loading and unloading" clause of these contracts according to the "complete operation" theory, is that by the Supreme Court of the State of Utah in Pacific Automobile Ins. Co. v. Commercial Cas. Ins. Co., 108 Utah 500, 161 P.2d 423, 424, 160 A.L.R. 1251. The court said in part: "* * * The so-called `loading and unloading' clauses in insurance contracts have been frequently considered and construed by the courts and various rules have been stated. Practically all authorities are agreed that in such insurance contracts the phrase `including loading and unloading' is a phrase of extension. It expands the expression `the use of the truck' somewhat beyond its connotation otherwise so as to bring within the policy some acts in which the truck does not itself play any part. It deals with a period when the truck itself is at rest, but the goods are being moved onto or off the truck. American Oil & Supply Co. v. United States Casualty Co., 18 A.2d 257, 19 N.J.Misc. 7. * * * Some courts apply the `coming to rest' rule or doctrine. Briefly stated, that rule is that `unloading' includes the process of removing or lifting the articles from the truck up to the point where the article is first set down or ceases in the movement which took it from the truck. This doctrine is well stated in Stammer v. Kitzmiller, supra, a case very similar to the one at bar. * * * Other courts have adopted what may be called the complete operation rule. Tersely, this includes as `loading' or `unloading' the entire process involved in the movement of the articles from the place where insured's employees find the articles which are to be moved by truck, to the place where the employees of insured turn them over to the party to whom they are to make delivery. This rule is well stated by the Montana court in State [ex rel. Butte Brewing Co.] v. District Court, 110 Mont. 250, 100 P.2d 932, 934, a case differing from the instant one only in the fact that the person injured was standing on the door of the manhole when it was raised. * * * The necessary causal relationship between the use of the truck and the accident is apparent in the fact that the accident occurred in the course of making a commercial delivery in which delivery the use of the truck was an active factor or element. We conclude that the proper rule of construction of policies such as here involved is that the mission, or transaction, or function being performed by the insured's employees at the time of the accident is the controlling element in determining whether the situation from which the accident occurred is included in loading and unloading. The job being performed here, that part of the insured's business functioning at the time of the accident was that of making a proper commercial delivery. * * *"

It would lengthen the opinion unduly to quote from other cases to the same effect; hence they are cited without quotation, as follows: Maryland Casualty Co. v. Tighe, D.C., 29 F.Supp. 69, affirmed by Ninth Circuit Court of Appeals, 115 F.2d 297; State ex rel. Butte Brewery Co. v. District Court, 110 Mont. 250, 100 P.2d 932 (by Supreme Court of Montana); Schmidt v. Utilities Ins. Co., 353 Mo. 213, 182 S.W.2d 181, 154 A.L.R. 1088 (by Supreme Court of Missouri); B & D Lines v. Citizens Cas. Co., 181 Misc. 985, 43 N.Y.S.2d 486, and Washington Assurance Corp. v. Maher, Pa., 31 Del.Co.R. 575. Also see Connecticut Indemnity Co. v. Lee, 1 Cir., 168 F.2d 420.

The fact that construction of the "loading and unloading" clauses of these insurance contracts has provoked such a conflict in the decisions of the courts as to establish two rules or theories of construction, that is, the "coming to rest" theory and the "complete operation" rule or theory, shows inescapably that the language employed is considered ambiguous and susceptible of more than one construction; hence should be interpreted liberally in favor of the insured and strictly against the insurer who wrote the policy. This doctrine, well settled in this State, is stated in 24 Tex. Jur., p. 705, sec. 29, as follows: "It is a settled principle of insurance law, laid down in a host of decisions that language of a policy which...