Associated Indemnity Corporation v. Manning, 8393.

• Decision Date: 22 September 1937
• Docket Number: No. 8393.,8393.
• Citation: 92 F.2d 168
• Parties: ASSOCIATED INDEMNITY CORPORATION v. MANNING et al.
• Court: U.S. Court of Appeals — Ninth Circuit

92 F.2d 168 (1937)

ASSOCIATED INDEMNITY CORPORATION v. MANNING et al.

No. 8393.

Circuit Court of Appeals, Ninth Circuit.

September 22, 1937.

N. A. Pearson, of Seattle, Wash., for appellant.

Before DENMAN, STEPHENS, and HEALY, Circuit Judges.

DENMAN, Circuit Judge.

Appellant insurance company had issued its liability policies to appellee, doing business as Manning Motors, insuring him against liability with respect to accidents sustained by reason of the conduct of insured's business and as limited by Item 4 of the declarations:

"Item 4. The Insured's business operations are that of Automobile Sales Agency, Storage Garage, Electric Garage, Service Station, Repair Shop, or Open Air Parking Station, `Automobile Sales Agency.'"

Appellee J. M. Manning was also president of the Manning Fuel Oil Company, a corporation doing business at the same address.

On the morning of the automobile collision claimed to create the liability of appellant, one of the fuel oil corporation's trucks was delivering oil at a certain place. J. M. Manning sent one of his garage mechanics to notify the oil truck driver to make a delivery at a different destination. While returning to his garage employment from this errand, the garage mechanic, Fleshman, had a collision in which the claimants were injured, one so severely that she died.

At the time of the commencement of the appellant's action, claimants were demanding of defendants Manning, doing business as Manning Motors, and the Manning Fuel Oil Company, a corporation, that they reimburse claimants for the damages and injuries sustained in the collision, and threatening suits for said injuries. The assured, Manning, doing business as Manning Motors, and as president of Manning Fuel Oil Company, made demand on appellant that it defend the threatened suits and pay said judgment if and when rendered.

Each truck owned by the Manning Fuel Oil Company, a corporation, was covered by a liability policy issued by appellant. The trucks were not involved in the collision, and appellant had no policy insuring generally the Manning Fuel Oil Company, a corporation, from liability in the conduct of its business.

Appellant brought the action for the purpose of determining its rights and other legal relations under the circumstances. Appellant requested an adjudication that it was under no obligation to defend the suits; that it should not have to pay any judgments if any rendered as result of the suits; and that claimants should be enjoined from prosecuting their suits against the assureds until the matter had been litigated to its conclusion in the federal court. Its suit was based upon the proposition that the garage mechanic, at the time of the collision, was under no service of Manning doing business as Manning Motors, liability in the course of which was the limitation of appellant's coverage, but was solely on the business of Manning Fuel Oil Company, a corporation, and that it had denied liability on that ground and refused to comply with the insured's demand for payment, thereby creating an "actual controversy."

Appellant's action was asserted to be authorized by the federal declaratory judgment statute as amended, 28 U.S.C.A. § 400, as follows:

"(1) In cases of actual controversy except with respect to Federal taxes the courts of the United States shall have power upon...