Banks v. Associated Indemnity Corporation

• Decision Date: 19 May 1947
• Docket Number: No. 11822.,11822.
• Citation: 161 F.2d 305
• Parties: BANKS v. ASSOCIATED INDEMNITY CORPORATION et al. TRAVELERS INS. CO. v. BANKS et al.
• Court: U.S. Court of Appeals — Fifth Circuit

161 F.2d 305 (1947)

BANKS v. ASSOCIATED INDEMNITY CORPORATION et al. TRAVELERS INS. CO. v. BANKS et al.

No. 11822.

Circuit Court of Appeals, Fifth Circuit.

April 30, 1947.

Rehearing Denied May 19, 1947.

COPYRIGHT MATERIAL OMITTED

Harry V. Booth, of Shreveport, La., for Margaret Janice Banks.

Hollingsworth B. Barret, of Shreveport, La., for Travelers Ins. Co.

Elias Goldstein, of Shreveport, La., for Associated Indemnity Corporation.

Before McCORD, WALLER, and LEE, Circuit Judges.

LEE, Circuit Judge.

William O. Banks died as a result of injuries sustained in a collision on December 28, 1944, near Crew Lake, Louisiana, between a sedan owned by G. H. Neighbors, of Shreveport, Louisiana, and a truck owned by V. Frank Lynn Grocery Company, Inc. The Neighbors car was covered by a policy of general liability automobile insurance issued by the Associated Indemnity Corporation of San Francisco, California, in a sum not to exceed $25,000, and the grocery company truck was covered by a similar policy issued by The Travelers Insurance Company of Hartford, Connecticut, in a sum not to exceed $10,000. Margaret Janice Banks, wife of the decedent, individually and in behalf of her minor child, brought this suit for damages against the Associated Indemnity Corporation and against The Travelers Insurance Company under Act 55 of the Legislature of Louisiana for the year 1930, which permits an injured person to sue directly an insurer without joining the insured. The plaintiff alleged that the accident was due solely to the concurrent negligence of Neighbors' employee driving his automobile and of the grocery company driver in charge of its truck, both of whom were acting in line of duty. The prayer was for judgment against both defendants in solido¹ for herself and for her minor child in the sum of $29,360.

Associated in its answer alleged that the negligence of the truck driver caused the collision; that at the time of the collision Banks was in the employ of Neighbors and was in the course of his employment; and that, since Associated had issued to Neighbors a workmen's compensation policy, in accordance with Louisiana law, it was not liable under the general liability policy but was liable under the compensation policy. Travelers in its answer, after asserting the accident was caused by the negligence of Neighbors' employee, further alleged that on the day of the accident Banks and the other members of a derrick building crew were returning to their homes in Shreveport on account of a suspension of work because of bad weather, and that the trip in question was for their convenience and pleasure. It also set up certain cross-claims and third party complaints which were abandoned on this appeal.

At the close of the evidence, Associated filed a motion for a directed verdict. This was overruled, and the jury returned a verdict against both defendants for $25,000; and, as between the defendants, provided that $10,000 of the said amount should be paid by Travelers and $15,000 should be paid by Associated.² Associated then filed a motion for a judgment notwithstanding the verdict, based upon its claim that, since Banks was killed in the course of his employment, as insurer of Neighbors under the workmen's compensation law of Louisiana, its liability was fixed by that law. A further basis was that its general liability automobile policy issued to Neighbors provided that said policy did not apply if at the time of an accident those injured were subject to the provisions of the Louisiana compensation law. The motion for judgment notwithstanding the verdict was sustained, and the verdict against Associated in the sum of $15,000 was set aside. From the judgment thereupon entered, Mrs. Banks, for herself and her minor child, and Travelers prosecuted this appeal.

The issues raised on the appeal are: (1) Was Banks injured in the course of his employment so as to bring him under the compensation law of Louisiana? (2) if not, was the ratio of liability fixed in the verdict against the two insurance companies, that is, for $10,000 to Travelers and $15,000 to Associated, correct? Neither Travelers nor Associated on this appeal questions the jury's finding that the joint negligence of the insureds' employees caused the collision. The question of negligence, therefore, is not before us.³

Here, Mrs. Banks and Travelers contend that the conflicting evidence as to whether Banks was injured in the course of his employment presented a question which was properly submitted to the jury; Associated contends that the evidence shows conclusively that Banks was injured in the course of his employment. Travelers further contends that, with the verdict restored, an in solido obligation in Louisiana binds both obligors, as between themselves, to divide the in solido debt; and, as the limit of its obligation under its policy was $10,000, its in solido obligation was that sum, with respect to which it and Associated are solidarily bound, the amount due Mrs. Banks beyond that sum being the sole obligation of Associated under its policy for $25,000. From this Travelers argues that, as between it and Associated on the $10,000 solidary obligation, each was bound for one-half, or $5,000, and that the verdict was incorrect in assessing $10,000 to it and $15,000 to Associated; and that the correct assessment was $5,000 to it and $20,000 to Associated. In the alternative, Travelers urges that, since the total insurance of the two companies was $35,000, the $25,000 verdict in favor of Mrs. Banks should have been assessed to it in the proportion of ten thirty-fifths (10/35) of $25,000 and to Associated in the proportion of twenty-five thirty-fifths (25/35) of $25,000.

Banks and several other workmen, all residents of Shreveport, Louisiana, were employed by Neighbors as rig-builders for the construction of an oil well derrick in De Soto County, Mississippi. The agreement provided that they should be paid at the rate of so-much per day while working on the job and allowed a half-day's pay for the trip over and a half-day's pay for the trip back when the work was completed, and that Neighbors should furnish transportation each way. The journey over was made on December 15. Weather conditions became so bad by the 28th that work was suspended on that date at 2:30 p. m. As members of the crew, including Banks, had been away from home during the Christmas holidays, they expressed a desire to go home and to remain there until the weather cleared and work could be resumed. All the members of the crew who testified stated that they approached Neighbors' foreman relative to the trip and he contacted Neighbors; that Neighbors instructed his foreman to drive them to Shreveport in Neighbors' car in order that the crew might return to their homes until working conditions were better, and also instructed him to stop at Neighbors' office in Bossier City, across the Red River from Shreveport, in order that the men might receive their pay. On the trip to Shreveport the collision resulting in Banks' death occurred.

The pertinent question is whether on this trip the employees were serving their own interests or whether, because Neighbors agreed to return them home in his car driven by his foreman, with the understanding that they would return when weather permitted work to be resumed, they remained in the scope of his employment until delivered to their homes. The opinion of the trial judge on the motion for judgment non obstante veredicto indicates that he thought the return trip home was made in the mutual interest of employer and employees; that the bad weather created a situation harmful to both; that the employees were paying expenses while receiving no wages; that the employer was required to pay for a half-day's time if they worked any fraction of a day and for a full day's time if they worked four hours or more; and that, therefore, both parties were concerned with the weather conditions. The court said:

"There is some difference in the testimony as to who first suggested the trip back to Caddo Parish pending the clearing of the weather and likewise some difference as to why it was made, that is, as to whether the employees wanted to go home because they had been away during the Christmas holidays and were paying substantial amounts for expenses while receiving no wages; or whether it was for the interest of the employer, who had attempted work on the derrick more than once but had quit because of the weather, yet had to pay the day's wages of his employees if any part thereof was worked.

* * * * * *

"* * * it is not disputed that attempts had been made to carry out the undertaking between employer and employees, as originally contemplated, but the intervention of weather in which work could not be performed made it impossible, to the point that it was mutually agreed it should be discontinued until the weather cleared and further that the employer would, in the meantime, return the employees to their homes until conditions improved so that the contract could be completed. * * *"

The presence of mutuality of interest is material only as a factor to be weighed along with the other evidence in determining whether the contract was amended. The amendment proved, the reason or motive which prompted the parties to enter into it would become wholly immaterial.⁴ Neighbors, as a witness, denied that he had any interest in the return trip. He stated that it made no difference to him whether they remained at the job, went home, or went elsewhere; at another time he stated that "until they the crew members got home and got their checks" they were on the pay roll. Moreover, there was evidence that it was in his interest to complete the derrick speedily. The men, if on the job, would be available for work at any time; at home, 200 miles away, they would not be.

Typical of the testimony by the crew members is the following: Whitt, a member of the building crew, with respect...