Clements v. Preferred Acc. Ins. Co.

• Decision Date: 28 May 1930
• Docket Number: No. 8700.,8700.
• Citation: 41 F.2d 470,76 ALR 17
• Parties: CLEMENTS v. PREFERRED ACC. INS. CO. OF NEW YORK.
• Court: U.S. Court of Appeals — Eighth Circuit

76 ALR 17, 41 F.2d 470 (1930)

CLEMENTS v. PREFERRED ACC. INS. CO. OF NEW YORK.

No. 8700.

Circuit Court of Appeals, Eighth Circuit.

May 28, 1930.

John H. Atwood, of Kansas City, Mo. (Harris, Reinhardt & Russell, of Chicago, Ill., and Atwood, Wickersham, Hill & Chilcott and Elon J. Levis, all of Kansas City, Mo., on the brief), for appellant.

Lowell R. Johnson and Charles M. Miller, both of Kansas City, Mo. (Henry M. Shughart, of Kansas City, Mo., on the brief), for appellee.

Before BOOTH and GARDNER, Circuit Judges, and SANBORN, District Judge.

SANBORN, District Judge.

In May, 1921, James P. Newell lived in Chicago, Ill. He had a sixteen year old son, David, an automobile, and a policy of casualty insurance written by the Preferred Accident Insurance Company of New York, No. A. D. 538044. This policy contained the following provisions:

"The Preferred Accident Insurance Company of New York Does Hereby Agree

"(1) To indemnify, within the limits of liability expressed in Condition `L' hereof, the Assured named and described in Statement No. 1 of the Declarations forming part hereof, against loss by reason of the liability imposed by law upon the Assured for damages on account of bodily injuries, including death at any time resulting therefrom, accidentally suffered or alleged to have been suffered while this Policy is in force by any person or persons, not employed by the Assured, by reason of the ownership, maintenance or use within the limits of the United States of America, or Canada, of any of the automobiles enumerated and described in Statement No. 5 of said Declarations;

"(2) To defend, in the name and on behalf of the Assured, any suits, even if groundless, brought against the Assured to recover damages on account of such happenings as are provided for by the terms of the preceding paragraph; * * *

"Subject to the Following Conditions:

"A. This Policy does not cover * * * loss from liability on account of injuries or death caused or suffered by reason of the ownership, maintenance or use of any automobile under any of the following conditions:

"1. While being driven or manipulated by any person in violation of law as to age, or if there is no legal age limit, under the age of sixteen (16) years. * * *

"The word `Assured' wherever used in the policy shall include in addition to the Assured named in the policy, any person, firm or corporation riding in or responsible for the operation of the said automobile or automobiles (for the purposes described in the policy) with the permission of said named Assured or (if the named Assured be an individual) with the permission of an adult member of the named Assured's household who is not a chauffeur or a domestic servant; all obligations of the said named Assured, as set forth herein, to be binding upon said person, firm or corporation.

"C. The Assured, upon the occurrence of an accident, shall give immediate written notice thereof, with the fullest information obtainable at the time, to the Company's Home Office at New York, N. Y., or to its duly authorized agent. * * * "The insolvency or bankruptcy of the Assured hereunder shall not release the company from the payment of damages for injuries sustained or loss occasioned during the life of this policy, and in case execution against the Assured is returned unsatisfied in an action brought by the injured, or his or her personal representative in case death results from the accident, because of such insolvency or bankruptcy, then an action may be maintained by the injured person or his or her personal representative against the Company under the terms of this policy, for the amount of the judgment in the said action not exceeding the amount of this policy."

Mr. James P. Newell was the named assured. The policy covered his automobile. It was in full force during the month of May, 1921. On May 18, 1921, while David Newell was alone driving the car, he ran into and injured the appellant. He did not notify his father of the accident. David knew nothing of the policy, and his father knew nothing of the accident. The company received no notice from any one at that time or until nearly two years thereafter. The first knowledge that the father had that the appellant claimed to have been injured by his car was in or about March, 1923. He wrote the company on April 17, 1923, that his son had recently told him of the accident.

On May 16, 1923, the company advised Mr. Newell that it would assume no obligations under the policy to his son, because it had not received the notice provided for by the policy; that if suit was filed against his son, he would be obliged to defend it at his own expense, and pay his own attorneys and any judgment which might be rendered against him; that, so far as James P. Newell was concerned, the company would waive the breach of the provision requiring notice, and treat the accident as one covered by the policy, but only on condition that it should not be deemed to have assumed any obligation to David Newell. David was also notified that the company would assume no obligation toward him.

The appellant brought a suit to recover for personal injuries in the circuit court of Jackson county, Mo., against both James P. Newell and David Newell. The company, by its attorneys, defended the suit for James P. Newell alone. The result was a judgment against David Newell for $5,000. Execution upon the judgment was returned unsatisfied. The appellant then commenced this suit against the company under its policy. The company asserted two defenses: That notice had not been given as required by the policy: and that the accident was not one for which it was liable, since David Newell was driving the car in violation of an ordinance of Chicago which required a driver over sixteen years and under eighteen years of age to be accompanied by an adult. A jury was waived, the case was tried to the court, and the court ordered judgment for the company, holding both defenses good. The appeal was from the judgment.

The appellant asserts that the company was liable to her under the policy regardless of the fact that it had no notice of the accident for twenty-three months after it occurred, and regardless of the fact that the car was being driven in violation of the terms of a city ordinance of Chicago at the time of the accident. She claims that the failure of David Newell to give notice could not affect her right to recover under the policy; that the ignorance of David of the existence of the policy and his...