Commercial Cas. Ins. Co. v. Tri-State Transit Co. of La., Inc.

• Decision Date: 11 January 1941
• Citation: 146 S.W.2d 135,177 Tenn. 51
• Parties: COMMERCIAL CASUALTY INS. CO. v. TRI-STATE TRANSIT CO. OF LOUISIANA, Inc.
• Court: Tennessee Supreme Court

146 S.W.2d 135

177 Tenn. 51

COMMERCIAL CASUALTY INS. CO. v. TRI-STATE TRANSIT CO. OF LOUISIANA, Inc.

Supreme Court of Tennessee.

January 11, 1941

Appeal from Chancery Court, Shelby County; L. D. Bejach, Chancellor.

Action by the Commercial Casualty Insurance Company against the Tri-State Transit Company of Louisiana, Incorporated, for declaratory judgment relating to the complainant's liability under an automobile liability policy. From judgment dismissing the bill, the complainant appeals.

Affirmed.

Winchester & Bearman, of Memphis, for appellant.

McDonald McDonald & Brown, of Memphis, for appellee.

DeHAVEN Justice.

This is a suit brought under the Tennessee Declaratory Judgment Law. Code,§ 8835 et seq. The chancellor sustained defendant's demurrer to the bill and dismissed the same. Complainant has appealed to this court and assigned errors.

The substance of the bill is that complainant, a New Jersey corporation, domesticated in Tennessee, is engaged in writing various forms of casualty insurance in Tennessee, Arkansas and elsewhere; that it issued to defendant an automobile liability policy and on August 1, 1938, while this policy was in force and effect, a bus owned and operated by defendant and covered by the policy, became involved in an accident in the State of Arkansas, resulting in personal injuries to one W. Guy O'Neal and damage to his automobile, and also in personal injuries to one McNabb who was riding with O'Neal as a passenger. That thereafter a suit was filed in the circuit court of Scott County, Arkansas, by W. Guy O'Neal and McNabb against the Tri-State Transit Company of Louisiana, Inc., defendant here, and at the November term 1939, a judgment was rendered in favor of these plaintiffs against defendant in the amount of $1,750.

It is recited in the bill that the automobile policy issued to the defendant contained a condition that in the event of an accident written notice should be given the insurance company as soon as practicable; that such notice shall contain reasonably obtainable information respecting the time, place and circumstances of the accident, the names and addresses of the injured and all available witnesses. That the policy also contained the provision that no liability of the insurer on account of the accident under the policy could attach unless the insured complied with the above-mentioned provision.

The bill proceeded to aver that complainant received no notice of any kind from defendant about the accident in question from the date of its occurrence on August 1, 1938, until three months thereafter when it was apprized of the accident by the attorney for one of the persons injured in the accident; that being thus advised, complainant communicated with defendant and was advised by the defendant that it had no knowledge of the accident or of the contentions made by either of the parties alleged to have been injured and, therefore, could not report it; that being thus advised, the complainant proceeded "to handle the matter," after giving written notice of its position to the defendant and of the fact that if it was later proven that defendant, its agents or employees, did have knowledge of the accident and were in a position to report it that such omission constituted a breach of the policy contract.

It is further alleged in the bill that it developed in the course of the trial of the suit in Scott County, Arkansas, that the defendant did know of the accident at the time of its occurrence and deliberately and carelessly failed to report the same to complainant in accordance with the condition of the policy. That as soon as complainant ascertained that defendant did have knowledge of this accident and failed to report the...