Commercial Casualty Ins. Co. v. Humphrey, 689.

• Decision Date: 31 December 1935
• Docket Number: No. 689.,689.
• Parties: COMMERCIAL CASUALTY INS. CO. v. HUMPHREY et al.
• Court: U.S. District Court — Southern District of Texas

13 F. Supp. 174

COMMERCIAL CASUALTY INS. CO. v. HUMPHREY et al.

No. 689.

District Court, S. D. Texas, Houston Division.

December 31, 1935.

King, Wood & Morrow, of Houston, Tex., for plaintiff.

J. G. Davis and Dean & Humphrey, all of Huntsville, Tex., and P. F. Graves, of Houston, Tex., for defendants.

KENNERLY, District Judge.

Plaintiff, the Commercial Casualty Insurance Company (a citizen of New Jersey), issued November 22, 1934, its policy of automobile liability insurance to T. E. Humphrey, Jr. (a citizen of Texas), covering a Plymouth DeLuxe coupe (for brevity called car), belonging to Humphrey, and to be used by him for pleasure and business for a period beginning November 22, 1934, and ending November 22, 1935. While the car was being driven by Humphrey in Fort Bend county, Tex., in this district, on or about July 5, 1935, it collided with a car in which defendants A. P. Pierce, Jr., and W. R. Tull (citizens of Texas) were riding, severely injuring Pierce. Tull was not injured. Alleging an actual controversy between plaintiff and defendants, within the meaning of the Declaratory Judgment Act of Congress of June 14, 1934, as amended August 30, 1935, § 405 (section 400, title 28, U.S.C.A.), plaintiff brings this suit, under such act, against defendants, praying that this court enter a declaratory judgment in accordance therewith, declaring the rights and other legal relations of the parties thereto. The parties by stipulation formally waived the submission of issues of fact to a jury. The witnesses have testified orally, and the facts fairly deducible from the evidence are as follows:

(a) While defendant Humphrey was using the car for business and/or pleasure and driving it along the public highway in Fort Bend county, in this district, on or about July 5, 1935, it collided with a car in which his codefendants, Pierce and Tull, were riding. Pierce was severely injured. Tull was not injured.

(b) The liability of plaintiff under the policy is fixed by the provisions thereof as follows:

"The Company shall be liable only under that insuring agreement of those insuring agreements of the policy for which a specific premium charge is made hereunder.

                "A. Liability for       Limit one person Ten Thousand
                    bodily injuries     and 00/100 Dollars ($10,000.)
                    or death            Limit one accident Twenty
                                        Thousand and 00/100 Dollars
                                        ($20,000.)
                "B. Liability for
                    damage to
                    property of
                    others:             Limit any one accident Five
                                        Thousand and 00/100 Dollars
                                        ($5,000.)."
                

The matter in controversy herein, therefore, is in excess of $3,000, exclusive of interest and costs, and there being diversity of citizenship between plaintiff and all of the defendants, the court has jurisdiction.

(c) The policy also provides as follows:

"The insolvency or bankruptcy of the Assured shall not release the Company from the payment of damages for injuries sustained or loss occasioned during the life of the 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 this Company under the terms of this policy, for the amount of the judgment in the said action not exceeding the amount of this policy."

(d) The policy also provides:

"The Assured, whenever requested by the Company, shall aid in effecting settlements, securing information and evidence, the attendance of witnesses and in prosecuting appeals, but the Assured shall not voluntarily assume any liability or interfere in any negotiation for settlement, or in any legal proceeding, or incur any expense, or settle any claim, except at the Assured's own cost, without the written consent of the Company previously given, except that, as respects liability for personal injuries covered hereunder, the Assured may provide at the Company's expense such immediate surgical relief as is imperative at the time of the accident."

Humphrey has not voluntarily, nor in any other manner, assumed any liability to Pierce or Tull, nor any other person, nor interfered in any negotiation for settlement, nor in any legal proceedings between plaintiff and Pierce, nor others, nor incurred any expense in connection therewith, nor settled any claim in connection therewith. Nor has Humphrey done anything which would serve to release plaintiff from any liability under such clause of such policy.

(e) Said policy also provides that plaintiff shall:

"Investigate at its own cost any accident (to which this policy applies) reported to the Company, and to settle any claim as the Company may deem advisable; and if suit is brought against the Assured on account of such an accident, to defend such suit even if groundless, false or fraudulent, in the name and on behalf of the Assured unless or until the Company shall elect to effect settlement thereof."

(f) It is clear from the evidence that an actual controversy within the meaning of the Declaratory Judgment Act exists between plaintiff, on the one hand, and Humphrey, on the other hand, in that Humphrey is claiming that plaintiff is required to defend any suit or suits brought against him by Pierce or Tull, and that plaintiff is required to pay off any judgment recovered against him by either Tull or Pierce.

(g) In his testimony, defendant Tull says that he was not injured in the collision, and has made, is making, and expects to make, no claim for damages either against Humphrey or plaintiff. In his pleadings, he makes the same statement, disclaiming any interest in the subject-matter of plaintiff's bill. He took no part in the trial (except as a witness), has filed no brief, and is in no way combatting plaintiff's suit. It is clear that there is no actual controversy, within the meaning of such act, between plaintiff and Tull.

(h) Plaintiff alleges in paragraphs IX, X, and XI of its bill as follows:

"IX. The Respondents Pierce and Tull and each of them are now asserting claims and causes of action against the said T. E. Humphrey, Jr., and against this Complainant as the alleged insurer of the said T. E. Humphrey, Jr. for damages on account of personal injuries and damage to property sustained by them and each of them in the accident and collision above mentioned and such Respondents have employed an attorney or attorneys for the purpose of representing them in the prosecution and presentation of such claims and in the bringing of a suit or suits thereon against the said Humphrey, if necessary, and against this Complainant, if necessary.

"X. The Respondents and...