Drake v. Pennsylvania Threshermen & Farmers' Mut. Cas. Ins. Co.

• Decision Date: 10 January 1957
• Docket Number: 6 Div. 12
• Citation: 92 So.2d 11,265 Ala. 444
• Parties: Amos DRAKE v. PENNSYLVANIA THRESHERMEN & FARMERS' MUTUAL CASUALTY INSURANCE COMPANY.
• Court: Alabama Supreme Court

Page 11

92 So.2d 11

265 Ala. 444

Amos DRAKE v. PENNSYLVANIA THRESHERMEN & FARMERS' MUTUAL CASUALTY INSURANCE COMPANY.

6 Div. 12.

Supreme Court of Alabama.

Jan. 10, 1957.

Lipscomb, Brobston, Jones & Brobston, Bessemer, for appellant.

London & Yancey and Jas. E. Clark, Birmingham, for appellee.

MERRILL, Justice.

The appellant, Amos Drake, was injured on February 5, 1952, while riding as a passenger in a bus being operated by the New Deal Riding Club. He procured a judgment against said Club in the amount of $2,500 and sought to enforce it by a third party action under a liability insurance policy issued to the Club by the appellee, Pennsylvania Threshermen & Farmers' Mutual Casualty Insurance Company.

The complaint was in one count with a copy of the insurance policy attached as an exhibit. The pleadings progressed to defendant's rejoinder, the effect of which was that prior to the date of plaintiff's injury, this court had affirmed a decree of the Circuit Court of Jefferson County, in Equity, holding a permit issued to New Deal Riding Club by the Alabama Public Service Commission to be null and void; and therefore, that on February 5, 1952, the New Deal Riding Club was not operating as a common carrier under any valid permit or certificate issued to it by the Alabama Public Service Commission.

To this rejoinder, plaintiff interposed a demurrer which was overruled and because of the adverse ruling of the court, plaintiff took a nonsuit and appealed to this court.

At the inception of the policy of insurance, the New Deal Riding Club was operating under a certificate of convenience and necessity issued by the Alabama Public Service Commission pursuant to the Alabama Motor Carrier Act of 1939, Code 1940, T. 48, § 301(1) et seq. On October 15, 1951, in The Case of Ala. Public Service Comm. v. Higginbotham, 256 Ala. 621, 56 So.2d 401, this court affirmed (and on January 31, 1952, denied application for rehearing) the decree of the circuit court referred to in defendant's rejoinder.

The policy of insurance which the appellee issued to the New Deal Riding Club was to insure against liability arising from the operation of two vehicles, one a 1946 Chevrolet bus, and the other a 1942 Ford bus. Any vehicle used by the insured but not owned by it was also covered specifically by the policy while it was being used as a 'temporary substitute' for either of the two described buses.

The bus involved in the accident was a 1947 Studebaker bus which was owned and regularly operated by the New Deal Riding Club and, therefore, did not come within the terms of the policy.

As a part of the policy of insurance, there was an attached endorsement to the effect that the policy was 'written in pursuance of and is to be construed with an Act of the Legislature of Alabama approved July 9, 1940, known as the 'Alabama Motor Carrier Act of 1939.'' A portion of that Act as amended, Code 1940, T. 48, § 301(16), provides:

'No certificate or permit shall be issued to a motor carrier or remain in force, and no motor carrier subject to the provisions of this article shall engage in any operation on any highway of this state, unless such carrier complies with such reasonable rules and regulations as the commission shall prescribe governing the filing and approval of surety bonds, policies of insurance, qualifications as a self-insurer or other securities or agreements, in such reasonable amounts as the commission may require, conditioned to pay, within the amount of such surety bonds, policies of insurance, qualifications as a self-insurer or other securities or agreements, any final judgment recovered against such motor carrier for bodily injuries to or the death of any person resulting from the negligent operation, maintenance, or use of motor vehicles under certificate or permit, or for loss or damage to property of others.'

If the New Deal Riding Club had been operating under a certificate of convenience and necessity, the insurer would have been liable to pay a judgment procured against the insured involving a vehicle other than those specifically described in the policy. Fidelity & Casualty Co. of New York v. Jacks, 231 Ala. 394, 165 So. 242.

The appellee does not contend that the policy of insurance was not in force on February 5, 1952. It concedes that the policy was in effect, but insists that the policy cannot be aided by Alabama Motor Carrier Act because the insured was not operating 'under certificate or permit' at the time of the accident. The pivotal inquiry therefore is whether the voiding of the certificate limits the insurer's liability to the terms of the policy. By overruling plaintiff's demurrer to defendant's rejoinder, the court below has held that it does, and we think it was correct in so holding.

As already stated, the insurance policy would not, by its terms, cover the Studebaker bus which was involved when plaintiff was injured. Paraphrasing what this court said in the Jacks case, supra, we are not impressed with the suggestion that this bus should be treated as a 'temporary substitute' for either of the other buses described in the policy. We also note that appellant does not now insist that the Studebaker bus was a 'temporary substitute.' Coverage of the bus can only result from reading into the policy T. 48, § 301(16), as amended, as provided in the Alabama Public Service Commission endorsement. That brings us to a consideration of what the statute actually says. It requires that the policy of insurance be 'conditioned to pay * * * any final judgment recovered against such motor carrier for bodily injuries to or the death of any person resulting from the negligent operation * * * of motor vehicles under certificate or permit, or for loss or damage to property of others.'

It seems to us that the Legislature made it perfectly clear that the coverage in such policies should be on vehicles 'under certificate or permit' and it is conceded by all parties that there was no valid certificate or permit in existence applying to the New Deal Riding Club or any of its vehicles when appellant's injury occurred. Some statutes and ordinances in other jurisdictions provide that the insurance...