General Tire Co. v. Standard Acc. Ins. Co.

• Decision Date: 12 June 1933
• Docket Number: No. 9576.,9576.
• Citation: 65 F.2d 237
• Parties: GENERAL TIRE CO. OF MINNEAPOLIS v. STANDARD ACC. INS. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

65 F.2d 237 (1933)

GENERAL TIRE CO. OF MINNEAPOLIS v. STANDARD ACC. INS. CO.

No. 9576.

Circuit Court of Appeals, Eighth Circuit.

May 6, 1933.

Rehearing Denied June 12, 1933.

Thomas Gallagher, of Minneapolis, Minn., for appellant.

George Hoke, of Minneapolis, Minn. (George D. McClintock and Cobb, Hoke, Benson, Krause & Faegre, all of Minneapolis, Minn., on the brief), for appellee.

Before STONE, VAN VALKENBURGH, and BOOTH, Circuit Judges.

VAN VALKENBURGH, Circuit Judge.

August 10, 1930, appellant was the owner of four Ford trucks, in the city of Minneapolis, Minn., which were insured by appellee against damages to persons and property. The classification made and premiums charged are thus stated in the policy:

                                         Schedule
                  Location       Factory    Year No. Type of   Premiums
                           Name   Number   Model    Body    Liab.    P.D
                  --------------------------------------------------------
                    The following cars to be used as service cars for
                  first aid to disabled automobiles and towing of same
                  Minneapolis,   Minnesota
                           Ford    98827    1929   A ¾ Ton  75.60    45.00
                  Minneapolis,   Minnesota
                           Ford  1239941    1929   A ¾ Ton  75.60    45.00
                    The following cars to be used for commercial purposes
                  excluding service car use and towing
                  Minneapolis,   Minnesota
                           Ford  1207421    1929   A ¾ Ton  50.40    27.00
                  Minneapolis,   Minnesota
                           Ford  1269112    1929   A ½ Ton  50.40    27.00
                                                          ________________
                           (Roadster
                           Box Attached)            Total $252.00  $144.00
                

Paragraph VIII of the policy provided that the appellee company should not be liable for accidents occurring while such automobiles are "used for any purpose other than specified."

Truck No. 1,269,112, scheduled at the lower premium rate to be used only for commercial purposes, excluding service car use and towing, was mounted with a large ninety-gallon air tank on the box in the back of the cab, and, by lettering, was designated as a "fleet tender." Its principal use was for "checking air and inflating tires on various fleet accounts." "We (appellant) gave service to the fleets of trucks equipped with our tires." Appellant at this time had what may reasonably be termed a service arrangement with the Franklin Creamery Company. As stated by the witness Ludwig, service manager of appellant, "we sold the Franklin Creamery tires and did their repair work. We had some spare tires at our place for some of the Franklin Creamery trucks, and we went out and changed if there happened to be a flat tire." As stated by the witness Nelson, garage foreman for the Franklin Company, "the General Tire Company had charge of the repairing end of it for the entire fleet."

August 10, 1930, the witness Reagan, employee of the appellant, was "taking care of sales and catching service calls that came through. On that day (Sunday) about lunch time I received a long distance call from one of the truck drivers of the Franklin Creamery Company at Elk River, Minnesota. He ordered a new tire and tube, and requested that they be mounted on his spare wheel that we had there in the shop, and then brought out to Elk River to his truck which was evidently on its route there. * * *

"I took this order back to Johnson, the man in the service department, an employee of plaintiff, who was working that day, showed it to him and told him about the delivery he was to make."

Johnson selected the truck in question because it was "gassed up and ready to go." He first looked at the others and found they had no gasoline and were not ready. It is apparent from his testimony that this was regarded as a service trip and that he would have taken one of the other cars, if it had been available, for that reason. On his way back from Elk River, Johnson had an accident, involving two other cars, and resulting in personal injuries and property damage. One car is described as the Gallagher car with five occupants, three named Gallagher, one named Theis, and one Bergin. In the other car were Mrs. Olson, and her son and daughter. Claims for damages were made by the occupants of both cars. This accident was duly reported to the insurance company August 11, 1930. On the same day Clarence A. Stark, an adjuster for the company, was directed by the head of the claim department to "hustle out and settle the Gallagher claims because they were threatening suit." On the night of August 14, 1930, Stark made settlements with all the people in the Gallagher car, issuing checks therefor. At this time he knew the use to which the truck was put, but did not actually know of the restriction in the policy. He learned this several days later and then demanded from appellant payment to cover the checks he had issued in these settlements, stating that the truck in question was not covered by the policy, and that the insurance company would assume no responsibility in the premises. Appellant finally reimbursed the insurance company for these payments and was furnished the Gallagher releases taken by Stark. Meantime, the Olsons had filed suits against appellant in the sum of $20,000, and appellant was compelled to defend these suits because of the refusal of appellee to do so. One of the Gallaghers testified in these actions that her claim, arising from the same accident, had been settled by appellant. Substantial judgments were returned against and paid by appellant. To recover for the damages thus sustained appellant brought suit against appellee in the state court, which action was removed to the District Court for the District of Minnesota, because of diversity of citizenship.

At the conclusion of the evidence both parties moved for directed verdicts. The following colloquy then took place:

"The Court: Well, gentlemen, you both have asked for directed verdicts and that leaves the matter to the disposition of the Court. I will take the matter under advisement and submit a decision. Ladies and gentlemen of the jury, the case has now reached a position where the testimony is all closed and both parties contend that they are entitled to a directed verdict as a matter of law, and that simply leaves the matter for the Court to decide owing to the fact that the parties both waive their right to a jury decision, and the Court will take this matter under advisement and make suitable findings of fact and conclusions of law.

"Mr. Gallagher: (Counsel for plaintiff-appellant) I perhaps did not understand the correct practice in this court. I had in mind that if my motion were denied that I would still have the right to have the questions of fact submitted to the jury. I wish to withdraw the motion and have all the facts in issue submitted to the jury.

"The Court: No, I think I will leave the motions just as they are. I will excuse the jury from any further consideration of this case and they can report to Judge Molyneaux on Monday A. M. at 10 o'clock.

"Mr. Gallagher: Exception. (Jury leaves the courtroom.)

"The Court: Ordinarily if it appeared that counsel had inadvertently deprived himself of the right to have his case go to the jury by making a motion for a directed verdict, I would be inclined to relieve him from the consequences of such inadvertence. But in this case it is so clear to me that the vital controlling issues are practically questions of law, that I feel that this is a matter for the Court and that the jury should be excused.

"Mr. Gallagher: Exception."

The court found the issues for appellee. From the resulting judgment this appeal is taken.

The first contention is that the court erred in refusing to allow plaintiff-appellant to withdraw its motion for a directed verdict. The general rule in federal jurisdictions is that, where each party to an action requests a directed...