Georgia Cas. & Sur. Co. v. Turner
| Citation | 86 Ga.App. 418,71 S.E.2d 773 |
| Decision Date | 20 June 1952 |
| Docket Number | No. 34049,No. 1,34049,1 |
| Court | United States Court of Appeals (Georgia) |
| Parties | GEORGIA CASUALTY & SURETY CO. v. TURNER et al |
Syllabus by the Court.
1. The purpose of the Declaratory Judgment Act of 1945, Ga.L.1945, p. 137, as declared in section 13 thereof, is to settle and afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations, and the act is to be liberally construed.
2. The allegations of the petition as amended showed an actual justiciable controversy between the plaintiff insurance company and the defendants, and presented a case for a declaratory judgment as to the rights of the parties, and the court erred in sustaining the general and special grounds of demurrer.
3. To entitle one to a declaratory judgment it is not necessary that he show in his petition that his rights are as he claims them to be; but, if an actual justiciable controversy is presented, he is entitled upon a hearing to a declaratory judgment as to his rights whether or not his contention be correct.
Georgia Casualty & Surety Company filed in the Superior Court of Bibb County, Georgia, a petition seeking a declaratory judgment, and naming as defendants the following: Clyde Barrett, Flanders Mitchell, Mrs. Charles E. Turner, and Mrs. Mary E. Bond. The petition alleged substantially the following: On July 14, 1950, the plaintiff issued to Clyde Barrett, doing business as B. & L. Service Station, a policy of automobile liability insurance, No. 24,215, effective for the period of one year beginning July 14, 1950, covering a described Ford pick-up truck, a copy of the policy being attached to the petition and made a part thereof. On May 29, 1951, the said Clyde Barrett rented the Ford truck to the defendant Flanders Mitchell. On the said date and while the truck was in the possession and control of Flanders Mitchell, it was involved in an accident in which Mrs. Bond and Mrs. Turner claim to have received personal injuries. Clyde Barrett had no interest whatsoever in the mission on which Flanders Mitchell was engaged at the time. He was not an agent or employee of Clyde Barrett, and was not engaged in the business of Clyde Barrett, but was operating the truck by virtue of having leased it from Clyde Barrett. On June 14, 1951, Mrs. Bond, and Mrs. Turner each filed an action in the Superior Court of Bibb County against Flanders Mitchell, seeking damages on account of injuries alleged to have been sustained by the negligence of Flanders Mitchell in running the truck into them on the sidewalk on Second Street in the City of Macon. The suits were served on Flanders Mitchell, and he and Clyde Barrett have called upon the plaintiff insurance company and are demanding that it defend the said suits and also pay off any judgments within the limits of the policy which might be obtained in such suits. On June 14, 1951, shortly after it had been notified of the alleged injuries to Mrs. Bond and Mrs. Turner, the insurance company entered into a reservation-of-rights agreement with Clyde Barrett and Flanders Mitchell, a copy of which was attached to the petition as Exhibit 'B.' In the agreement the company agreed to undertake the investigation of the alleged collision between the truck driven by Flanders Mitchell and Mrs. Turner and Mrs. Bond, and in the course of the investigation it became necessary to file defenses in the suits, brought by the two ladies, for the purpose of securing additional time in which to complete the investigation, and the company filed defensive pleadings in such suits. The company has now reached the definite conclusion that it is not liable under the terms of its policy to continue the defense and is desirous of withdrawing from the defense in each case. If it defends the cases, it will incur additional expense of at least $1000, and if there is no coverage under its contract of insurance then in equity and in good conscience it should not be called upon to make this outlay of money. It is faced with a dilemma, namely: if it withdraws without protection of the court as to its rights as herein sought, it faces the hazard of having a large verdict rendered, which it may be called upon to pay under the terms of its policy; and, on the other hand, if it does not withdraw, it will incur the expense of defending the suits in two trials at a cost of at least $1000.
The policy of insurance contained, among other provisions, the following: 'Exclusions: This policy does not apply: (a) while the automobile is used as a public or livery conveyance, unless such use is specifically declared and described in this policy and premium charged therefor.'
The renting of the truck to Mitchell was not an isolated occurance or instance, but Clyde Barrett had frequently rented the truck to various parties for a monetary consideration, all of which was unknown to the plaintiff. The above-quoted provision of the policy relieves by its terms the plaintiff from the payment of any damage which may be assessed against Clyde Barrett in either or both of the pending suits hereinbefore mentioned, for the reason that the truck was being operated as a public or livery conveyance at the time of the accident and alleged injuries to Mrs. Turner and Mrs. Bond. If the truck at the time and place involved as covered by the said contract of insurance, the plaintiff is obligated by its terms to defend the said suits and to pay damages assessed within the limits of the policy; and an actual controversy exists between the plaintiff and Flanders Mitchell and between the plaintiff and Clyde Barrett with respect to the vital and material question of the coverage afforded by the said contract of insurance. The plaintiff has no adequate remedy at law, and this is a proper case in which the court should declare the rights and liabilities of the parties to the end that the plaintiff may be afforded relief from uncertainty and insecurity with respect to its rights, status, and future conduct and may know whether or not the insurance contract hereinbefore described imposed upon the plaintiff the duty of defending the pending suits and the further duty of paying damages, if any, which may be assessed against the said Mitchell, and this court should take jurisdiction of the controversy and declare the rights of the interested parties.
The plaintiffs in the pending suits are also interested in the controversy and are necessary and proper parties to this proceeding, in order that they may be bound by the judgment of the court in this matter; and it is necessary that they be enjoined from further prosecuting the pending suits until the rights of the parties be declared. If they should prevail in the pending actions, they would be unable to collect their judgments from Flanders Mitchell because he is insolvent, and both of them have threatened, in this event, to bring suits against the plaintiff here.
The prayers were: (a) That the court declare the plaintiff's rights, status, and other legal relations with each of the defendants in connection with the policy of insurance and the pending suits; and the plaintiff specifically desires that the court enter a judgment declaring that the plaintiff is not bound by the terms of the policy to defend any of the pending suits or to pay any damages which may be assessed in any one or more of the suits. (b) That Mrs. Mary S. Bond and Mrs. Charles E. Turner be enjoined from further prosecuting the pending suits and from taking any further steps in connection therewith until the final adjudication by the court of the matters here set forth. (c) For process. (d) For such further relief as may be meet and proper.
The court granted a temporary injunction as prayed.
The defendants, Mrs. Bond and Mrs. Turner, filed general and special grounds of demurrer, which were sustained, and the exception here is to that judgment.
Martin, Snow & Grant, Macon, for plaintiff in error.
Miller, Miller & Miller, Macon, for defendants in error.
WORRILL, Judge (after stating the foregoing facts).
The petition in the present case was brought under the Declaratory Judgment Act of 1945, Ga.L.1945, p. 137, Code, Ann.Supp., § 110-1101 et seq., seeking also under the same act, Code, Ann.Supp., § 110-1102, to enjoin a tort action pending the rendition of the desired declaratory judgment. The trial court granted the injunction, and the only question in the case, transferred to this court by the Supreme Court, Georgia Casualty & Surety Co. v....
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