Jordan v. Shelby Mut. Plate Glass & Casualty Co.

• Decision Date: 11 April 1944
• Docket Number: No. 5218,5219.,5218
• Citation: 142 F.2d 52
• Parties: JORDAN v. SHELBY MUT. PLATE GLASS & CASUALTY CO. (two cases).
• Court: U.S. Court of Appeals — Fourth Circuit

142 F.2d 52 (1944)

JORDAN v. SHELBY MUT. PLATE GLASS & CASUALTY CO. (two cases).

Nos. 5218, 5219.

Circuit Court of Appeals, Fourth Circuit.

April 11, 1944.

Langhorne Jones, of Chatham, Va. (Carter & Williams, of Danville, Va., on the brief), for appellants.

Henry M. Sackett, Jr., and Samuel H. Williams, both of Lynchburg, Va., for appellee.

Before PARKER, SOPER, and DOBIE, Circuit Judges.

DOBIE, Circuit Judge.

The facts, about which there is little or no dispute, of these cases (which were heard together), were thus set out by Judge Barksdale in his opinion below, D.C., 51 F.Supp. 240:

"At and before the time of the accident which is the basis of this action, Thomas J. Hurley was employed by a partnership composed of B. J. and F. P. Kavanaugh, trading as `Lynchburg Rendering Company' and doing business in Lynchburg, Virginia. On May 19, 1938, at the direction of his employer, Hurley drove an automobile owned by his employer from Lynchburg to Winston Salem, N. C., for the purpose of checking in a shipment of hides sold by his employer to a purchaser there. This automobile was kept in the possession of the employer and used by Hurley only occasionally when directed to use it for a specific business purpose. He had never used this or other automobiles of his employer for his own purposes, nor had he ever had this car, or others of his employer, in his possession, except while transacting business for his employer. Hurley, as well as other employees, had been instructed by the employer never to use the company's automobiles for pleasure or personal affairs, or to permit any passengers to ride with them. Nevertheless, contrary to these instructions, Hurley, unknown to his employer, took a friend, one Marcotte, with him from Lynchburg to Winston Salem. Upon arriving there, Hurley found that his business could not be transacted on that day. He telephoned his employer, and was instructed to spend the night in Winston Salem, accomplish his mission the next day, and return to Lynchburg. Thereupon, the friend, Marcotte, insisted that he was obliged to be in Lynchburg the next morning. Solely to accommodate his friend, Hurley then drove his employer's automobile back to Danville, Virginia, hoping that Marcotte could find someone there who would take him to Lynchburg that night. Not finding anyone at Danville who was going to Lynchburg, Hurley then proceeded to drive Marcotte further along the route to Lynchburg, and before reaching Chatham Hurley collided with another automobile, resulting in injuries to Charlie Wilbrun Wheeling and Roma Ferguson Wheeling. Suits were instituted by them and final judgments obtained against Hurley in a state court. In one action, a judgment was also obtained against the employer, upon the theory that Hurley, at the time of the accident, was the agent of his employer. Upon appeal, the judgment against the employer was set aside, the judgment against Hurley being left undisturbed, no appeal having been taken therefrom. Kavanaugh v. Wheeling, 175 Va. 105, 7 S.E.2d 125. Subsequently, both Charlie Wilbrun Wheeling and Roma Ferguson Wheeling were adjudicated bankrupts, and these actions (now consolidated as one action) were brought by their trustees against the insurer of the employer upon the theory that Hurley was an additional insured under the omnibus clause of the employer's public liability insurance policy."

The insurance policy, on which appellant relies, reads:

"Definition of `Insured.' The unqualified word `insured' wherever used in coverages A and B and in other parts of this policy, when applicable to these coverages includes not only the named insured but also any person while using the automobile and any person or organization legally responsible for the use thereof, provided that the declared and actual use of the automobile is `pleasure and business' or `commercial', each as defined herein, and provided further that the actual use is with the permission of the named insured." (Italics ours.)

Section 4326a of the Code of Virginia makes the following provision, which is conventionally known as "the omnibus clause":

"* * * No such policy shall be issued or delivered in this State to the owner of a motor vehicle, by any corporation or other insurer authorized to do business in this State, unless there shall be contained within such policy a provision insuring such owner against liability for damages for death or injuries to person or property resulting from negligence in the operation of such motor vehicle, in the business of such owner or otherwise, by any person legally using or operating the same with the permission, express or implied, of such owner." (Italics ours.)

It is conceded that we must here apply the law of Virginia. And, as Judge Barksdale pointed out, it was expressly stated by the Supreme Court of Appeals of Virginia, Kavanaugh v. Wheeling, 175 Va. 105, 115, 7 S.E.2d 125, 129:

"There is no contradiction of the evidence of either the employers or the driver (Hurley) that the latter used the car without the consent of the former for a purpose directly contrary to the specific instructions of his employers."

We are convinced, after a careful study of the Virginia cases, that Judge Barksdale arrived at the correct conclusion when he granted the motion of the defendant-insurer for a summary judgment in its favor.

We agree with Judge Barksdale that the opinion of the highest Virginia court in Phoenix Indemnity Co. v. Anderson & Powell, Receivers (hereinafter called the Anderson case), 170 Va. 406, 196 S.E. 629, is determinative of the instant case. Counsel for appellant strenuously attempt to distinguish that case from the instant case on two grounds: (1) The Virginia court, in the Anderson case, was applying the law of North Carolina and not the law of Virginia; (2) in the Anderson case, the coverage of the policy was limited to commercial purposes, while the instant coverage included both commercial and social purposes.

The answer to the first of appellant's contentions, we think, is that the Virginia court decided the Anderson case on principle, and not on the authority of North Carolina decisions. The Virginia court, too, used language (hereinafter set out) which, to our minds, shows clearly that this court decided on the law which the court thought was the law and also ought to be the law, with a crisp indication that the same result would have been reached had the court been determining the apposite law of Virginia.

As to appellant's second contention, we point out that the specific ratio decidendi of the Anderson case was not the fact that the policy-coverage there was limited to commercial purposes. On the contrary, the court expressly held that the use of the car there was not with the permission of the owner, and therefore the "omnibus clause" did not apply. The facts of the two cases, the Anderson and the instant case, are more than strikingly similar.

The facts of the Anderson case, as set out in the opinion of Associate Justice Holt (170 Va. at pages 408, 409, 196 S.E. at page 630), were:

"This corporation (the Royall Grocery Company) owned a half ton Ford truck. Two or three times a week, Royall (Secretary and Treasurer of the Royall Grocery Company) would send Johnson (an employee of the Royall Grocery Company) in it to Raleigh to purchase fresh vegetables for the Wake Forest store. They would be brought in the early morning by farmers from the surrounding country to the city market, and it was from them that purchases were made by Johnson with money given him for that purpose by Royall. Sometimes Johnson would start in the early morning, and sometimes he would start in the evening, after business hours, in order that he might spend the night with his brother who lived in Raleigh and make an early return to Wake Forest, 16 miles away. His duty, and his only duty, was to purchase these fresh vegetables and to bring them, still fresh, to the Wake Forest store.

"On the evening of November 8, 1935, Royall, in accordance with an established custom, gave Johnson money and sent him to Raleigh to make purchases for tomorrow's trade. The Wake Forest store closed at half past six. Johnson ate dinner at home and then drove straight to his brother's house, which he reached somewhere between 7:30 and 8 o'clock. Within about an hour he left it and went to the market to see if he could pick up bargains already there. He bought nothing but drank to an extent not stated. Thereafter he started to return to his brother's house but chanced to remember a friend, Bobbitt, who had once driven a truck for the Royall Grocery Company, but who had been discharged and was then working at Staubt's bakery. Bobbitt was at work and did not get off until 11 o'clock. They then went in Bobbitt's car to a `nip joint,' where they took a drink, and from...