L. J. Dowell, Inc. v. United Pacific Cas. Ins. Co.

• Decision Date: 06 October 1937
• Docket Number: 26666.
• Citation: L. J. Dowell, Inc. v. United Pacific Cas. Ins. Co., 72 P.2d 296, 191 Wash. 666 (Wash. 1937)
• Parties: L. J. DOWELL, Inc., v. UNITED PACIFIC CASUALTY INS. CO.
• Court: Washington Supreme Court

72 P.2d 296

191 Wash. 666

L. J. DOWELL, Inc., v. UNITED PACIFIC CASUALTY INS. CO.

No. 26666.

Supreme Court of Washington

October 6, 1937

Department 2.

Appeal from Superior Court, King County; Malcolm Douglas, Judge.

Action by L. J. Dowell, Inc., against the United Pacific Casualty Insurance Company.Judgment for the defendant, and the plaintiff appeals.

Reversed.

J. Speed Smith and Henry Elliott, Jr., both of Seattle, for appellant.

Ballinger Hutson & Boldt, of Seattle, for respondent.

HOLCOMB Justice.

Most of the material facts were stipulated by the parties.The facts are these: On April 3, 1934, for and in consideration of the agreement of appellant to pay a certain premium in the sum of $449.02, respondent made, executed, and delivered to appellant, respondent's master policy of automobile liability insurance No. W-111260 upon its regular printed forms of insurance, and this policy was in full force and effect on June 15, 1934.On or about March 20, 1934appellant executed a written application to the State Department of Public Works on a printed form S.F. No. 377 furnished for the issuance by the department to appellant of a for hire permit, and the same was filed with the department on March 22, 1934.

On April 3, 1934, upon application by appellant and the payment of an additional premium of $5, respondent executed, upon forms prepared by it, a supplemental policy of automobile liability insurance, No. 111-260A.This policy was transmitted by respondent to the State Department of Public Works to be filed in support of the written application for a for hire permit pursuant to the existing state laws and statutes and the rules and regulations theretofore promulgated by that department.

On May 31, 1934, that department entered its order M.V.No. 10674, granting the application of appellant to operate as a for hire carrier and, on June 12, 1934, transmitted to appellant at Seattle permit No. F.H. 920, which continued in force and effect on June 15, 1934, the date of the accident in question.

On January 30, 1934, appellant entered into a contract with the state of Washington(hereafter designated as the Snohomish County Highway contract), wherein appellant agreed to do all work and furnish all tools, materials, and equipment for 'Clearing, grading, draining, surfacing with crushed stone and constructing a pile and timber overcrossing trestle, Everett City Limits-Broadway Street South-Extension in Snohomish County, Washington, between station 0+00 and station 128+57.8,' in accordance with plans and specifications attached to this contract.The contract also provided for the acquisition of gravel from certain described pit sites.Prior to, on, and subsequent to, June 15, 1934, appellant was engaged in transporting gravel from one of the pit locations to the site of the work, the state having purchased the right to take gravel from the pit in question.Appellant used automobile trucks in performing this work and used a steam shovel at the gravel pit to load the gravel on to the trucks.Upon being loaded, the trucks were driven by the operators to the portion of the highway covered by the contract and the gravel was dumped wherever needed.As the work continued, it became necessary for appellant to add to the number of trucks to keep the gravel moving from the pit to prevent the steam shovel and its crew from being idle at intervals.

Hence, on the afternoon of June 14, 1934, appellant procured from H. O. Seiffert Company, a corporation, at Everett, a White automobile truck, bearing serial No. 174940 and motor No. 3A1565, together with a driver thereof, to assist in hauling gravel from the pit to the highway.This truck will hereafter be referred to as the Seiffert truck.It was procured under an oral agreement between appellant and the owner, H. O. Seiffert Company, whereby the owner agreed to send the truck and the driver to the work, and to haul gravel from the pit to the highway under improvement, and appellant agreed to pay for the use of the truck and driver $3 per hour.It is noteworthy that on February 28, 1934, American Automobile Fire Insurance Company and American Automobile Insurance Company issued to H. O. Seiffert Company their joint policy of automobile insurance covering the Seiffert truck, the coverages including property damage in an amount of $1,000 or more, and public liability assumed by the American Automobile Insurance Company, the limits of liability on public liability contained in the policy being in excess of $5,000 for any recovery for personal injury to or death of one person, and in excess of $10,000 for any recovery for injury to or death of all persons as the result of one accident, which policy was in full force and effect prior to, on, and after, June 15, 1934.

The driver was placed upon appellant's pay roll and reported by appellant to the State Department of Labor and Industries as an employee of appellant.Pursuant to appellant's instructions, this driver and truck took their regular place in appellant's fleet of automobile trucks and secured from appellant's steam shovel a load of gravel, which was transported to the site of the work and dumped there, and thereafter the truck and driver continued to work in that manner.

The schedule of insurance included in appellant's policy described a 1924 White 5-ton truck bearing Waukeshau motor No. 348871.This truck was owned by appellant and was known as truck No. 14.It was hauling gravel on the Snohomish County Highway contract on the morning and afternoon shifts of June 13 and 14, 1934.It appears that in the evening of June 14 it was taken off of this job and was sent to South Bend, Wash., to haul some heavy machinery, and that it was engaged in this latter work on June 15.The Seiffert truck which was involved in the accident came on the Snohomish county job on June 14, and continued on the work hauling gravel up to the time of the accident on June 15.

In passing to and from the gravel pit it was necessary for the trucks to travel along a public highway known as the M and R road.On June 15, 1934, after this truck had delivered a load of gravel at the site of the contract work, and while it was being returned to the gravel pit for the purpose of hauling another load of gravel to the site, and while being driven in a southerly direction on the M & R road the front end of the truck ran into and collided with a Dodge sedan automobile belonging to Charles Lindblom and Kathryn Lindblom, his wife, then being operated and driven by Kathryn Lindblom in an easterly direction on the Fair Grounds road, in Snohomish county, a public highway, intersecting with the M & R road at right angles, and as a result of this collision the Dodge sedan automobile was badly damaged, and Kathryn Lindblom, who was riding therein and operating the automobile, Anna E. Gilmore, Olivia Burpee, and Iola Burke, who were passengers riding in this automobile, each sustained very severe and serious personal injuries.The truck was being operated at a speed in excess of 15 miles per hour at the time of the collision at the public highway intersection and the lawful speed limit for the truck at the time and place was 15 miles per hour.Thereafter, four actions were instituted by the injured parties to recover for personal injuries and property damage, resulting from the alleged negligence of defendants.

On about February 15, 1935, Charles Lindblom and Kathryn Lindblom, his wife, commenced in the superior court of Washington for Snohomish county a law action against H. O. Seiffert Company and L. J. Dowell, Inc., wherein they sued to recover against defendants, and each of them, the sum of $3,427 and costs and disbursements therein.

On about February 25, 1935, A. R. Gilmore and Anna E. Gilmore, his wife, commenced in the superior court of Washington for King county a law action against H. O. Seiffert Company and L. J. Dowell, Inc., to recover judgment against defendants and each of them for $23,785 and costs and disbursements therein.

On about May 14, 1935, Olivia Burpee commenced an action in the superior court for King county against H. O. Seiffert Company and L. J. Dowell, Inc., to recover against defendants, and each of them, the sum of $10,750.25 and costs and disbursements therein.

On about May 14, 1935, Vernon A. Burke and Iola Burke, his wife, commenced an action in the superior court for King county against H. O. Seiffert Company and L. J. Dowell, Inc., to recover against defendants, and each of them, the sum of $36,859.25 and for their costs and disbursements.

On May 17, 1935, appellant herein, through its attorney, advised respondent of these actions and tendered the defense of these suits.Respondent disclaimed all liability in connection therewith.Appellant, upon advice of its counsel, and after making a full and complete investigation, concluded there was probably legal liability upon its part as defendant in these actions, and, being desirous of limiting its legal liability did, through negotiations with its codefendant and the plaintiffs in these actions, Before trial of the causes and without judgment being entered therein, effect a compromise and settlement of each of these causes of action by payment of the following sums, to wit: Charles Lindblom and Kathryn Lindblom, $1,569.50; Olivia Burpee, $3,025.25; Vernon A. Burke and Iola Burke, $11,405.25; and A. R. Gilmore and Anna E. Gilmore, $4,000.Appellant contributed toward this compromise settlement one-half to each of those sums.H. O. Seiffert Company tendered its defense of these actions to the American Automobile Insurance Company under its liability policy issued to it which insurance company assumed the defense of these actions upon behalf of the assured, conducted the...