Liberty Mut. Ins. Co. v. McDonald

• Decision Date: 09 June 1938
• Docket Number: No. 7413.,7413.
• Parties: LIBERTY MUT. INS. CO. v. McDONALD et al.
• Court: U.S. Court of Appeals — Sixth Circuit

97 F.2d 497 (1938)

LIBERTY MUT. INS. CO. v. McDONALD et al.

No. 7413.

Circuit Court of Appeals, Sixth Circuit.

June 9, 1938.

F. A. Bull, of New York City, and Allen Cox, Jr., of Memphis, Tenn. (Duncan & Mount, of New York City, and Waring, Walker & Cox, of Memphis, Tenn., on the brief), for appellant.

J. W. Canada and C. C. Brown, both of Memphis, Tenn. (Canada & Russell, C. C. Brown, and John A. Osoinach, all of Memphis, Tenn., on the brief), for appellees.

Before HICKS and ALLEN, Circuit Judges, and FORD, District Judge.

HICKS, Circuit Judge.

Prather S. McDonald lost his life by reason of an accident in which an automobile driven by him collided with a tractor and trailer of the Hoover Motor Express Company which had been left on the highway between Nashville and Memphis, near Huntingdon, Tennessee, on the night of September 23, 1932. Thelma Latimer, riding in the automobile, was also killed. W. Percy McDonald, as Executor of the Estate of Prather S. McDonald, and C. C. Brown, as Administrator of the Estate of Thelma Latimer, recovered judgments for their deaths in the sums of $25,000.00 and $15,000.00, respectively, in the Circuit Court of Shelby County, Tenn. These judgments were affirmed by the Supreme Court of the state.

The present actions, later consolidated, were brought against appellant, Liberty Mutual Insurance Company, upon those judgments under a policy of insurance issued by it on September 8, 1932, to the Express Company for "Public Liability and Property Damage." The consolidated causes were tried to the court without a jury and appellees recovered the amounts of their respective judgments, with interest.

The primary questions presented for review are: (1) whether the court erred in its application of § 5483, Code of Tennessee of 1932; and (2) whether it erred in its finding that the equipment involved in the accident was "substituted" for other of the Express Company's equipment specifically covered by the policy.

The undisputed facts are that at the time of the accident the Express Company was operating a motor vehicle freight line from Atlanta, Georgia, to Memphis, Tennessee, by way of Nashville, Tennessee. It was authorized to operate over the highway in Tennessee by a Certificate of Convenience and Necessity from the Tennessee Railroad and Public Utilities Commission. A Certificate was a prerequisite to any operation over Tennessee highways, and one could not be procured until the operative had complied with the provisions of § 5483 enacted for the protection of those who might be injured as the result of such operation.

The pertinent portion of § 5483 follows:

"No motor vehicle shall be operated upon any * * * highway in this state for the purpose of transporting * * * property for hire by virtue of such certificate until there shall have been filed with the commission a * * * policy of insurance, executed by a company * * * authorized to execute such instruments in the state and approved by said Commission, in such reasonable amount and on such terms and conditions as said commission shall prescribe; but such * * * policy of insurance shall be conditioned to pay any judgment rendered against such certificate holder and/or operator (within the limits of said * * * policy * * *) as the result of damage due to personal injury * * * arising out of the actual operation of such vehicles * * *."

In Johnson Transfer & Freight Lines, Inc. v. American Nat. Fire Ins. Co., 168 Tenn. 514, 518, 79 S.W.2d 587, 99 A.L.R. 277, the Supreme Court of Tennessee, after quoting this section, said (page 589):

"It will be observed that the statute quoted requires the bond or policy filed with the commission to pay any judgment rendered against the operator of the vehicle `as the result of damage due to personal injury or damage to property, arising out of the actual operation of such vehicles, or for damage to or loss of property while in the possession of or under the control of any such operator.'

"This policy having been issued for the express purpose of enabling the Johnson Company to comply with this statute, as the rider upon the policy shows, the provisions of the statute enter into, and become part of, the policy, and such statutory provisions override and supersede anything in the policy repugnant to such provisions. Dugger v. Insurance Co., 95 Tenn. 245, 32 S.W. 5, 28 L.R.A. 796; Laurenzi v. Atlas Ins. Co., 131 Tenn. 644, 176 S.W. 1022; Thompson v. Concordia Fire Ins. Co., 142 Tenn. 408, 215 S.W. 932; Riddick v. Yorkshire Ins. Co., 165 Tenn. 105, 52 S.W.2d 166."

This is an interpretation of the statute by the Supreme Court of the state, if indeed it needed any interpretation. The District...