Maryland Casualty Co. v. Consumers Finance Service
| Decision Date | 23 December 1938 |
| Docket Number | No. 6860.,6860. |
| Citation | 101 F.2d 514 |
| Parties | MARYLAND CASUALTY CO. v. CONSUMERS FINANCE SERVICE, Inc., OF PENNSYLVANIA et al. |
| Court | U.S. Court of Appeals — Third Circuit |
Charles B. Lenahan, of Wilkes Barre, Pa., for appellant.
A1 J. Kane and James P. Harris, both of Wilkes Barre, Pa., and Walsh & Fadden, of Scranton, Pa., for appellees.
Before BIGGS, MARIS, and BUFFINGTON, Circuit Judges.
The Maryland Casualty Company issued to Consumers Finance Service, Inc., of Pennsylvania on August 30, 1937, an automobile policy insuring Finance Service against liability for bodily injury and property damage arising from the use of automobiles in its business by its agents and employees. The policy obligated the Casualty Company, inter alia, to defend suits brought against Finance Service seeking damages for such bodily injury or property damage. It also provided that the parties insured thereunder included not only Finance Service, the named insured, but also any other persons using the automobiles or responsible for their use if they were used with the permission of the named insured for the purposes designated in the policy. It was stipulated, however, that no person or organization, or any agent or employee thereof, operating an automobile repair shop, public garage, sales agency, service station or public parking place should be deemed insured with respect to any accident arising out of the operation thereof.
On September 7, 1937 Finance Service, which was engaged in the business of financing motor vehicles in Wilkes-Barre, Pennsylvania, directed one of its employees, George T. Smith, to go to the premises of Michael Hanshulak in the nearby borough of Edwardsville, to repossess an automobile to which it was entitled. Smith was directed to turn the car over to Sam Feldman, a dealer in used cars, with whom Finance Service had arranged to take the car on consignment for resale. Smith picked up Rex Huddy, an employee of Feldman, at the latter's place of business, and both drove to the home of Hanshulak in an automobile used in the business of Finance Service. Smith took possession of Hanshulak's automobile and then turned it over to Huddy who tried to start it but was unable to do so. Smith then drove the other automobile behind the Hanshulak automobile and pushed it for some distance until its motor started and Huddy began to drive it under its own power. At a point near the gasoline station of the Republic Oil Company Huddy lost control of the automobile and it crashed into the gasoline station and ran into Ross White, Ralph Montgomery, Andrew Thomas, John Wallace and Richard Farrell, injuring them and damaging the property of the Republic Oil Company and of the Horn Dairy Company. At the time of the accident Smith was in the other automobile some distance from the automobile involved in the accident.
Ross White instituted suit in the Court of Common Pleas of Luzerne County, Pennsylvania, against Finance Service to recover for his injuries received in the accident, and the others injured therein threatened to do the same, whereupon Finance Service made demand upon the Casualty Company to defend it from these suits. This the Casualty Company declined to do, contending that it had no responsibility under its policy with respect to the accident in question because Finance Service's agent Smith and Huddy were both at the time of the accident on the business of Feldman, who operated an automobile sales agency, and they were therefore not insured by its policy. It thereupon filed a petition in the court below for a declaratory judgment in which it named as defendants Finance Service,...
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