Monroe County Motor Co. v. Tennessee Odin Ins. Co., 1

• Decision Date: 12 January 1950
• Docket Number: No. 1,1
• Citation: 231 S.W.2d 386,33 Tenn.App. 223
• Parties: MONROE COUNTY MOTOR CO. et al. v. TENNESSEE ODIN INS. CO.
• Court: Tennessee Court of Appeals

Page 386

231 S.W.2d 386

33 Tenn.App. 223

MONROE COUNTY MOTOR CO. et al. v. TENNESSEE ODIN INS. CO.

No. 1.

Court of Appeals of Tennessee, Eastern Section.

Jan. 12, 1950.

Certiorari Denied by Supreme Court May 5, 1950.

Donaldson, Montgomery & Kennerly, Knoxville, for appellant.

Harry T. Burn, Sweetwater, for appellee.

ANDERSON, Presiding Judge.

The bill was filed by the Monroe County Motor Company and Charles B. Randolph, Jr., against the Tennessee Odin Insurance Company as successor to the Tennessee Automobile Insurance Company and Odin Fire & Marine Company, on a policy of liability insurance, covering the Monroe County Motor Company, a corporation and its president, Randolph. The theory of the bill is that by virtue of the terms of said policy the defendant insurer is liable for an unpaid balance on a joint judgment against the complainant Randolph and L. A. Wood Company, obtained by one Taylor in another suit as damages for personal injuries sustained by reason of the negligence of Randolph in the operation of an automobile belonging to said Company but being driven at the time by Randolph. The chancellor in an able and discriminating opinion granted a recovery and the defendant appealed.

The recovery was in the name of the complainant Randolph. The chancellor held there was no theory of the evidence under which the Monroe County Motor Company was entitled to relief and there is no complaint about that ruling. Hence without determining it, we need not concern ourselves with that question.

The defendant makes two contentions: (1) that by reason of certain sworn testimony given in the trial of the damage suit, and a stipulation in that case, the complainant Randolph is estopped to set up certain facts essential to a recovery in the present case and (2) that in the particular circumstances the policy sued on did not cover the liability of Randolph.

The Monroe County Motor Company, a corporation, conducts an automobile sales agency and repair shop in Sweetwater, Tennessee. The policy sued on is designated, 'a garage liability policy'. It names the Monroe County Motor Company as insured and by a separate provision the individual liability on the part of its executives is also covered.

The pertinent insuring agreement is as follows: 'To pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law for damages, including damages for care and loss of services, because of bodily injury, including death at any time resulting therefrom, sustained by any person or persons, caused by accident and arising out of such of the operations hereinafter defined as are indicated by specific premium charge or charges in Item 3 of the declarations.'

The definition of 'operations' pertinent to the facts of the present case, is as follows: 'The ownership, maintenance, occupation or use of the premises herein designated, including the public ways immediately adjoining, for the purpose of an automobile dealer or repair shop, and all operations either on the premises or elsewhere which are necessary and incidental thereto, including repairs of automobiles or their parts, and ordinary repairs, of buildings on the premises and the mechanical equipment thereof; and the ownership, maintenance or use of any automobile for any purpose in connection with the above defined operations, and also for pleasure use.'

The coverage is extended by the following definition of the term, 'insured': 'The unqualified word 'insured' includes not only the named insured but also any partner thereof if the named insured is a partnership, and the president, vice president, secretary and treasurer of the corporation if the named insured is a corporation, with respect to the operation, for business or pleasure, of any automobile owned by or in charge of the named insured, except an automobile owned by such partner or officer or by a member of his family; but this provision shall apply only with respect to any such partner or officer who earns remuneration which is included in the total remuneration upon which premium for this policy is based, as hereinafter provided.'

There is a further provision that 'This policy applies only to accidents which occur during the policy period within the United States and North America (exclusive of Alaska or the Dominion of Canada.'

The italicized clauses are those applicable to the facts of the present case.

At the time here material, the complainant Randolph was president of the Monroe County Motor Company. He was employed at a specified salary and on a full time basis. He lives in Sweetwater, Tennessee, where the principal office of the corporation is located. L. A. Wood Company is also a corporation with an office in Sweetwater. It is engaged in barytes mining with a number of mines in the State of Georgia, one of them being at Cartersville. L. A. Wood is the president and principal stockholder of the Company.

At the particular time, due to wartime restrictions affecting the manufacture and sale of automobiles, the principal business of the Monroe County Motor Company consisted of selling parts and accessories. The L. A. Wood Company was its best customer. It had a good trade with that company's mines in the State of Georgia. In January 1944 Mr. Wood found it necessary to make a trip to the company's mine at Cartersville, Georgia. He decided to go by automobile. Due to an injury theretofore received he was unable to drive an automobile for a long distance without his leg becoming excessively tired and paining him. Accordingly he invited Mr. Randolph to make the trip with him and do part of the driving. Randolph accepted and they left Sweetwater about 9 o'clock in the morning, in a Lincoln automobile belonging to the L. A. Wood Company. They were enroute to Cartersville, Georgia. As they left Sweetwater, Mr. Wood was driving. He surrendered the wheel to Mr. Randolph as they neared Dalton, Georgia. They had gone but a short distance when they overtook a man on a bicycle going in the same direction. The car then being operated by Randolph struck the bicycle and the rider, whose name was Taylor, was injured.

As a result Taylor brought suit against L. A. Wood Company, L. A. Wood, individually and Randolph, but as said, the judgment was against Randolph and the L. A. Wood Company only. L. A. Wood, individually, was exonerated as a result of the following instruction given by the judge to the jury:

'It has been stipulated, however, between the parties, that the Cadillac automobile in question was the property of L. A. Wood and Company, and that neither of the other defendants had any interest therein, and further, that the automobile was at the time of the collision engaged exclusively in the business of said L. A. Wood and Company.

'This being true, and there being no evidence as conceded by plaintiff, which would sustain a verdict against the defendant, L. A. Wood, individually, you are directed to bring in a verdict in favor of L. A. Wood.'

The defendant insurer in the present case was also the insurer in another policy covering the liability of L. A. Wood Company as established in the damage suit to the extent of $5,000.00. This amount the defendant paid, leaving a balance due Taylor on his judgment of $3,500.00. It is to recover this balance that the present suit is brought under the theory, as stated, that the liability of Randolph was within the coverage of the policy sued on.

The complainant contends that since in driving the car he was on the business of the Monroe County Motor Company and acting within the scope of his authority as president of that concern, his custody and control of the vehicle was necessarily that of the named insured, and that therefore he was 'in charge of' the car within the meaning of the pertinent policy provision. The defendant contends that all other questions aside, the complainant is estopped to say that he was on a business mission for the Monroe County Motor Company.

This contention is based upon two facts. The first is that the complainant did not object to the above mentioned stipulation made at the trial of the damage suit to the effect that at the time of the accident the automobile was engaged exclusively in the business of L. A. Wood Company. The second is that in that case the complainant testified that he went along on the trip as a matter of courtesy to Mr. Wood, whereas in the present case he testified that he made the trip in the interest of the Monroe County Motor Company.

In no view of the matter could the first ground give rise to a judicial estoppel in the correct sense of that term. As to it, the defendant's contention is manifestly based upon the rule that a litigant may not assume inconsistent positions. This rule is not one of estoppel, strictly speaking, but is a rule of positive procedure necessary to the orderly dispatch of litigation, whereas the distinctive feature of the judicial estoppel as applied in this jurisdiction is the express purpose of the court to uphold the sanctity of oath as a matter of public policy. Sartain v. Dixie Coal & Iron Co., 150 Tenn. 633, 653, 266 S.W. 313.

The circumstances under which the stipulation exonerating Wood was entered into are unusual. As already said, the defendant insurer was also obligated under another policy insuring L. A. Wood Company (and apparently by extended coverage, L. A. Wood, individually), and covering the liability arising out of an accident such as that under consideration in the damage suit. The defense of the three defendants in that case, namely L. A. Wood Company, L. A. Wood individually, and the present complainant Randolph, was conducted by the defendant insurer through three attorneys employed by it. This arrangement was presumably pursuant to the usual provision of an automobile liability policy. It should be said in passing that able counsel representing the insurer in the present suit was not...