Penny v. Powell

• Decision Date: 21 June 1961
• Docket Number: No. A-7893,A-7893
• Citation: 162 Tex. 497,347 S.W.2d 601
• Parties: Earl PENNY et al., Petitioners, v. Allie Fay O'Rand POWELL et vir, Respondents.
• Court: Texas Supreme Court

Page 601

347 S.W.2d 601

162 Tex. 497

Earl PENNY et al., Petitioners, v. Allie Fay O'Rand POWELL et vir, Respondents.

No. A-7893.

Supreme Court of Texas.

June 21, 1961.

Atchley, Russell & Hutchinson, Texarkana, for petitioners.

Jones, Brian & Jones, Marshall, Robert F. Salmon, Linden, for respondents.

HAMILTON Justice.

This suit was brought by respondents Allie Fay O'Rand Powell et vir against Earl Penny and Travelers Indemnity Company seeking damages for the death of Sidney Stanton O'Rand, the son of respondent Mrs. Powell. Respondents alleged that deceased was riding in a car owned and operated by petitioner Penny when Penny lost control of the car and collided with a tree. O'Rand was thrown from the car and died as a result of the injuries received. Respondents alleged the negligence of petitioner Penny was the proximate cause of said death. At all pertinent times the respondents and their deceased son and petitioner Penny resided in Texas. The accident resulting in the death of respondents' son occurred in the State of Louisiana.

In joining the Travelers Indemnity Company as co-defendants, respondents specifically pleaded a statute of Louisiana, LSA-R.S. 22:655, known as the Louisiana Direct Action Law, the more pertinent parts of which are as follows:

'* * * The injured person or his or her survivors hereinabove referred to, or heirs, at their option, shall have a right of direct action against the insurer within the terms and limits of the policy in the parish * * * where the insured or insurer is domiciled, and said action may be brought against the insurer alone or against both the insured and insurer, jointly and in solido, at either of their domiciles or principal place of business in Louisiana. This right of direct action shall exist whether the policy of insurance sued upon was written or delivered in the state of Louisiana or not and whether or not such policy contains a provision forbidding such direct action, provided the accident or injury occurred within the state of Louisiana. * * *'

Reference may be made to the Court of Civil Appeals opinion, in which the statute is more fully set out. 336 S.W.2d 224.

Petitioner Travelers Indemnity Company filed a motion to abate the action against it and to dismiss it as a party to the suit. The motion was granted by the trial court, and the prosecution of the suit proceeded against Penny alone. The jury answered all issues in favor of petitioner Penny, and judgment was entered that respondents take nothing. On appeal the Court of Civil Appeals held that the trial court was in error in dismissing the cause as to the petitioner Travelers Indemnity Company, and without passing on other points raised remanded the cause.

(1, 2) The sole question before this court is whether the Direct Action Statute of Louisiana is enforceable in Texas in a suit of this nature. The Court of Civil Appeals recognizes as do both parties the well-settled law that matters of procedure are governed by the law of the forum, and further that the courts of each state may determine the matter of a foreign enactment by application of its own rules of construction. Shelton v. Marshall, 16 Tex 344; Wells v. American Employers' Insurance Company, 5 Cir., 132 F.2d 316.

(3) In construing the Louisiana Direct Action Statute we are led to the conclusion that in so far as it provides for joinder of a liability or indemnity insurance company with the insured in tort cases the statute is procedural rather than substantive.

We are compelled to reach that view for the reason that the Supreme Court, under its rule-making powers, has treated the subject matter of the joinder of remedies and joinder of parties as procedural matters and has formulated rules in regard thereto. In fact, Rule 51(b), Texas Rules of Civil Procedure, covers in part the same subject matter which is covered by the Louisiana Direct Action Statute, said rule being as follows:

'Rule 51. Joinder of Claims and Remedies

'(b) Joinder of Remedies. Whenever a claim is one heretofore cognizable only after another claim has been prosecuted to a conclusion, the two claims may be joined in a single action; but the court shall grant relief in that action only in accordance with the relative substantive rights of the parties. This rule shall not be applied in tort cases so as to permit the joinder of a liability or indemnity insurance company, unless such company is by statute or contract directly liable to the person jnjured or damaged. As amended by order of Sept. 20, 1941, effective Dec. 31, 1941; and by order of July 26, 1960, effective Jan. 1, 1961.'

It can be seen from a reading of said rule that same provides for direct action against the indemnitor by permitting the joinder of it with the party primarily liable. However, the rule provides for an exception in tort cases. The Louisiana rule makes no such exception, but specifically provides for a joinder in such cases. Rules 38(c) and 97(f), T.R.C.P., dealing with parties, also prohibit the joinder of a liability or indemnity insurance company in tort cases unless such company is by statute or contract directly liable to the person damaged or injured. Since this court has considered such matters as procedural by making rules covering same, we can see no good reason why we should construe a Louisiana statute covering the same matters as being substantive rather than procedural. Since the insurance contract in question contains a 'No Direct Action Clause', and since there is no Texas statute requiring a joinder in this case, the rule forbidding joinder is applicable.

(4) While the courts of one state are not bound by the construction placed on the statutes of another state by its courts, it is always well to look to the decisions of that state in construing one of its statutes. The Court of Civil Appeals, in holding that the direct action statute of Louisiana was enforceable in Texas, relied principally on the case of West v. Monroe Bakery, Inc., 217 La. 189, 46 So.2d 122. We cannot agree with the Court of Civil Appeals that the holding in that case is determinative of the question, even in Louisiana. The latest pronouncements of the Supreme Court of...