Prickett v. Hawkeye-Security Insurance Company, 6172

• Decision Date: 08 August 1960
• Docket Number: No. 6172,6261.,6172
• Citation: 282 F.2d 294
• Parties: Donald W. PRICKETT, Appellant, v. HAWKEYE-SECURITY INSURANCE COMPANY, a corporation, Appellee. FARMERS MUTUAL HAIL INSURANCE COMPANY OF IOWA, a corporation, Appellant, v. HAWKEYE-SECURITY INSURANCE COMPANY, a corporation, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

282 F.2d 294 (1960)

Donald W. PRICKETT, Appellant, v. HAWKEYE-SECURITY INSURANCE COMPANY, a corporation, Appellee.

FARMERS MUTUAL HAIL INSURANCE COMPANY OF IOWA, a corporation, Appellant, v. HAWKEYE-SECURITY INSURANCE COMPANY, a corporation, Appellees.

Nos. 6172, 6261.

United States Court of Appeals Tenth Circuit.

August 8, 1960.

COPYRIGHT MATERIAL OMITTED

Willard N. Van Slyck, Jr., Topeka, Kan. (of Doran, Kline, Cosgrove & Russell) Topeka, Kan., for appellants.

Lawrence Weigand, Wichita, Kan. (Lawrence E. Curfman, Bryon Brainerd, Charles W. Harris, Orval J. Kaufman, J. Ruse McCarthy, Donald A. Bell, Charles C. McCarter, J. L. Weigand, Jr., and Spencer L. Depew, Wichita, Kan., on the brief), for appellee.

Before MURRAH, Chief Judge, and BRATTON and LEWIS, Circuit Judges.

BRATTON, Circuit Judge.

These appeals bring here for review integrated parts of litigation arising out of a traffic accident occurring on a highway in Kansas, and the primary issue on which the appeals turn is which of two insurance carriers shall ultimately bear the loss arising out of the accident. For convenience, reference will be made to William L. Prickett as Prickett; to Donald William Prickett as Donald; to Farmers Mutual Hail Insurance Company of Iowa as Farmers Mutual; to Ed Holestine, doing business as Ed Holestine Truck Line, as Holestine; and to Hawkeye-Security Insurance Company as Hawkeye.

Prickett and Donald are father and son, and they reside at Plainville, Kansas. Prickett was engaged in the trucking business, and he held an interstate commerce carrier permit authorizing the hauling of ordinary livestock and unmanufactured agricultural commodities. Farmers Mutual issued to him a standard automobile insurance policy, and the policy was on file with the State Corporation Commission of Kansas. At the times material here, Donald was nineteen years of age; worked for his father in the trucking business; and received from the family chest cash from time to time with which to meet his ordinary needs. He had a regular chauffeur's license for which he was eligible under the laws of Kansas; but on account of his minority in age, he was ineligible for and did not have a special chauffeur's license required by the laws of Kansas of a person driving a motor vehicle while in use as a public or common carrier of persons or property. Holestine conducted a common carrier motor freight business; maintained a place of business in Kansas City, Kansas; and held an interstate commerce carrier permit authorizing the hauling of livestock, building materials, and other specified commodities. Hawkeye issued to him its policy of public liability and property damage insurance; and the policy was on file with the State Corporation Commission of Kansas. Most of Holestine's outbound cargoes from Kansas City were transported with the use of equipment belonging to other truckers pursuant to an arrangement known in the trade as a trip lease under an emergency clearance certificate which the Corporation Commission of Kansas had authorized the firm to issue. Such operations were conducted under Holestine's interstate commerce carrier permit. Normally, the truck owner furnished the driver and paid the operating expenses; Holestine paid the transportation taxes, provided bodily injury liability, property damage liability, and cargo liability, insurance coverage; and the customary division of the tariff was seventy per cent to the owner of the equipment and thirty per cent to Holestine. The emergency clearance certificate executed on behalf of Holestine and placed in the hands of the driver of the leased truck recited among other things that full responsibility for the operation of the equipment during the period covered by the clearance would be with Holestine regardless of its actual ownership. During three or four years preceding the times mentioned here, Prickett and Donald hauled many cargoes for Holestine under such trip lease arrangement. The ordinary procedure after delivering a cargo in Kansas City was to obtain through Holestine a backhaul cargo consigned to some point or points in Kansas. In that way, remuneration for round trips to Kansas City was increased.

On the occasion having materiality here, Donald transported a load of cattle to Kansas City, Missouri. The next morning after delivering the cattle, in accordance with the customary practice, Donald inquired whether Holestine had any shipment of freight to be made to a point in western Kansas which he might transport. He was informed that there would be one the following day; and he was told where to go in Kansas City, Missouri, in order that the freight to be shipped could be loaded into the truck. On the following morning, Donald went to the place at which the freight was to be obtained; it was loaded onto the truck-trailer; and he then went to the office of Holestine. There, he was handed certain documents, including copies of the bill of lading, an emergency clearance certificate, and certain other papers. After leaving the office of Holestine, Donald cleared a port of entry west of Kansas City, Kansas, and started on the highway specified in the certificate of clearance. At about 10:50 o'clock that night, the truck-trailer came to a stop in the right lane of the highway; an automobile following collided with the rear of the trailer; six persons riding in the automobile were injured; and one of them died.

Three suits for damages arising out of the accident were filed in the United States Court for Kansas. Prickett, Donald, Farmers Mutual, Holestine, Hawkeye, and the driver of the automobile which was approaching the scene of the accident, were joined as defendants. The cases were consolidated for trial. Before submission of the cases to the jury, the court directed dismissal of the actions as against Farmers Mutual. Verdicts were returned in favor of the driver of the automobile approaching the scene of the accident. And verdicts were returned in favor of all plaintiffs against all remaining defendants. Judgments were entered upon the verdicts. But the judgment in one of the cases was reduced as against Hawkeye in an amount to bring it within the maximum limits of liability specified in the Hawkeye policy. Hawkeye paid in full the judgments against it, together with accrued interest and court costs. After Hawkeye paid off the judgments against it, it instituted an action against Donald to recover judgment in the nature of indemnity or restitution for the amounts which it had paid. Judgment was entered for Hawkeye, and Donald appealed. After Hawkeye recovered the judgment against Donald, it caused a writ of garnishment to issue against Farmers Mutual. Judgment was entered in the garnishment proceeding in favor of Hawkeye, and Farmers Mutual appealed. The two appeals — that of Donald in one instance and that of Farmers Mutual in the other — were submitted together in this court.

The first ground of attack upon the judgment rendered against Donald is that the court erred in finding and concluding that the Hawkeye policy excluded coverage to Donald and that he was not an additional insured thereunder. In an order entered in advance of trial, the court determined among other things that the policy excluded coverage to Donald; that he was not an additional insured under it; and that the scope of the trial should be limited accordingly. That order gives rise to the attack upon the judgment. The Hawkeye policy included in its definition of the insured not only the named insured but any person while using the motor vehicle with the permission of the named insured. One endorsement on the policy provided in effect that the insurance should apply to all trucks, tractors, trailers, and semi-trailers used for the purposes stated as applicable thereto in the declaration, and in addition, trucks, tractors, trailers, and semi-trailers hired or leased by the named insured while such equipment was operated by or for him. Another endorsement provided that Hawkeye agreed that the policy was thereby amended and extended so as to cover any and all motor vehicles, trailers, and semi-trailers operated or used by the assured pursuant to the certificate, permit, or license issued by the State Corporation Commission of Kansas. And a third endorsement provided in substance that Hawkeye agreed to pay within the limits of liability fixed in the policy any final judgment recovered against Holestine for bodily injury to or death of any person, or damage to property of others, resulting from negligent operation, maintenance or use of motor vehicles under certificate of public convenience and necessity, or permit, issued by the Interstate Commerce Commission, regardless of whether such motor vehicles were specifically described in the policy or not. And section 8-270, General Statutes of Kansas 1949, provides in effect that the operation of a vehicle within the state without complying with the provisions of the act shall not be considered as operating such vehicle unlawfully or in violation of law so as to affect the validity of any contract or policy of insurance. But the definitive provision in the policy, the endorsements upon the policy, and the statutory provision, were intended to protect the public. Their purpose was to assure compensation to third persons, that is members of the public, for injury or death or for damage to property, arising out of negligent operations of motor carriers. Travelers Mutual Casualty Co. v. Herman, 8 Cir., 116 F.2d 151, certiorari denied, 313 U.S. 564, 61 S.Ct. 842, 85 L.Ed. 1523; Bennett v. Preferred Accident Insurance Co. of New York, 10 Cir., 192 F.2d 748. They were not intended to fix rights as between the insurance carrier and the operator of an insured motor vehicle whose negligence gave rise to death or personal injury of members of the public.

In presently pertinent part, the Hawkeye policy expressly provided in effect that it should not apply while the insured motor...