Shawcroft v. Standard Acc. Ins. Co. of Detroit

• Decision Date: 02 April 1934
• Docket Number: 24563.
• Citation: Shawcroft v. Standard Acc. Ins. Co. of Detroit, 30 P.2d 987, 177 Wash. 106 (Wash. 1934)
• Parties: SHAWCROFT et ux. v. STANDARD ACC. INS. CO. OF DETROIT.
• Court: Washington Supreme Court

30 P.2d 987

177 Wash. 106

SHAWCROFT et ux. v. STANDARD ACC. INS. CO. OF DETROIT.

No. 24563.

Supreme Court of Washington, En Banc.

April 2, 1934

Appeal from Superior Court, Grays Harbor County; Wm. E. Campbell Judge.

Action by John Shawcroft and wife against the Standard Accident Insurance Company of Detroit.Judgment for plaintiffs, and defendant appeals.

Reversed with instructions.

J. E Stewart, of Aberdeen, and Battle, Hulbert & Helsall, of Seattle, for appellant.

Clark W. Adams, of Aberdeen, and A. Emerson Cross, of Seattle, for respondents.

BEALS Chief Justice.

The Aberdeen branch of the Salvation Army, a California corporation authorized to carry on its activities within the state of Washington, was named as the assured in an 'automobile policy' issued by defendant, Standard Accident Insurance Company of Detroit.This policy protected the assured against certain liabilities which might be incurred by reason of the operation of a Ford delivery truck owned and operated by the assured in connection with its Aberdeen station.

In their complaint plaintiffs alleged that one George Davey was an officer of the Salvation Army in charge of its headquarters in the city of Aberdeen, and that among other duties Mr. Davey operated the Ford truck which was the subject-matter of the insurance policy above referred to, using the same in connection with his employment; that during the month of April, 1930, and while the policy of insurance was in full force and effect, Mr. Davey, accompanied by plaintiffAda Shawcroft, undertook to drive the truck from Aberdeen to Montesano; that while en route the right front tire blew out; and that as the result thereof Mr. Davey lost control of the truck, which ran into a ditch beside the highway, throwing Mrs. Shawcroft out of the truck and seriously injuring her.

The complaint further alleged that thereafter the plaintiffs in this action sued Mr. and Mrs. Davey for damages suffered by Mrs. Shawcroft; that the defendants in the action were defended by the attorney for the defendant in this action; and that the trial resulted in a verdict and judgment pursuant thereto in favor of the plaintiffs in the sum of $2,500, which judgment has remained wholly unsatisfied because of the insolvency of Mr. and Mrs. Davey.

The plaintiffs further alleged that the defendant in this action, by reason of the delivery of its policy of insurance, is liable to plaintiffs under the policy, that the judgment in the action against Mr. and Mrs. Davey was a final determination of the amount of plaintiffs' damage and the extent of Mr. Davey's liability to plaintiffs, and that the judgment in the former action constituted an adjudication of the responsibility of the defendant in this action and the extent of its liability under its policy of insurance.

Finally plaintiffs herein alleged a demand upon defendant for the payment of the judgment in the prior action and its refusal to pay the same.

Plaintiffs prayed for judgment against defendant for the amount of the judgment against Mr. and Mrs. Davey, together with costs in the former action and interest on the judgment.

Defendant answered plaintiffs' complaint, admitting the execution of the policy, but denying its liability thereon to plaintiffs.By way of an affirmative defense, defendant alleged that, at the time of the accident which resulted in Mrs. Shawcroft's injury, she was an employee of the Salvation Army, the named assured in the policy, and that the accident arose out of and in the course of the assured's business, profession, and occupation; that the attorney who represented Mr. and Mrs. Davey on the trial of the action did so under a written agreement with them to the effect that the defendant herein might defend the former action without waiving any defense which it had under its policy of insurance; and that the defendant insurance company reserved the right to deny liability to pay any judgment which the Shawcrofts might obtain.

The affirmative defense was denied by plaintiffs in their reply, and this action proceeded to trial, with the result that the court entered findings of fact and conclusions of law in plaintiffs' favor, followed by a judgment in accordance therewith, from which defendant appeals.

Appellant undertook the defense of the action against the Daveys after Mr. Davey wrote appellant the following letter:

'October 17th, 1930.

'Standard Accident Insurance Company,

'Detroit, Michigan.

'In re: John Shawcroft and Ada Shawcroft vs. George Davey and Mrs. George Davey.

'Gentlemen:

'I have been served with summons and complaint in the above entitled action and request you to defend the same for me.It is understood and agreed that you may defend said action without waiving any defenses which you may have under the policy of insurance No. JC-1176656 written by you in which the named assured is the Salvation Army; and it is understood that you reserve the right to deny liability to pay any judgment which may be obtained.

'Very truly yours,

George Davey.'

The following portions of the automobile policy which is the basis of this action are pertinent to this inquiry: 'Declarations

'Item 1.Name Assured Salvation Army (Ensign Geo. Davey, Officer in Charge)

'Residence Address (Street, Town and State)

'Business AddressNo. 321 South 'G' Street, Aberdeen, Washington (Street, Town and State)

'Assured's occupation is Salvation Army

'Individual, co-partnership, corporation or estate?Corporation.

'Automobile Policy Number JC 1176656

'Standard Accident Insurance Company of Detroit, Michigan (hereinafter called the Company) does hereby agree with the Assured named and described in the declarations forming a part hereof, as respects accidents occurring during the policy period stated in said declarations; by reason of the ownership, maintenance or use of any automobile;

'I. A.To pay, within the limits specified in Item 5 of said Declarations, the loss from the liability imposed by law upon the assured for damages on account of bodily injuries, including death resulting therefrom, sustained or alleged to have been sustained by any person or persons as the result of such accidents.* * *

'Insolvency and Bankruptcy

'VI.The insolvency or bankruptcy of the assured shall not release the Company from any payment otherwise due hereunder, and if an execution on a judgment against the assured is returned unsatisfied, the judgment creditor shall have a right of action against the Company, subject to the terms and limitations of this policy, to recover the amount of said judgment.

'Additional Assured

'VII.The term 'Named Assured' as herein used shall mean only the Assured named and described in Item I of said declarations, but the term 'Assured' shall include any other person while riding in or legally operating any such automobile and any other person, firm or corporation legally responsible for the operation of such automobile; provided: (a) Such automobile is being used with the permission of the Named Assured, or, if he is an individual, with the permission of an adult member of his household other than a chauffeur or domestic servant; (b) such other person, firm or corporation is not covered by any valid and collectible insurance against a loss covered by this policy; (c) the term 'Assured' shall not be held to include any public garage, automobile repair shop, automobile sales agency, automobile service station, or any agent or employee thereof.It is further provided that any indemnity payable under this policy shall be applied first to the protection of the Named Assured and the remainder, if any, to the protection of other persons entitled to indemnity under the provisions and conditions of this paragraph.

'VIII.The Company shall not be liable under this policy for * * * (b) accidents to any employee of the Assured arising out of and in the usual course of the trade, business, profession or occupation of the Assured * * *.'

The judgment roll in the case of Shawcroft v. Davey was admitted in evidence, together with the instructions given by the trial court in that action, as was the testimony, except medical testimony concerning Mrs. Shawcroft's injuries.

Appellant assigns error upon the admission of certain testimony, upon the trial court's finding to the effect that respondentAda Shawcroft was not at the time of the accident an employee of the Salvation Army, and upon the finding that Mrs. Shawcroft's injuries did not arise out of and in the usual course of the trade, business, profession, or occupation of the Salvation Army, and, finally, upon the entry of judgment against appellant.

Under section VIII of the policy, above quoted, appellant assumed no liability on account of '(b) accidents to any employee of the Assured arising out of and in the usual course of the trade, business, profession or occupation of the Assured,' and in this connection appellant argues that because of certain testimony introduced in the former action by the respondents in this action, and because of the instructions of the trial court given in that action, it must now be held as matter of law that it has already been adjudged that Ada Shawcroft was at the time of the accident an employee of the assured.Mrs. Shawcroft was a member of the Salvation Army in Aberdeen, and during the fall of 1929 undertook some duties in connection with the weekly distribution of 'The War Cry,' the Army's official publication.She testified that Ensign Davey, who was in charge of the Army's activities at aberdeen, requested her to do this, and that she was to dispose of four hundred War Crys a week (generally receiving 10 cents apiece), for which she received a cent and a half a copy, or $6.She covered a district embracing Aberdeen,...