Talbot v. Allstate Ins. Co., 8196

Citation76 So.2d 76
Decision Date29 October 1954
Docket NumberNo. 8196,8196
PartiesPhil TALBOT et ux., Plaintiffs-Appellees, v. ALLSTATE INSURANCE COMPANY, Defendant-Appellant.
CourtCourt of Appeal of Louisiana (US)

Jackson, Mayer & Kennedy, Shreveport, for appellant.

Love & Rigby, Shreveport, for appellees.


Plaintiff and his wife instituted this action in tort to recover for personal injuries received by Mrs. Talbot and resulting pecuniary losses including property damage to Talbot's automobile on November 21, 1951. Originally, Mr. and Mrs. M. C. Taylor, George Turley, Jr. and Allstate Insurance Company, the public liability carrier of George Turley, Jr., were made parties defendant. No service was obtained upon Mr. and Mrs. Taylor and proceedings against George Turley, Jr., were dismissed upon exceptions when it was established that there was no agency between George Turley, Jr. and Mrs. M. C. Taylor, who was the single occupant of Turley's car when the accident occurred. Therefore, when the case was tried before a jury the Allstate Insurance Company was the single defendant.

The defendant appellant in the course of its defense filed an exception of no cause or right of action, exceptor arguing in its support the law of Texas does not authorize a direct action such as was brought in the instant case and the policy expressly provided a suit against the insured shall be a condition procedent to the filing of an action against the insurer. This exception was not disposed of except by reference to the merits. Another exception of no cause or right of action was based on an averment that Mrs. Taylor did not have permission of the insured to use his automobile, and since the right of plaintiff to recover is predicated on the 'omnibus clause' in the policy there was no right or cause of action. Defendant also filed a plea directed at the unconstitutionality of Louisiana's Direct Action Statute. Both the exceptions and the plea were denied by the district judge. The question of permission was submitted to the jury during the trial of the case. Following trial the jury rendered a verdict in favor of Phil Talbot for $1,200, and in favor of his wife, Mrs. Naomi Talbot, for $3,600. Defendant's motion for a new trial was overruled and appropriate orders of appeal to this court were then perfected. Plaintiff-appellee has filed an answer to the appeal in which it is asked that the amount of damages awarded in favor of both plaintiffs be increased.

Appellant in brief and argument does not seriously question the fault of Mrs. Taylor as constituting actionable negligence and only a brief reference here will be made to the facts and circumstances concerning the collision which precipitated this action. On November 21, 1951, about nine o'clock A. M., at which time the streets were wet from rain, Mrs. Talbot was driving her husband's automobile along Pierre Avenue in Shreveport in a southerly direction, when, having given signals that she would turn to the right into Garden Street, she was suddenly struck from the rear by the car driven by Mrs. Taylor. The verdict correctly placed the entire blame for the collision upon Mrs. Taylor. The doctrine of res ipsa loquitur is appropriate. Loprestie v. Roy Motors, Inc., 1938, 191 La. 239, 185 So. 11. Other authorities for finding Mrs. Taylor blameworthy are McDaniel v. Capitol Transport Company, Inc., La.App.1948, 35 So.2d 38; Gandy v. Arrant, La.App.1951, 50 So.2d 676; and Reeves v. Caillouet, La.App.1950, 46 So.2d 373.

As a result of the collision, Mrs. Talbot received rather severe personal injuries which necessitated considerable medical expense and Mr. Talbot's car was substantially damaged. Whether or not the jury awards in favor of Mr. and Mrs. Talbot should be increased will be discussed hereafter.

Appellant complains to this court the trial court erred in two particulars: (1) in failing to sustain the plea of unconstitutionality, and (2) in failing to sustain the defendant's exception of no cause or right of action, which latter contention embraces an assertion the jury was in error in returning a verdict in favor of the plaintiffs. By way of comment we may say the issues are thus confined to a question of the unconstitutionality of Louisiana's Direct Action Statute, and secondly, the question of whether or not Mrs. Taylor had the permission of Turley to use his automobile on the occasion when the accident occurred.

The plea of unconstitutionality arises from a clause in the public liability policy issued by Allstate Insurance Company to George C. Turley, Jr., a resident of the State of Texas where the policy, dated August 3, 1951, was delivered. The policy provided:

'No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy, nor until the amount of the insured's obligation to pay shall have been finally determined either by judgment against the insured after trial or by written agreement of the insured, the claimant and the company.'

It is not disputed the above contractual obligation was valid and proper under the law of the State of Texas and no direct action against a public liability insurer is allowed in that state. Nor can it be denied that plaintiff's action against All-state Insurance Company is authorized by Louisiana's Direct Action Statute. The Louisiana act was first passed as Act No. 55 of 1930. It was subsequently incorporated in the Insurance Code of 1948, and became a part of Louisiana Revised Statutes of 1950 as LSA-R.S. 22:655. The statute has been amended to provide for direct action against a liability insurer regardless of whether the policy is written or delivered in Louisiana; Act No. 541 of 1950, LSA-R.S. 22:655.

The constitutionality of the Direct Action State has been considered on numerous occasions by the appellate courts of this state and by Federal courts. The reasons for which defendant contends the statute is unconstitutional are declared to be:

'(a) That said Statute is in violation of Article I, Section 10 of the Constitution of the United States and Article 4, Section 15 of the Constitution of Louisiana of 1921 prohibiting the passage of legislation impairing the obligations of contracts.

'(b) That the aforesaid Statute is in violation of the due process clauses as set forth in the 5th and 14th amendments of the Constitution of the United States and Article I, Section 2 of the Constitution of Louisiana of 1921.'

The courts of this state have repeatedly held that the statute does not impair the obligations of contracts and we have found no Louisiana state court decision to the contrary. Gager v. Teche Transfer Company, Inc., La.App.1932, 143 So. 62; Rossville Commercial Alcohol Corporation v. Dennis Sheen Transfer Co., Inc., 1931, 18 La.App. 725, 138 So. 183; Churchman v. Ingram, 1951-1952, 56 So.2d 297; McDowell v. National Sur. Corp., 1953, 68 So.2d 189.

The plea the statute violates the due process clause has uniformly also been passed upon by our courts, including this court in Churchman v. Ingram, and in McDowell v. National Sur. Corp., a decision by the First Circuit Court of Appeal, cited supra. Judge Hardy, the organ of the court in Churchman v. Ingram, emphasized that Hartford Accident & Indemnity Company v. Delta & Pine Land Company, 292 U.S. 143, 54 S.Ct. 634, 78 L.Ed. 1178, strongly relied upon by defendant, was inapposite to the question involved, saying:

'In the Hartford case the action was between the insured and the insurer and the holding of the court simply means that the provision of the policy as between the parties to the contract must be interpreted under the law of the place where the parties entered into the agreement. The rights of third parties were in nowise involved in the cited case and therefore the case is readily to be distinguished from the one before us, which involves the rights of third parties against the insurer of a tort-feasor.'

Furthermore, this court in Churchman v. Ingram, also disposed of the contention of defendant that he had been deprived of due process of law, declaring:

'Nor can defendant urge with any justice that he has been deprived of due process of law. Its answer admits that the service of process through the Secretary of State of the State of Louisiana was proper. The direct action statute of Louisiana has denied no right, no defense to this defendant, and it follows since it has subjected itself to the laws of the State of Louisiana with respect to procedure that its asserted defense upon constitutional grounds is without merit.'

We are aware that in the Federal Court there presently exist two divergent lines of cases in which the validity of the Louisiana Direct Action Statute has been questioned. We are also informed by counsel that the Supreme Court of the United States is presently being called upon to decide whether or not this statute is valid in the case of Watson v. Employers Liability Assurance Corporation, D.C.1952, 107 F.Supp. 494. These constitutional issues have been discussed repeatedly both in Federal and Louisiana decisions. We see no reason to reiterate these legal principles or to attempt to reconcile the conflicting views expressed in the Federal courts. Both in Churchman v. Ingram, and McDowell v. National Sur. Corp., writs of certiorari were applied for and in each case denied by the Supreme Court of Louisiana. We adhere to the views expressed in those decisions.

Furthermore, in the instant case the defendant prior to the issuance of its policy to Turley, qualified to do business in the ...

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