Travelers Ins. Co. v. Employers Cas. Co.

• Decision Date: 28 June 1963
• Docket Number: No. 16185,16185
• Citation: 370 S.W.2d 105
• Parties: The TRAVELERS INSURANCE CO., Appellant, v. EMPLOYERS CASUALTY CO., Appellee.
• Court: Texas Court of Appeals

Page 105

370 S.W.2d 105

The TRAVELERS INSURANCE CO., Appellant, v. EMPLOYERS CASUALTY CO., Appellee.

No. 16185.

Court of Civil Appeals of Texas, Dallas.

June 28, 1963.

Rehearing Denied July 26, 1963.

Gay & Meyers, Austin, for appellant.

Leachman, Gardere, Akin & Porter, and Gordon H. Rowe, Jr., Dallas, for appellee.

DIXON, Chief Justice.

This case involves the interpretation and application with reference to particular facts of a Texas Standard Form automobile liability policy covering trucks while unloading ready-mixed concrete.

The policy in question was issued by Employers Casualty Company, hereinafter called Employers, to Capitol Aggregates, Inc., hereinafter called Capitol. The latter company makes and sells ready-mixed concrete. The concrete is mixed while being transported in a large revolving drum on a truck.

The accident which gave rise to the present controvery occurred at the site of the construction of a new high school building in Austin, Travis County, Texas. In the performance of Capitol's contract with the general contractor, one of Capitol's trucks arrived at the construction site, lowered a chute at the rear of the truck which caused the ready-mixed concrete to flow down the chute into a bucket attached to a crane. The bucket was then moved by the crane to a form into which the concrete was emptied from the bucket. In the course of moving a bucket of concrete to the form the crane collapsed, killing three employees of the general contractor.

The bucket and crane were not owned or operated by Capitol. They were owned and were being operated by Borders Steel Erection Company, hereinafter called Borders. The latter company was the concrete subcontractor on the construction project. There was no privity of contract between Capitol and Borders. Capitol's contract was with the general contractor.

Travelers Insurance Company, appellant, hereinafter called Travelers, had issued a Texas standard form contractor's general liability policy to Borders. The beneficiaries of the three men killed brought suit against Borders and their claims were settled by Travelers for $61,020.30.

Thereafter Travelers brought suit in Travis County against Employers seeking a ruling that primary coverage of the accident was afforded under the policy issued to Capitol by Employers because the policy covered the use of Capitol's trucks while loading and unloading. The two insurance companies are agreed that the payment of $61,020.30 was a reasonable settlement.

Appellee Employers filed a plea of privilege asking that the suit be transferred to Dallas County where appellee has its principal office. Travelers filed a controverting affidavit alleging that venue properly lay in Travis County under subd. 23 of Art. 1995, Vernon's Ann.Civ.St., which permits suit to be maintained against a corporation in the county where the cause of action arose.

Appellee's plea of privilege was sustained and on appeal the order was affirmed. Travelers Insurance v. Employers Casualty Co., Tex.Civ.App., 335 S.W.2d 235, wr. ref. n. r. e. The Court of Civil Appeals at Austin upheld the trial court's implied finding that appellant had failed to prove a cause of action, therefore subd. 23 Art. 1995, V.A.C.S. could not be invoked to cause the case to be transferred to Dallas County.

In a trial in Dallas County on the merits before the court without a jury, judgment was rendered in favor of Employers that Travelers take nothing by its suit.

Travelers rests its appeal on one point of error. It alleges that the trial court erred in holding that 'the unloading of the ready-mixed concrete was completed at the instant it was emptied from the trans-mix truck into a bucket attached to a crane which was to carry it to a place it would occupy in the slab, instead of holding that the unloading continued while the concrete was carried in a continuous movement from the truck to the form.'

It is generally agreed that in policies such as that here under consideration the phrase 'including loading and unloading' is a phrase of expansion and extension. But the decisions are not in agreement as to the exact extent of the expanded coverage.

One line of decisions follows the 'coming to rest' theory. The substance of this theory is that the unloading 'includes the process of removing or lifting the article from the truck up to the point where the article is first set down or ceases in the movement which took it from the truck.' Pacific Auto Ins. Co. v. Commercial Casualty Ins. Co., 108 Utah 500, 161 P.2d 423, 160 A.L.R. 1251 (1945) and annotations following.

The other line of decisions follows the 'complete operation' theory, which appellant contends has been adopted as the rule in Texas. Red Ball Motor Freight v. Employers Mut. Liability Ins. Co., 5 Cir., 189 F.2d 374; Allstate Ins. Co. v. Valdez, D.C., 190 F.Supp. 893.

However that may be, the authorities in other jurisdictions are apparently not in harmony as to the meaning of the 'complete operation' theory. Some cases hold that the theory means that the unloading continues until an article, such as concrete, reaches its 'ultimate destination,' or 'the place of its use.' Lamberti v. Anaco Equipment Corp., 16 A.D.2d 121, 226 N.Y.S.2d 70; Wagman v. American Fidelity & Casualty Co., 304 N.Y. 490, 109 N.E.2d 592.

Other cases hold that a 'complete operation' theory means that the unloading continues 'to the place where the employees of insured turn them over to the party to whom they are to make delivery.' Pacific Auto Ins. Co. v. Commercial Casualty Ins. Co., supra. This is the holding in American Employers Ins. Co. v. Brock, Tex.Civ.App., 215 S.W.2d 370, wr. ref. n. r. e., a Texas case relied on by appellant.

We are of the opinion that under the particular circumstances of this case we must hold that the unloading of Capitol's truck had been completed before the accident occurred, therefore the judgment should be affirmed. We base our conclusions on four grounds, which we shall now state.

(1) We believe we are bound by the holding of our Supreme Court when it declined to grant a writ of error in Travelers Ins. Co. v. Employers Casualty Co., Tex.Civ.App., 335 S.W.2d 235 with the notation 'refused, n. r. e.' The notation means that though the Supreme Court may not have agreed with everything said in the opinion of the Austin Court of Civil Appeals, it did agree that the judgment of the Court of Civil Appeals was correct. The only possible ground the Supreme Court could have had for holding that the judgment was correct was that Travelers had failed to plead and prove a cause of action as required by subd. 23 of Art. 1995, V.A.C.S. Such a holding necessarily implies that the unloading had been completed at the time of the accident, for it is undisputed that the accident occurred and that it occurred in Travis County. If the unloading had not been completed at the time of the accident the judgment sustaining Employers' plea of privilege could not have been correct.

Appellant in seeking to avoid the effect of the Supreme Court's holding says that the judgment in Travelers Ins. Co. v. Employers Casualty Co., Tex.Civ.App., 335 S.W.2d 235 has no binding effect because it was merely an order entered after a venue hearing at which less evidence was introduced than in the trial on the merits. We cannot agree with this contention.

When it is sought to retain venue in a county where the cause of action arose under subd. 23 of Art. 1995, V.A.C.S., it is necessary at the venue hearing to plead and prove a cause of action. Victoria Bank & Trust Co. v. Monteith, 138 Tex. 216, 158 S.W.2d 63, 67; Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91.

As to the evidence, the only difference in the evidence introduced at the venue hearing and at the trial on the merits was that at the hearing on the merits a general contractor named George Brock testified. He stated that the ready-mixed concrete, because of its nature and quality, begins to harden immediately upon its coming to rest, hence is not a storage item 'except at the place where you finally want it to come.' However Brock's testimony was only cumulative of the testimony given at the venue hearing by H. W. Haile, Jr., Capitol's Vice-President and Manager, which testimony was read into the record at the trial on the merits. Haile testified that it is not practicable to 'stockpile' mixed concrete.

(2) The Austin Court of Civil Appeals in its opinion above referred to holds that Texas follows the 'coming to rest theory.' Appellant, as we have stated, contends that Texas follows the 'complete operation' theory. Even if we were to accept appellant's contention in that regard we would nevertheless hold that the Texas version of the 'complete operation' theory does not go so far as to embrace the 'ultimate destination' doctrine of Lamberti v. Anaco Equipment Corp., 16 A.D.2d 121, 226 N.Y.S.2d 70 and other cases. It adheres to the principal announced in American Employers Ins. Co. v. Brock, Tex.Civ.App., 215 S.W.2d 370, to the effect that the unloading is completed when the material being unloaded is turned over to the party to whom delivery is to be made. In this case the party was Borders, the subcontractor acting for and in behalf of the general contractor with whom Capitol had its contract. The actual unloading of the material from Capitol's truck into Borders' bucket had been completed and Borders' crane collapsed after the concrete had been turned over to Borders.

Appellant relies, among others, on both the Brock case above cited, and the case of Panhandle Gravel Co. v. Wilson, 248 S.W. 2d 779. The facts in the above two cases differentiate them from the present case.

In the Brock case the facts undoubtedly brought the case within the loading provision of the policy. The opening and closing of a sidewalk elevator shaft by the insured's employees was certainly a part of the loading process whereby the employees of the truck owner undertook to load a can of...