Travelers Ins. Co. v. Ship By Truck Co.
| Decision Date | 07 March 1938 |
| Docket Number | No. 10929.,10929. |
| Citation | 95 F.2d 149 |
| Parties | TRAVELERS INS. CO. v. SHIP BY TRUCK CO. et al. |
| Court | U.S. Court of Appeals — Eighth Circuit |
O. C. Mosman, of Kansas City, Mo. (Mosman, Rogers, Bell & Buzard, of Kansas City, Mo., on the brief), for appellant.
John S. Wright, of Kansas City, Mo. (Whitson Rogers and Abraham E. Margolin, both of Kansas City, Mo., on the brief), for appellees.
Before STONE, SANBORN, and WOODROUGH, Circuit Judges.
The Travelers Insurance Company sued the Ship By Truck Company and its principal owner and managing officer Walter A. Graham to recover back three several payments of money which the insurance company was compelled to make by reason of its automobile liability policy with rider issued to the truck company and such officers. The case was heard on demurrer to the plaintiff's amended petition. The demurrer was sustained and there was a judgment of dismissal upon the refusal of the plaintiff to plead further. The insurance company appeals.
The petition disclosed that the insurance company issued its automobile and truck liability policy in ordinary form to the defendants, the truck company and Walter A. Graham, limited to bodily injury damage not exceeding $20,000 for one person and $40,000 for one accident. During the period of the insurance the negligent operation of a truck caused an accident in which injuries were inflicted upon three persons, one of whom died therefrom, and claims were made against defendants on account thereof. Suits were brought on the claims against the defendant truck company and there was a final judgment in one of the suits for the sum of $25,000. As the policy stood when written there would have been no liability upon the insurance company to pay the judgment because the policy contained the usual notice clause by which the giving of timely written notice of the accident to the insurance company was made a condition precedent to any liability on its part* and it was alleged that defendants failed, neglected, and refused to give the required notice of the pendency of the suit of one of the injured persons until after a trial of the same was had and judgment rendered and also failed, neglected and refused to give notice of the pendency of the other claims and suits. But "in order for the defendants to comply with the laws and regulations of the state of Kansas (section 66-1,102) in which they were doing business and without the payment of any additional premium by the defendants the said policy was amended by endorsement and rider thereto," which rider contained a provision that upon the failure of the defendants to pay any final judgment for damages for personal injuries including death caused by motor vehicles operated by defendants within the limits set forth in the schedule of the rider the judgment creditor could maintain action to compel such payment.**
By virtue of such "direct action" provision of the policy rider the injured person who had obtained judgment against the defendant truck company enforced his judgment against the insurance company to the extent of the policy limit and the insurance company paid $20,000 and costs on account thereof. As to the other two suits arising out of the same accident, the insurance company paid the claimants in discharge of its obligation under the policy and rider the total sum of $5,500.
The rider attached to the policy contained the following provision: "It is further understood and agreed that the conditions, limitations and provisions of the policies shall remain in full force and effect as binding between the named Assured and the Companies and if the Companies pay any loss under the Policies, which has resulted directly or indirectly from the violation of the conditions, limitations or provisions of the Policies by the Assured, the Assured agrees to reimburse the Companies to the full extent of such loss."
It is charged in the petition of the insurance company that by reason of defendants' breach of the notice clause of the policy the insurance company was deprived of the opportunity of...
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