Travelers Mut. Casualty Co. v. Rector

• Decision Date: 05 November 1943
• Docket Number: No. 12548.,12548.
• Parties: TRAVELERS MUT. CASUALTY CO. et al. v. RECTOR et al.
• Court: U.S. Court of Appeals — Eighth Circuit

138 F.2d 396 (1943)

TRAVELERS MUT. CASUALTY CO. et al. v. RECTOR et al.

No. 12548.

Circuit Court of Appeals, Eighth Circuit.

November 5, 1943.

Edgar Musgrave, of Des Moines, Iowa (Allen Whitfield and Walter W. Selvy, both of Des Moines, Iowa, and Daniel J. Gross and Bryce Crawford, Jr., both of Omaha, Neb., on the brief), for appellants.

Alfred C. Munger, of Omaha, Neb. (Varro H. Rhodes, of Omaha, Neb., and James Madison, of Bastrop, La., on the brief), for appellee Zelma Rector, individually, and as tutrix for the minor, Patricia Ann Rector.

Raymond M. Crossman, of Omaha, Neb. (J. J. Hess, of Council Bluffs, Iowa, and Ralph M. West and John L. Barton, of Omaha, Neb., on the brief), for appellee Ford Brothers Van & Storage Company.

Francis S. Gaines, of Omaha, Neb. (Edward J. Shoemaker, of Omaha, Neb., on the brief), for appellees Allied Van Lines, Inc., and Hartford Accident & Indemnity Co.

Before SANBORN and RIDDICK, Circuit Judges, and LEMLEY, District Judge.

SANBORN, Circuit Judge.

Ford Brothers Van and Storage Company, a Nebraska corporation (hereinafter referred to as the Ford Company), is a carrier of freight by motor vehicle. On September 6, 1937, a tractor-trailer truck owned by it, and being driven by one of its employees, collided with an automobile near Bunkie, Louisiana. The occupants of the automobile were James Rector, Harley Rogers, Jr., and Mildred Rogers, his wife. They were all injured, and James Rector (the husband of appellee Zelma Rector) died of his injuries. The driver of the tractor-trailer at once notified the Ford Company, at Omaha, Nebraska, of the accident, and the company notified John N. Eddy, the agent of the Travelers Mutual Casualty Company (of Iowa), at Council Bluffs, Iowa. This insurance company, which will be referred to as the Travelers, had in force a policy of liability insurance issued to the Ford Company covering the tractor-trailer. Eddy immediately notified the Travelers of the accident, at its home office in Des Moines, Iowa. On September 7, 1937, the Travelers advised its claim adjuster at Omaha that its policy did not cover the tractor-trailer while being operated in Louisiana, and the adjuster notified Eddy and the Ford Company of the Travelers' position.

A suit was brought against the Ford Company and others in a state court of Louisiana by Zelma Rector, on her own behalf and on behalf of her minor daughter, to recover damages for the death of James Rector. Harley Rogers, Jr., and Mildred Rogers also brought suits in the same court against the same defendants to recover damages. The Travelers, which was not licensed in Louisiana, refused to investigate or to defend these suits, and the Ford Company conducted its own defense, at its own expense. Zelma Rector obtained a judgment against the Ford Company for $10,000, and each plaintiff in the two Rogers suits secured a judgment against it for $250. The judgments provided for the payment of interest and costs. Executions upon the judgments were returned unsatisfied.

Zelma Rector thereafter brought this action in the United States District Court for the District of Nebraska to recover upon her Louisiana judgment. She joined as defendants the Ford Company, the Travelers, and the Hawkeye Casualty Company, an Iowa insurance company (hereinafter referred to as the Hawkeye), which is the reinsurer and successor of the Travelers. She asserted that the liability policy of the Travelers covered the tractor-trailer at the time and place of the accident, and that, by the terms of the policy, Travelers was liable to her for the amount of her judgment.

The Ford Company, in its answer, while asserting lack of jurisdiction and denying that Zelma Rector owned the judgment in suit, cross-claimed against the Travelers and the Hawkeye for the expenses the Ford Company had paid in connection with the defense of the Louisiana suits, and for the amount of any judgment against it which might be awarded to Zelma Rector by the District Court. The Ford Company joined in the assertions of Zelma Rector that the Travelers' policy was intended to, and did, cover the tractor-trailer at the time and place of the accident. The Ford Company prayed for judgment against the Travelers and the Hawkeye and for a reformation of the policy "to evidence and establish the true agreement" between the Ford Company and the Travelers.

The Travelers and the Hawkeye, in their pleadings, denied that there was any liability under the policy in suit to either the Ford Company or Zelma Rector.

The issues were tried to the District Court, a jury having been waived. The controlling issues raised by the pleadings and by the evidence, so far as pertinent on this appeal, were: (1) Did the liability insurance policy issued by the Travelers to the Ford Company, in force on September 6, 1937, cover the tractor-trailer while being operated in Louisiana? (2) If the policy did not, by its terms, cover the tractor-trailer while being operated in Louisiana, was the Ford Company entitled to have the policy reformed so as to provide coverage throughout the United States and Canada? The District Court filed findings of fact and conclusions of law, resolving both of these issues in favor of Zelma Rector and the Ford Company, and entered a judgment accordingly, from which this appeal is taken.¹

The Travelers and the Hawkeye have appealed from the judgment, asserting, in substance, that there was no adequate evidentiary basis for the District Court's determination that the Travelers' liability policy covered the tractor-trailer while being operated in Louisiana on September 6, 1937, or for the Court's conclusion that if, on appeal, the policy were construed as not covering the tractor-trailer at that time and place, the policy should be reformed to provide unlimited coverage in the continental United States and Canada. The appellants (the Travelers and the Hawkeye) also assert that, under the evidence, the tractor-trailer, at the time of the collision, was being operated in an "illicit trade or prohibited trade or transportation" which excluded it from coverage under the terms of the policy.

We must first consider whether there was substantial evidence to sustain the finding of the District Court that the liability policy of the Travelers covered the tractor-trailer at the time and place of the collision. If there was such evidence, then the finding is binding upon us unless it is against the clear weight of the evidence or was induced by an erroneous view of the law. ?tna Life Ins. Co. v. Kepler, 8 Cir., 116 F.2d 1, 4, 5. This Court will not retry questions of fact, Storley v. Armour & Co., 8 Cir., 107 F.2d 499, 513, and it is to be remembered that the power of the trial court to decide such questions is not limited to deciding them correctly. Thompson v. Terminal Shares, Inc., 8 Cir., 89 F.2d 652, 655; Pittsburgh Plate Glass Co. v. National Labor Relations Board, 8 Cir., 113 F.2d 698, 701, affirmed 313 U.S. 146, 61 S.Ct. 908, 85 L.Ed. 1251.

The pertinent history of the policy in suit is as follows: On December 18, 1936, the Ford Company made a written application for a liability policy on a printed form furnished by the Travelers. In its application the Ford Company stated that it occasionally did long distance hauling, that its longest haul in number of miles was 175 to 200, that it operated mostly in Iowa, with occasional trips into Nebraska, that the merchandise hauled was household goods and personal effects, and that the equipment to be insured was one tractor and one trailer operated between Iowa and Nebraska. The insurance was applied for through John N. Eddy, the Travelers' agent in Council Bluffs, Iowa. Pursuant to this application, the Travelers issued to the Ford Company liability policy No. 23305 D, in conventional form, with the usual provisions for the investigation and defense of personal injury and death claims and payment of any judgments recovered thereon. The policy covered the equipment described in the application for the term January 1, 1937, to January 1, 1938. The policy contained a "Statement 9", as follows:

"This automobile is principally used at See Territorial Endorsement Attached (State location and where to be operated)"

The endorsement referred to limited the operation of the equipment described in the policy to the state of Iowa, but permitted the assured "to make occasional trips into adjoining states of not more than 25 miles."

In the policy, under the heading "Conditions, Limitations and Agreements," and opposite a marginal note, "Limitation of Use," appears the following: "This policy does not cover any loss, damage or expense * * * while the automobile insured hereunder is operated, maintained or used (a) beyond the limits of the United States * * * and Canada * * * or (d) in any illicit trade or prohibited trade or transportation * * *."

The policy also contained the following provisions:

"No erasures or change appearing in this policy as originally written, and no alteration, change or waiver of any of its terms, provisions or conditions, shall be valid unless made by written endorsement attached hereto and countersigned by a duly authorized agent of the Company; nor shall notice to or the knowledge of any officer of the Company or of any agent or other person received or acquired before or after the date of this policy be held to effect a waiver, change or alteration of any part of this contract.

* * * * *

"This policy is issued and accepted subject to the conditions, limitations, agreements and representations set forth herein or endorsed hereon, and upon acceptance of this policy the Assured agrees that its terms embody all agreements then existing between himself and the Company or any of its agents relating to the insurance described herein, and no officer, agent or other representative of the Company shall have power to waive any of the terms of this policy unless such waiver be written upon or attached...