U.S. Fidelity & Guaranty Co. v. Hearn
| Decision Date | 11 June 1936 |
| Docket Number | 8 Div. 730. |
| Citation | 233 Ala. 31,170 So. 59 |
| Parties | UNITED STATES & GUARANTY CO. v. HEARN et al. |
| Court | Alabama Supreme Court |
Rehearing Denied Oct. 8, 1936.
Appeal from Circuit Court, Colbert County; C.P. Almon, Judge.
Bill in equity by the United States Fidelity & Guaranty Company against McCoy Hearn and others. From a decree sustaining a demurrer to the bill and dismissing it, complainant appeals.
Reversed and remanded.
On Rehearing.
Coleman Spain, Stewart & Davies, of Birmingham, and Andrews & Almon of Sheffield, for appellant.
Horace C. Wilkinson, of Birmingham, and Henry D. Jones, of Florence for appellees.
The bill was by the surety company and sought to be maintained under the recent Declaratory Judgment Act. Gen. Acts 1935, pp. 777-779.
The bill as amended was challenged by demurrer, and the application for temporary injunction was heard on affidavits and oral testimony. The decree denied injunctive aid to prevent the hearing of suits at law; demurrer was sustained, and the bill was dismissed.
An object of the amended bill was to obtain an adjudication of appellant's liability to defend the several pending suits against McCoy Hearn, as owner and driver of an automobile, for personal injuries, by collision, to guests or passengers for hire who were with him in the car. The bill further sought adjudication of appellant's liability under its group policy of insurance (exhibited) issued to the Birmingham News Company by whom Hearn was employed.
The statute, among other things, contained the following:
This act was recently construed in Jefferson County v. Johnson (Ala.Sup.) 168 So. 450.
The general authorities are to the effect that an action may be brought by a liability insurer, under the declaratory judgment statute, against the insured and other parties who are suing the insured to recover for personal injuries or death, to have the court declare the liability vel non of the liability insurer to defend said pending suits. American Motorists' Ins. Co. v. Central Garage, 86 N.H. 362, 169 A. 121; Post et al. v. Metropolitan Casualty Ins. Co., 227 App.Div. 156, 237 N.Y.S. 64; Sauriolle, Adm'r v. O'Gorman, etc., 86 N.H. 39, 163 A. 717, 723; Malley v. American Indemnity Corporation, 297 Pa. 216, 146 A. 571, 81 A.L.R. 1322; Utica Mut. Ins. Co. v. Glennie et al., 132 Misc. 899, 230 N.Y.S. 673; Ohio Casualty Ins. Co. v. Plummer (D.C.Tex.) 13 F.Supp. 169; Borchard on Declaratory Judgments, pp. 492-497.
The question whether appellant was or was not bound to defend the suit is an important preliminary determination, and held to fall within the beneficent provisions of such a statute. Sauriolle, Adm'r, v. O'Gorman, etc.; American Motorists' Ins. Co. v. Central Garage, supra. The applicable policy provision is: "To defend in his name and behalf any suit against the Assured seeking damages on account of such Bodily Injury or Property Damage, even if such suit is groundless, false or fraudulent."
We are of the opinion, and so hold, that the bill as amended presented a justiciable question, as defined by this court in Jefferson County v. Johnson, supra; an actual existing controversy within the jurisdiction of the court, between the parties to such controversy and within the meaning of our act approved September 7, 1935. Gen.Acts 1935, pp. 777-779; Borchard on Declaratory Judgments (1934) p. 35; Sullivan & Sons Mfg. Co. et al. v. Ideal Building & Loan Ass'n, 313 Pa. 407, 170 A. 263, 98 A.L.R. 1.
It is not necessary, at this time, that we make other pronouncements than that the temporary injunction should have been granted to preserve the status quo. Such order will be made on a renewed application to the trial court.
The decree of the trial court is reversed, and the cause is remanded for a trial in this case of the facts of the respective liabilities vel non.
Reversed and remanded.
On Rehearing.
In view of another trial, it may be observed that there are exhaustive briefs on both sides on the question whether or not, at the time of the accident, the automobile in which the injured parties were riding was being used for carrying passengers for a consideration, or was rented to others, or used for livery purposes, within the excluded obligations of the policy.
The pertinent provisions of the policy are: "This policy shall exclude any obligation of the company" under the contract agreements "while any disclosed automobile is being rented to others or used for livery purposes or for carrying passengers for a consideration." If any of these material alternatives or conditions existed within the meaning of the contracting parties, at the time of the injury, then liability or indemnity therefor is not within the coverage of the policy issued by complainant.
The rule of a strict construction, and that obtaining as to ambiguous provisions in such policies, are well understood or declared in this jurisdiction (Equitable Accident Insurance Co. v. Osborn, 90 Ala. 201, 9 So. 869, 13 L.R.A. 267; Illinois Automobile Ins. Exch. v. Southern Motor Sales Co., 207 Ala. 265, 92 So. 429, 24 A.L.R. 734; Gilliland v. Order of Ry. Conductors of America, 216 Ala. 13, 112 So. 225; Inter-Ocean Casualty Co. v. Foster, 226 Ala. 348, 147 So. 127); and the rule of a strict construction applied in this case.
The word "used," considered as to facts falling within a statute in Ex parte Smith (Smith v. State), 212 Ala. 262, 102 So. 122,...
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