U. S. Fidelity & Guaranty Co. v. Baldwin Motor Co.

• Decision Date: 04 February 1931
• Docket Number: No. 1188-5525.,1188-5525.
• Citation: 34 S.W.2d 815
• Parties: U. S. FIDELITY & GUARANTY CO. v. BALDWIN MOTOR CO.
• Court: Texas Supreme Court

34 S.W.2d 815

U. S. FIDELITY & GUARANTY CO. v. BALDWIN MOTOR CO.

No. 1188-5525.

Commission of Appeals of Texas, Section B.

February 4, 1931.

Error to Court of Civil Appeals of Sixth Supreme Judicial District.

Suit by the Baldwin Motor Company against the U. S. Fidelity & Guaranty Company. Judgment for plaintiff was affirmed by the Court of Civil Appeals [18 S.W.(2d) 826], and defendant brings error.

Judgment of the district court and judgment of the Court of Civil Appeals both reversed, and judgment rendered for defendant.

Seay, Seay, Malone & Lipscomb, of Dallas, and Tomas G. Pollard, of Tyler, for plaintiff in error.

Edwards & Hughes, of Tyler, for defendant in error.

RYAN, J.

The Baldwin Motor Company brought this suit to recover attorneys' fees and expenses incurred in defending itself against a damage suit filed in the district court of Angelina county by the parents of Florine Eugenia Rogers, a child seven years of age, because of the child's death at Lufkin, in said county, on March 5, 1928, alleged to have been the result of the Baldwin Motor Company's negligence.

The Baldwin Motor Company carried a liability policy with the United States Fidelity & Guaranty Company.

Upon being sued, the motor company notified the insurer to defend the suit in accordance with the terms of the policy. The insurance company's contention was that the policy did not cover the accident in question, and it refused to defend the suit; whereupon the motor company, after employing attorneys and making an investigation, succeeded in having the Rogers suit dismissed.

The material portions of the policy are as follows:

"In consideration of the premium and subject to the terms, limits and conditions set forth herein, does hereby insure the assured, named and described as such in the schedule of Statements hereto, against liability for loss and/or expense, arising or resulting from claims upon the assured for damages in consequence of an accident occurring within the limits of the United States and Canada during the term of this policy resulting in

"Injury to Persons

"(A) Bodily injuries, or death resulting at any time therefrom, suffered by any person or persons, not herein excepted, and

"Damage to Property of Others.

"(B) Damage to or destruction of property, including the loss of use thereof, excepting property in the custody of the Assured and for which the Assured is legally responsible; or property carried in or on any automobile of the assured by reason of

"(1) The operation and/or maintenance of an Automobile Garage and/or sales agency and/or service station, including the repair shop, if any, conducted in connection therewith, all as located and described in the Schedule of Statements of this policy.

"(2) The ownership, maintenance, operation and/or use of any style, type or make of automobile, tractor or trailer by any person, not herein excepted, for any purpose, not herein excepted, incidental to the Assured's business of operating an Automobile Garage and/or sales agency and/or Service Station all as located and described in the Schedule of Statements of this policy, and for pleasure use, including the transportation or delivery of goods or merchandise for prospective customers as is strictly incidental to the demonstration and sale of automobiles.

"(3) The making of repairs and ordinary alterations (not of a structural character) for the maintenance of the described premises in good condition.

"(4) The renewal of existing mechanical equipment on the premises occupied by the Assured as herein described.

"Limits of Liability for Personal Injury

"The Company's liability to one or all Assureds under Clause A above is limited to five thousand dollars ($5,000.00) to any one person; and subject to the same limit for each person, the Company's total liability from loss from any one accident is limited to ten thousand dollars ($10,000.00).

"Limits of Liability for Property Damage

"The Company's liability to one or all Assureds under Clause B above on account of any one accident is limited to one thousand dollars ($1,000.00), irrespective of whether property of one or more than one person is damaged or destroyed.

"Defense of Suits

"In addition to the above, the Company does hereby agree

"(C) To defend, in the name and on behalf of the Assured any suit brought against the Assured to enforce a claim, whether groundless or not, on account of damages suffered or alleged to be suffered under the circumstances hereinabove described;

"Payment of Expenses

"(D) To pay the expenses incurred in defending any suit described in the preceding paragraph, also the interest on any judgment within the limits of the insurance hereby granted and any costs taxed against the Assured on account thereof;

"Reimbursement of Expenses

"(E) To reimburse the Assured for the expense incurred in providing such immediate surgical relief as is imperative at the time of any accident covered hereunder."

The statements as to location, addresses, and places of business are as follows:

"The following statements numbered one and nine, inclusive, are hereby made a part of this policy, and are warranted by the assured to be true by the acceptance of this policy:

"Schedule of Statements

"Statement 1. Name of Assured—The Baldwin Motor Company.

"Statement 2. Address of Assured—302 N. Broadway, Tyler, Texas.

"Statement 3. The Assured is corporation.

"Statement 4. Assured's interest in the premises is Lessee.

"Statement 5. The term of this policy begins at noon on the 10th day of July, 1927, and ends at noon on the 10th day of July, 1928, standard time.

"Change in Limits

"Statement 6. In lieu of the limits of liability printed in the body of this policy, the following stated limits shall prevail:

"For public liability: First limit Five Thousand Dollars ($5,000.00).

"Second limit Ten Thousand Dollars ($10,000.00).

"For property damage: Highest limit One Thousand Dollars ($1,000.00).

"Premium Computation

"Statement 7.

                ===================================================================================================
                     Location           Estimated Annual Payroll of all          Rate per $100.00 of
                Each Branch must be     Employees, active officers at                  Payroll            Premium
                separately listed.      $2,000.00.                             1st.      2nd.     3rd
                ---------------------------------------------------------------------------------------------------
                320 N. Broadway         $20,000.00   Public
                311 N. College St.                   Liability                 .45                          $ 90.00
                  Tyler, Texas.                      Property
                                                     Damage                    .30                            60.00
                ---------------------------------------------------------------------------------------------------
                Nacogdoches, Texas.     $ 6,000.00   Public
                                                     Liability                 .45                          $ 27.00
                                                     Property
                                                     Damage                    .30                            18.00
                ---------------------------------------------------------------------------------------------------
                Henderson, Texas.       $ 1,500.00   Public                                                 $  6.75
                                                     Liability                 .45         .45                20.25
                Jacksonville, Texas.    $ 4,500.00   Property                                                  4.50
                                                     Damage                    .30         .30                13.50
                ---------------------------------------------------------------------------------------------------
                                                                                        Total Premium       $240.00
                

"The first rate shall be applied per $100.00 of payroll for the first $25,000.00 of annual payroll of each branch.

"The second rate shall be applied per $100.00 of payroll in excess of $25,000.00 up to and including $50,000.00 annual payroll for each branch.

"The third rate shall be applied per $100.00 of payroll in excess of $50,000.00 annual payroll for each branch.

"Statement 8. The minimum annual premium for this policy is:

                Public Liability             $24.00
                Property damage               14.00
                                             _______
                   Total                     $38.00"
                

The policy also provided that it shall cover no liability of the assured for any injuries or damage caused by an automobile while being operated by any person under sixteen years of age, or when used in any race or speed contest.

The petition by Mr. and Mrs. Rogers against the Baldwin Motor Company alleged that the Baldwin Motor Company was a domestic corporation, with principal office and place of business in Tyler, Smith county, Tex., with a local office and place of business and a local agency and agent in the city of Lufkin, Angelina county, Tex., where it was operating and doing business on the 5th day of March, 1928; that, on the date of the death of the girl, the Baldwin Motor Company was operating a garage and automobile sales agency in the City of Lufkin, and in the conduct of said business they employed certain agents and servants to carry on their business, among said employees being one Deloach O'Neil, a negro boy, fifteen years of age, who was in the performance of his duties to the Baldwin Motor Company at the time of the accident.

The petition alleged that the negro boy, while in the company's employ and operating one of its automobiles, negligently ran over and killed the minor child of the plaintiffs therein; said negligence was predicated upon "one or more of the following acts of negligence of said employee, operating either singularly or concurrently to produce said injuries and death," viz.:

(a) Operating said automobile at a rate of speed of forty miles per...