Young v. Travelers Ins. Co.

• Decision Date: 23 June 1941
• Docket Number: No. 9808.,9808.
• Citation: 119 F.2d 877
• Parties: YOUNG v. TRAVELERS INS. CO.
• Court: U.S. Court of Appeals — Fifth Circuit

119 F.2d 877 (1941)

YOUNG v. TRAVELERS INS. CO.

No. 9808.

Circuit Court of Appeals, Fifth Circuit.

May 23, 1941.

Rehearing Denied June 23, 1941.

Thos. L. Bailey and Lester E. Wills, both of Meridian, Miss., for appellant.

R. E. Wilbourn and J. C. Wilbourn, both of Meridian, Miss., for appellee.

Before HUTCHESON, HOLMES, and McCORD, Circuit Judges.

HUTCHESON, Circuit Judge.

The suit was for a declaratory judgment, that the insurer was not obligated to defend suits under or liable on, a policy of automobile insurance it had issued to one Roy Young as insured. Appellee was the plaintiff. The defendants were the insured and one Brand, who had sued Young for damages growing out of an alleged collision between Young's automobile and Brand's motorcycle on January 20, 1940.

The claim was that though obligated by Clause 6, the Notice of Accident Clause,¹ to give written notice to the company "as soon as practicable", upon the occurrence of an accident, the insured had not given notice until May 6, two and one-half months thereafter. The defense in general was, compliance with the provision. In particular it had two aspects. One was, that though insured had known on January 20, that an accident had happened in the vicinity of his automobile, he knew that he and his automobile had not been involved in it and reasonably believed that no claim was being or would be made that they were, and as soon as a claim had been made against him, he gave the notice. The other was; that the purpose and effect of the invoked clause was to provide timely notice to the insurer so that it could prepare its defense; that the notice had been given to it in time to do so, and no prejudice had resulted from the failure to give notice sooner; and that therefore, the provision of the policy had not been breached but had been substantially complied with.

The evidence showed without dispute that on January 20, 1940, the insured, a negro minister, was driving his automobile North on 16th Avenue in Meridian, Mississippi; that as he approached the intersection of 16th Avenue and 14th Street, Brand, a white man, on a motorcycle, headed East on 14th Street, came up to and crossed the intersection; that either, as Brand claims, being struck by insured's car, or as Young claims, passing the car without being struck, Brand skidded and turned over with resultant serious injuries which required his being taken to a hospital where he stayed for two months. It is also undisputed that Brand at the time of the accident charged Young with fault, in connection with it. Indeed Young himself testifies, "He remarked to me very kindly, `You didn't look'." Young also testified that two white men who had driven up and who took Brand to the hospital, said referring to Young, "Go get his car number.", and further, that a friend said to him, "Reverend, those men are taking that man to the hospital. I don't know — there might be some hereafter and you had better call the law out." Following that advice, Young called police officers to whom he said: "I happened to see the accident. I wasn't connected with it and thought I would call you out so that if anything should occur, I could call on you." The story he told the officers at that time, that he didn't hit the motorcycle, he has consistently stuck to. But Brand claimed in his suit and there are witnesses who will testify that Young's car did hit him. It is also in evidence that on May 4, 1940, Young received a letter, from the attorney for Brand, making claim, and that shortly thereafter on May 6, 1940, he gave the company notice. On this record, defendant, contesting plaintiff's claim that breach of the notice provision was made out, made two claims. The first was that May 4th, when Young received notice that he was being claimed against and not January 20th, when the accident occurred, was the date when he became obligated to give notice, because until he got notice of the claim, Young did not know he was involved in the accident. The second was that, taking January 20th, as the controlling date, the condition of the policy was complied with both because the time from January 20th to May 6th, was not unreasonable in itself and because no prejudice from failure to give notice earlier appearing, the notice given was a substantial compliance with the purpose of the notice provision, to give the insured time and opportunity to prepare its defenses.

Upon the first issue, that May 4th instead of January 20th, was the notice date, the district judge found, that the assured believed that he was not involved in the accident and that no claim would be made against him. But he found further; that a reasonably prudent man, situated as Young was, would not be and therefore Young was not, justified in reaching the conclusion that the accident did not require notice; that the circumstances of the accident put upon him the duty of giving notice; and that the giving of the notice on the 6th or 7th of May was not giving it "as soon as practicable" "after the occurrence of the accident." Upon the second issue, that no prejudice had resulted and there was substantial compliance even though January 20th be taken as the notice date, he found that it was necessary to show prejudice, that mere delay, of itself, would not be sufficient. But he found prejudice in the fact that when the insurer got the notice the claim had already gotten in to the hands of attorneys and that if it had gotten the notice earlier and particularly before the claim had been put in the attorney's hands it might have been in a position to make a more advantageous settlement.

Appellant complaining that, instead of finding the facts specially and stating separately his conclusions of law thereon, as required by Rule 52, Rules of Civil Procedure, 28 U.S.C.A. following section 723c, the district judge merely filed an opinion, insists that the failure to so find the facts has made it difficult to properly present plaintiff's claim and that the case should be reversed for failure to so find. But his main reliance here is on the two propositions urged below: (1) That Young had no reason to believe that within the notice provision of the policy an accident had occurred until claim was made against him; and (2) that no prejudice resulted from failure to give earlier notice and there was therefore substantial compliance within the notice provision. In support of his first point, he insists that whether the facts surrounding the accident and known to the insured on and after January 20th, put him under the duty of reporting, should be determined by a subjective rather than an objective standard. So insisting, he argues; that the things that were said to Brand at the time of the injury to Young and the calling of the officers by Brand, were all consistent with Young's position, that though he and his automobile were not really involved in the accident, he might, because he was a negro, be unjustly subjected to persecution or attack; and that the district judge, having found that Young believed that he was not at fault and that no claim would be made against him, ought, measuring Young's duty by a subjective test, to have found that there was no breach of the agreement. We do not think that this will do. No authorities are cited, none we think can be, for the substitution here of a subjective and internal for an objective and external test. Chapin v. Ocean Accident & Guaranty Co., 96 Neb. 213, 147 N.W. 465, 52 L.R.A.,N.S., 227, does not so hold. It is a case merely of a special application of the general rule² to its particular facts. As the clause is written, the duty of giving notice is not measured in terms of good faith. As written it is absolute in form and though its rigid terms have been by court construction, mitigated by importing into them, considerations of reasonable prudence, there is no warrant in the decisions for importing into it the element of "the personal equation." Too much water has run over the dam since that legal robot, the reasonably prudent man, with his objective or external standard, became dominant in the law.³

The district judge was right in applying the external or objective standard to this case and in declining to take Young's race and personal equation into account. We therefore reject as without merit, appellant's contention; that the facts surrounding the accident and known to Young were not...