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General Accident Fire and Life Assurance Corp. v. Browne

December 15, 1954

GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION, LIMITED, PLAINTIFF-APPELLANT,
v.
J. RAY BROWNE AND GENERAL CASUALTY COMPANY OF AMERICA, DEFENDANTS-APPELLEES.



Author: Schnackenberg

Before FINNEGAN, SWAIM and SCHNACKENBERG, Circuit Judges.

SCHNACKENBERG, Circuit Judge.

Plaintiff appeals from a judgment of the District Court entered on October 5, 1953, in an action brought by plaintiff.

Plaintiff's amended complaint for declaratory judgment*fn1 seeks a judgment declaring that a policy of liability insurance issued by plaintiff to defendant Browne, was void and unenforceable as against plaintiff, or, in the alternative, that if the court should find the policy valid and existing, it should declare that a similar policy, previously issued to Browne by defendant, General Casualty Company of America (sometimes herein referred to as "General Casualty"), was likewise valid and existing and that Browne was co-insured by plaintiff and General Casualty.

Answers were filed by both defendants, Browne asserting that plaintiff had waived its rights and was estopped by its conduct to deny the validity of its policy. Browne in a supplemental counterclaim asks for judgment against either or both plaintiff and General Casualty Company for the costs and expenses of defending certain personal injury actions, to which we shall shortly allude, for costs and expenses of defending the declaratory judgment action of plaintiff and for $24,000 for the use and benefit of Browne or one Chandler, the plaintiff in said personal injury actions, also that Browne be awarded damages against either or both plaintiff and General Casualty for a breach of contract. Both counter defendants answered.

No questions arising upon the pleadings are presented.

After a trial, the court declared and adjudged on October 5, 1953, that General Casualty's policy of liability insurance on Browne's automobile had been effectively cancelled and that such cancellation was not voidable; that plaintiff's similar policy was valid and existing and that it was liable thereon (by reason of two judgments recovered by Frederic A. Chandler, against Browne, one as administrator of his wife's estate, in the sum of $10,000, with interest and costs, and one individually, in the same amount, plus $1,000 for medical expenses of Browne, and $4,000 for his attorneys' fees incurred in the defense of the actions culminating in said judgments and in the defense of the case at bar).

There appears to be no dispute in this case as to the evidentiary facts proved on the trial below. We now state them.

In Logansport, Indiana, the R.D. Pierce Agnecy, Inc., (sometimes herein referred to as "Pierce"), in 1949 represented eight casualty companies among which were the plaintiff and General Casualty, whom Pierce had represented since 1938. This office had 400 to 500 casualty customers. Plaintiff knew that Pierce represented other insurance carriers.

In the Pierce office it was customary to interchange insurance among the companies.

Plaintiff had a written agency agreement with Pierce governing their relationship, among the terms of which was the following:

"Corporation hereby grants authority to Agent in the following territory; viz., Logansport, Cass County, Indiana, and vicinity to solicit and submit applications; to issue and deliver policies, certificates, endorsements, binders, * * * to collect and receipt for premiums * * * to cancel such policies and obligations in the discretion of the agent where cancellation is legally possible * * *."

Plaintiff had notified the Insurance Department of the state of Indiana that Pierce was authorized to act as its agent.

Some time prior to October 3, 1949, General Casualty had issued a policy of liability insurance upon the automobile of Browne. This policy had been negotiated through Pierce as agent of General Casualty, that agency having had Browne as a client since 1943 or 1944, and Browne having requested Pierce to keep him insured against liability for his automobile. The original policy had been renewed by General ...


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