*1 7M directly Suits Appellant, ELBERT, justly Florence R. may operate
Mrs.
CASUALTY
MUTUAL
LUMBERMAN’S
under
Law of Louisiana
the Civil
Appellee.
COMPANY,
important, Wright
jury verdicts are
see
14353.
No.
Cir.,
Theatres, 5
v. Paramount-Richards
198 F.2d
but where there is
States Court of
United
by jury,
as in the
common law
trial
Circuit.
Fifth
courts,
repeatedly
federal
been
rec
has
.
Feb.
1953.
ognized
juries
to find
prone
more
Rebearing
17, 1953.
March
Denied
heavy damages
liability and to assess
company
than
liability insurance
against the
mere mention of
insured. The
jury
error in all
insurance
ato
is reversible
union,
of the
Wheeler
but four states
Rudek,
601, 4 A.L.R.
74 N.E.2d
Ill.
in
With
2d
both the insured and
F.2d
opinion,
see
former
For
could,
present,
the federal courts
surer
La.,
preju
Shreveport,
Madison,
Whit-
to avoid
justice
furtherance
M.
John
La.,
dice,
separate
appellant.
the cause of
Shreveport,
order
trials
to
Jack,
field
ex
the insured and
to
Brumfield,
Rouge,
Baton
Jr.,
H. Alva
coverage
policy. See
istence and
of the
Christovich, New Or-
La.,
Alvin R.
42(b),
Federal Rules
20(b)
Rules
La.,
leans,
amici curiae.
Procedure, 28
the ab
U.S.C.A.
In
Civil
La.,
Shreveport,
Mayer,
Chas. L.
sence of the insured
pellee.
adequate power to
the federal court has no
HUTCHESON,
Judge, and
Chief
protect
a defendant
insurance
RIVES, Circuit
STRUM and
recognized preju
from
well
that known and
to
dice.1 This Court would be naive not
CURIAM.
PER
realize
that factor has much to do with
petition for re-
ordered
It
bringing
of most
the automobile
dam
numbered
entitled and
hearing in the above
age suits in the federal courts rather than
be,
hereby
denied.
and it
cause
in the state courts of Louisiana.
casualty
The transfer of most of the
Judge (dissenting).
RIVES, Circuit
damage
litigation, from the state
suit
to
strong
original hearing,
had
I
On the
any
courts thus defeats
beneficent
my
to
which were submitted
misgivings
public
of the Louisiana direct action
crystallize my
brothers,
to
was unable
but I
operate
intended
statute
to
civil
enough
justify
dis-
to
thinking clearly
system
of Louisiana.
is further
law
ques-
consideration
Continued
sent.
purpose
direct conflict with the
me that there is some-
has convinced
“possible
designed
avoid
legal
our
fundamentally wrong with
thing
state courts
favor of
discrimination
they permit
great bulk
theories when
litigants”, 54
over non-resident
resident
damage
litigation
casualty
Am.Jur.,
Courts
United States
of the federal
clog the dockets
Louisiana
play
give full
dis-
operates rather
understand,
while,
some
courts,
I
casualty
crimination
enough
actually
have
do not
judges
companies.
busy.
keep them
litigation to
impartially
never,
conducted
that verdicts
re
in court
“But a trial
only
juries
argue
on the issues
rendered
spondents
this
brief
**
pleadings
controversy
evidence.”
private
made
was,
‘purely a
Johnson,
R.
Co. v.
public.’
N. Y. Central
R.
importance
of no
duty
L.
U.S.
state,
interest
whose
uphold,
Ed. 706.
is con
counsel alike
court and
fairly
litigation
every
cerned
*2
jurisdiction
me that federal
Indemnity
York,
seems to
v. Globe
of New
Co.
upon
declined
several La.
should
denied or
Mary
be
So.
Mock v.
First,
Casualty
unconstitu-
land
grounds.
Company,
it involves the
La.App., 6 So.2d
assumption
jurisdiction
tional
of
over con-
Burke v.
Bonding
Massachusetts
Company,
troversies between citizens
the same Insurance
209 La.
24 So.2d
Second,
actually
if
requisite is,
875. The
course,
of Louisiana.
other
nature,
equitable
proce-
rights
existence and coverage
in
policy,
closely
dure are so
akin
that the matter not
dispute.
here in
thereto
principles
applied by
same
should be
pertinent
The latest
decision of the Su-
suits,
federal courts
as in
preme
Louisiana,
Court of
West v. Monroe
should be
(a)
held
that the insured is an Bakery,
217 La.
46 So.2d
has
indispensable
(b)
that said that the object of the statute is to con-
tort
these direct actions
LSA-Civil Code
Under the law of
act whatever a man that causes
should decline to exercise
matters
and which threaten the
against
ence of state
in the
Let us first consider the nature in
arises
domestic
exercise of their sound discretion
prejudicial
solely
insurer
governments
reading
from Article 2315 of the spoken of
Louisiana,
alone.
against
rightful independ-
public
federal courts
part: “Every
an action in
carrying
the insurer.
damage
interest
law
to gram, La.App.,
policy right in the where the gives against accident which of action direct injury parish occurred or in the clearly, the insurer is substantive. Just domicile, me, has his part provides it seems to which may against brought brought said action against action against insurer alone both the in- either the insurer alone or both the insurer, jointly sured and the proce and in jointly insured and the insurer ” * ** solido. dural, recognizes for the Act itself that it is just possible By its issued in- to the named proceeds liability policy reach the sured, appellee company obligated itself an action both the insured and the pay “to on behalf the insured all sums in one the insurer alone. which the legally insured shall become ob- ligated bodily holding because of The basis for this Court’s New * * injury Soileau, Casualty supra, The of direct ac- Amsterdam v.Co. might in- that the action be maintained -in the person against surer must be “within the federal court terms limits policy”. A of action the insurer alone was that the cause Act subro- requisite gates rights the insured is first “the to all the to a direct liability Reeves the insured within the terms and limits insurer. Commission, La. Mary- Cushing ana Public Service policy.” See also Co., Cir., So. 198 F.2d Casualty land * ** posi- occupies the subrogee “A seems Louisiana direct action statute *3 substituted, is party for whom he permitted tion of the produce intended in to the results greater but no to the same like, and succeeds by common ex- law states statutes for claim, acquire any se- rights. .cannot ample, statute, He the Alabama Alabama Code did remedy curity, 1940, the creditor 28, judg- which 12, Title where “the Sec. Sec- Am.Jur., Subrogation, not 50 may proceed against have.” ment creditor in equity 753, Under cited. 110, page and cases company the defendant and the insurance has a the the insured money the terms of apply reach to and insurance the an upon company, defend right to the to call judgment.” to the satisfaction of See the ad- him he has been but until Am.Jur., Ap- action Equity, 188; also 19 Sec. 8 par- responsible pay injured the judged Practice, pleman’s Law & et Ins. Sec. 4833 right the to call on ty, seq.; the insured has no Cyc. 6 Blashfield’s & of Auto. Law Instead, damages. there- Practice, insurer to the Sec. legal fore, of a having the effect the statute diversity jurisdiction the That under subrogation injured person in favor the of Ill, Constitution, 2 of Art. does insured, operation rights of the the elaborately developed is in able exist the in giving the statute opinion judge. of Elbert the district v. is more right against the insurer a of action D.C., Casualty Co., Mutual Lumberman’s Supreme accurately by the Court described only F.Supp. 299. I would add a few Clancy, in Ruiz 182La. of Louisiana thoughts. clearly The situation is dis accomplished “by com- So. surety tinguishable from cases the respond the pelling the insurer to —within be sued alone for the default of the obligation policy the of limits of the —to distinguishable principal, is from and also Supreme the insured.” The Louisiana compulsory like cases those' of workmen’s the Court has said that the suit compensation insurance the benefit of delicto-, the is still ex injured employees, where the insurance personal injuries. suit for a company may be In all such sued alone. Co., Indemnity supra. In- Reeves v. Globe obligation a direct cases there is contractual injured party being substituted stead surety from in- plaintiff place party as a plaintiff. the in Here sured, say is more realistic compulsory; surance was not the insured defendant insurer is substituted as voluntarily for it contracted for his own place insured. The overall statutes, protection; under the Louisiana accident, statute, effect of the rights of the insured’s under all per- compensate is to of the suit preserved they insofar are consistent damages paid provid- out of an asset son with direct the insurer. insured. ed An action the insurer involves really two provisions in its establishment causes of ac By virtue of written tion; first, Code, jurisdiction has a limited Louisiana second, insurer’s there equity responsibility in some cases “where there akin inseparable They are not in the positive law for. express law” or “where no is cases, jurisdiction pendent Hurn Ours Art. It does silent”, LSA-Civil Code is ler, “equity” law” the “common not have case, said Le As was “The dis systems established in other states. Orleans, observed is City to be between a case La. tinction Blanc of New 217; grounds support distinct Hyman two v. Hibernia Bank where So. alleged, only single cause of action are one Trust 139 La. & So. question, City presents Shreveport, which Osborn v. 143 La. separate and distinct where two causes A.L.R. case Southern So. alleged, only of is Telephone Telegraph of action are which Louisi- Bell Co. v.
74=7 adjudicate, impossible page ignore federal in U.S. at character.” 289 permissible inquiry page 589. whether interests of at S.Ct. persons of action to not before the would be causes court Louisiana both affected, single controversy so left against the so be established in a open litigation, insurer, jurisdiction to future would be when the but con- invoked, good court court inconsistent a federal recognize dis- science.” separate must two accept action, must
tinct causes of While the Act only which fed- that one in- has a of direct action eral in character. surer, property *4 the insured also has certain rights in the policy, the viz.: judge If the district I are mistaken protected insured has from' exist, the be diversity judisdiction does coverage liability to extent of the an the seems to that the is indis- me insured policy, person the injured whether pensable par- party defendant. “Whether or to some has been or indispensable other who ties are be determined must may injured pol- be during the by the term of according to the federal court icy. rules, question rather than state for the their jurisdiction is which the federal injured If party sues the insured first courts must determine for themselves.” and the insurer has litigation notice of the Adkins, D.C., F.Supp. Ford 39 474. and opportunity proceed- an to control its See also De Korwin v. First National Bank ings, the insurer is by bound determina- Cir., Chicago, 156 3 7 F.2d Moore’s tion liability Apple- 8 insured. Practice, Ed., 19.07,pages Federal 2d Sec. man’s Practice, Ins. Law & Sec. 2152, 2153. cases, cited. Whether the holds reverse true, is, that whether the insured would be principles The Mr. announced Justice bound liability the determination of Barrow, Curtis in Shields v. 17 How. insurer, his is a much more difficult parties as when question. Am.Jur, Insurance, See 29 Sec. indispensable despite are still sound 1084; Annotations, 121 A.L.R. application principles. difficulty in of those C.J.S., A.L.R. Judgments, § 19.07, See Practice, 3 Moore’s Federal If the bound, so obviously then tests, page Among a other indispensable he is an party defendant for presence indispensable party an if his may he lose his counterclaim necessary complete to do to enable court may deprived be of parties justice and final between the before part or all of protection his insurance with- and, further, the court if the interest of the having day his in court. absent is “of such nature that party Even, however, final decree cannot be made without if judgment either would interest, technically affecting leaving not be that the con- binding on the insured troversy as to the liability, in such condition that its final issue of that fact is not may wholly be controlling determining termination inconsistent factor equity good indispensable whether conscience” Shields the insured is an par- Barrow, supra. ty. Keegan This has said court that v. Humble Oil Co., & Refining Cir., “the fact not that decree would be tech- F.2d and authorities there nically binding on the The party, absent is not cited. having, failed in controlling Keegan factor.” direct, might Humble a the insurer still Refining Cir., judgment & F.2d sue the The Oil insured. first In State of California v. Southern suit would conclusively estop Pacific the in- Co, party jured for the issues would be differ- Supreme says: Court might L.Ed. be ent and judgment was “Irrespective, then, extent, proof based on failure of as to the ex- technically speaking, coverage effect istence and matters operation of a decree the seven not involved in the suit the insured. parcels, on ground, based party as res The having recovered insured, George Kennedy, Rayford insured could then call on C. D. Bulloch the. Manchester, Ga., damages' Bulloch, Kennedy
the insurer and the fact and appellant. successfully defended that the insurer has an- would no partj Savannah, Ga., Shelby Myrick, follows swer to the The result insured. pellee. permitted to if sue HOLMES, BORAH, and RUS- court, the in the federal the insurer alone SELL, Circuit complete justice final and court cannot do controversy may and the be left in such a PER CURIAM. final termination condition that its appeal The motion to this is over dismiss wholly good inconsistent with ruled, appealed judgment from is conscience. the dis affirmed the reasons stated Finally, if as to lack I am mistaken both request F.iSupp. judge, 110 trict 751.. my view appeal for assessment of on indispensable that the insured is an is denied. me that then it still seems to *5 court, dis the federal as matter sound jurisdic
cretion, exercise should decline to alone because to do against the insurer public in prejudicial so would regard “proper would not show terest and REVE- INTERNAL COMMISSIONER OF gov rightful independence for the COWDEN, Petitioner, NUE, R. B. domestic carrying Respondent. ernments Pennsylvania policy.” Commonwealth Civ. A. No. 13917. 380, 176, 185, Williams, 55 S.Ct. 294 U.S. Appeals United Court of States 841; 385, v. Sun Oil L.Ed. Burford Fifth Circuit. 1098, 87 L.Ed. S.Ct. U.S. March Dredge & Dock Co. v. Lakes Great Huffman, 63 S.Ct. Slack, Gen., Atty. Acting Ellis Asst. N. ; City of Winter Meredith v. 87 L.Ed. Leming, Counsel, Acting 1407 B. Chief Mason Haven, S.Ct. L. U.S. Bureau of Internal Revenue Charles E. Public Service Commis Ed. Alabama Atty., Lowery, Sp. Bureau Internal Rev- Ry. Co., 341 U.S. sion v. Southern enue, C., Washington, petitioner. D. Weeks, Worth, Harry Tex., Fort C. therefore, respectfully I, dissent. respondent. HUTCHESON, Judge, Chief RUSSELL,
BORAH Circuit PER CURIAM. cause, being con- above-entitled upon Stipulation sidered Remand CONTRACT
GEORGIA CONSOLIDATED Agreement Directions Pursuant Par- Appellant, COMPANY, C. Mc S. ING ties, appearing that the here- Sr., McDaniel, Jr., DANIEL, Co S.C. respective to, through their counsel of rec- partners Construction McDaniel d/b/a agreed compromise ord, have set- Company, Appellees. herein, taken tlement of review No. 14220. questions involved have become States Court United moot, day March, this 31st it is Fifth Circuit. the cause Ordered that be and it is here- Feb. by remanded to Tax Court of the Unit- States with directions to vacate its de- ed February and to enter a cision agreement with the decision in accordance