Case Information

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THEAITORNEY GENERAL OPTEXAS Aus~liu 11. TJCXASI

Hon. Il. L. Mllliken Opinion No. O-179 Re: Construction I~nsurance Expert of Form 77 - Motor Motor Transport Division Truck Public Liability Insurance En- Railroad Commission of dorsement relating .to coverage of

Texas trucks not described in policy Austin, Texas

Dear Mr. Mllliken:

We are pleased herewith to comply with your request un- der date of January 18 for a construction of Form 7’+“Motor Truck Endorsement-Texas Railroad Commission-Restricted Form” relating to the liability of the insurer under a public liability insurance policy contalnlng said endorsement for trucks operated by the in- sured not specifically described in said policy.

It is our opinion that all trucks operated by the insur- ed (whether specifically described in the policy or not, and pro- visions in the policy proper to the aontrary notwithstanding) would be covered by a public liability policy containing Form 77 endorsement so as to make .the insurer liable to third person for Injury to person or property occasioned by the operation of said trucks while used in carrying property for hire in Texas. We be- lieve this result is accomplished by the following paragraph of Form 77:

“Coverage granted by the policy applies to all trucks and trailers tion of the named insured, whether particularly belonging to or under the dlrec-

iden- tified in the policy or not, while same are being used in the business of carrying property for hire or compensation and coming within the terms of the statutes, subject abov~e referred to, and it is agreed that,.

to the policy limits, this policy covers the imposed by law upon the named insured for

injury to or death of persons, other than the named insured or his employees, and loss or damage to prop- erty, other than the property of the named insured, or of his ‘employees, through such operation of such trucks and trailers within the boundaries of the State of Texas, even though, such trucks or trailers may not be specifically identified herein anything to the contrary in the policy or endorsements thereto notwithstanding.”

Hon. R. L. Milliken, page 2 (O-179)

Form 77, when attached to and executed by the Lnsured becomes a part of the contract between the insurer and the as- sured as fully as though written into the policy proper, and superpedee any provisions in the policy proper which conflict therewith by virtue of the following provision of the. endorsement:

(‘Any provision, eltherh the body of the policy to which this endorsement is attached or in any other endorsement thereon or attached thereto, now or here- after, In conflict with or contrary to the provisions of this endorsement, shall be deemed to be cancelled hereby.” in the first paragraph of Form 77, the pur ose As stated the purposes of Chapter 31 f: ,

of the endorsement is to. effectuate General and Special Laws of the 4lst Legislature of Texas, 1929, and amendments thereto5 being designated as Article 911b Revised Statutes, and more particularly

Section 13 thereof. It may be noted that Form also provides that the in- surer shall be entitled to reimbursement from the insured for “any loss -involving any automobile or trailer not described in the pol- icy or endorsements thereto which has’ been in operation for a period of more than ten (10) days without an endorsement having been requested therefor”, but this provision does not limit or di- minish the Insurer’s to the injured third party. of the very paragraph of Form 77, first

The construction above quoted was under consideration in the case of Park et ux. v. American s ldelity & Casualty Co. Inc., 92 Fed.(2d) 746, decided by the Federal Circuit Court of Appeals for the 5th Circuit in 1937. In this case the insurer sought to avoid liability under the policy which contained the provision that It did “not cover any loss arising or resulting from an accident occurring while any of said automobiles were -.-being driven or operated by any person other than the assured or his paid employee.” The plaintiff re- (Form 771, which was attached to the pol- lied upon the endorsement icy, and the court held that it prevailed over the conflicting pro- visions above quoted in the policy proper. Judge Sibley In a concurring opinion said:

“The rider expressly extends coverage to all trucks operated ‘under the direction and control’ of the as- sured. In the suit against the assured, which was DDE- fended by the insurer, the jury in a special verdict ex- pressly found the truck was operated under the d#rection and control of the assured. On general principles of estoppel by judgment the insurer cannot again contest that issue with the plaintiffs.”

Hon. R. L. Milliken, page 3 (O-179) in the con-

We believe this decision is controlling of Form which we have given herein. struction

Yours very truly OF TEXAS ATTORNEY GENERAL By /s/ Walter R. Koch Walter R. Koch, Assistant APPROVED:

ATTOBNEY GENERAL OF TEXAS

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