HUTCHESON, Chief Judge.
Brought against Opal Tingle, the named insured in an automobile policy, No. VF 1, 001, 176, plaintiff had issued, and Horace Tingle, the driver of the car, and against Mrs. Loudermilk and Mrs. Brooks, who had sued the Tingles for collision damages, the suit was for a declaration of its rights and obligations with respect to the policy. The claim in general
was that the col
lision had occurred at 6:30 P.M., July 16, 1950; that prior to that date plaintiff as insurer, 'had issued to Miss Tingle, and she had accepted, an automobile liability insurance policy insuring her against damages for liability imposed on her by law for collision damages; that that policy had expired at 12:01 A.M., on July 16, 1950, and mo liability was being, or could be, asserted thereunder;- that, however, some sixty days before its expiration, plaintiff had issued and sent to its agent for delivery to, and acceptance by, the assured, policy No. VF 1, 001, 176, in renewal thereof, effective 12:01 A.M., on July 16, 1950; that the policy, though delivered to, was not accepted by, the insured, but, on the contrary, was rejected and refused; and that plaintiff was, therefore, under no obligation to its assured to defend the suits, nor was it liable either to its assured or to those who had .sued her.
In their answer, the Tingles admitted that the matters as pleaded by plaintiff in -paragraph 9 transpired as alleged by it, and ■agreed with plaintiff that the policy, VF 1, •001, 176, was not accepted and did not become effective. In addition, they alleged in effect: that neither of them was at fault in connection with the collision; that the sole liability for the accident rests upon the driver of the Loudermilk car; and that it was because they were not at fault and did not believe themselves to be in need of the protection afforded thereby that they declined to accept the policy when it was delivered to them.
The defendants Loudermilk and Brooks, in their answer insisted that the court was without jurisdiction of the controversy presented by plaintiff’s petition, and moved to dismiss it on the ground that since the insurance company had already committed itself by agreement with plaintiff to defend the suit in the Superior Court, and the question of ultimate liability on the policy would not arise unless Loudermilk et al. obtained judgment against the Tingles, no real controversy was presented, and no case for a declaratory judgment was made out.
As a second defense they alleged: that the plaintiff had recognized its liability, as insurer of Miss Opal Tingle- as the owner of the car and Horace Tingle as the driver thereof, by taking, with their knowledge and consent, full and complete control of the defense of the suits brought against them by the defendants; that the liability
contract is in fact in full force and effect; and that if it is not, plaintiff is estopped by its conduct from claiming the contrary.
For a third defense they pleaded in effect : that by its acts and conduct, and that of its agent, plaintiff had defrauded the Tingles by preventing them from securing independent representation and advice; further that, while professing to be looking after the interests of the Tingles, but knowing that they were ignorant of their responsibilities and their rights, it had persuaded and induced them to agree to, and to, act contrary to their own interests in order to protect the insurance company; and that this conduct was in law a fraud upon the plaintiffs and upon the defendants. Finally, defendants demanded a trial by jury.-
The district judge denying the motion to dismiss for failure of the complaint to state a case for declaratory judgment, the cause was set for trial on the merits
and mistakenly called for trial and tried before the court without a jury.
Upon findings of fact,
that the policy had never been accepted by the named assured and had, therefore, never become of
force, the court gave judgment for plaintiff. Thereafter, the defendants moving for a new trial on the ground that the findings of fact are contrary to the evidence, and on the ground that they had been deprived of a jury trial, the district judge, concluding that the evidence demanded a finding for plaintiff and that the failure to afford a jury trial was harmless error, at first denied defendant’s motion. Later, however, he granted it, saying:
“The Court is still of the opinion that the testimony adduced upon the trial of the case demands a verdict in favor of the plaintiff, and that another trial of the case upon the same evidence before a jury would be a useless procedure.
“However, the question as to whether there is available other evidence, in addition to that already adduced, sufficient to create an issue of fact to be passed upon by a jury is a question which, by pre-trial and other rules, may be determined prior to another trial of this case.”
Matters standing thus, plaintiff moved, under Rule 56, for a summary judgment based on the pleadings, and the transcript of the record made on the trial before the district judge, and the court determined; that there existed no genuine issue as to any material fact; and that plaintiff was entitled as matter of law to a summary judgment, that it was not liable on the pol-' icy; and gave judgment accordingly.
Appealing from the judgment, the defendants Loudermilk, et al., are here, insisting: that the case was not one that could possibly be decided on summary judgment in favor of the plaintiff; and, in the alternative, that if it ought not to have been decided as matter of law for the defendants, there were certainly fact issues which required submission to the jury. Of these fact issues one was: whether the policy had been in fact accepted either by the Tingles’ agent Childs, who, though the agent for the company, was also, as Miss Tingle swore, her agent, or by the Tingles themselves, and their action, after receiving and holding the policy for two or three days, was not rather an effort to cancel than a refusal to accept.
In addition, assuming that there was no formal acceptance, there was the issue whether the failure to accept had been due to fraud between the Tingles and the insurance company to defeat the defendants, or to fraud practiced by the insurance company alone, upon both the Tingles and the defendants.
We find ourselves in full agreement with appellants that the case was not one which could be decided on summary judgment for plaintiff. It should either have ’been decided as matter of law for defendants on the ground that it appeared without dispute that the policy was accepted and then returned for cancellation, or it should have been submitted to a jury for the determination by the jury, as a matter of fact, whether this was so, and, if it was not accepted, for the determination of the other issues arising out of the charges of fraud, prac
ticed upon the defendants by the Tingles and the insurance company, or practiced by the insurance company alone on both the Tingles and the defendants.
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HUTCHESON, Chief Judge.
Brought against Opal Tingle, the named insured in an automobile policy, No. VF 1, 001, 176, plaintiff had issued, and Horace Tingle, the driver of the car, and against Mrs. Loudermilk and Mrs. Brooks, who had sued the Tingles for collision damages, the suit was for a declaration of its rights and obligations with respect to the policy. The claim in general
was that the col
lision had occurred at 6:30 P.M., July 16, 1950; that prior to that date plaintiff as insurer, 'had issued to Miss Tingle, and she had accepted, an automobile liability insurance policy insuring her against damages for liability imposed on her by law for collision damages; that that policy had expired at 12:01 A.M., on July 16, 1950, and mo liability was being, or could be, asserted thereunder;- that, however, some sixty days before its expiration, plaintiff had issued and sent to its agent for delivery to, and acceptance by, the assured, policy No. VF 1, 001, 176, in renewal thereof, effective 12:01 A.M., on July 16, 1950; that the policy, though delivered to, was not accepted by, the insured, but, on the contrary, was rejected and refused; and that plaintiff was, therefore, under no obligation to its assured to defend the suits, nor was it liable either to its assured or to those who had .sued her.
In their answer, the Tingles admitted that the matters as pleaded by plaintiff in -paragraph 9 transpired as alleged by it, and ■agreed with plaintiff that the policy, VF 1, •001, 176, was not accepted and did not become effective. In addition, they alleged in effect: that neither of them was at fault in connection with the collision; that the sole liability for the accident rests upon the driver of the Loudermilk car; and that it was because they were not at fault and did not believe themselves to be in need of the protection afforded thereby that they declined to accept the policy when it was delivered to them.
The defendants Loudermilk and Brooks, in their answer insisted that the court was without jurisdiction of the controversy presented by plaintiff’s petition, and moved to dismiss it on the ground that since the insurance company had already committed itself by agreement with plaintiff to defend the suit in the Superior Court, and the question of ultimate liability on the policy would not arise unless Loudermilk et al. obtained judgment against the Tingles, no real controversy was presented, and no case for a declaratory judgment was made out.
As a second defense they alleged: that the plaintiff had recognized its liability, as insurer of Miss Opal Tingle- as the owner of the car and Horace Tingle as the driver thereof, by taking, with their knowledge and consent, full and complete control of the defense of the suits brought against them by the defendants; that the liability
contract is in fact in full force and effect; and that if it is not, plaintiff is estopped by its conduct from claiming the contrary.
For a third defense they pleaded in effect : that by its acts and conduct, and that of its agent, plaintiff had defrauded the Tingles by preventing them from securing independent representation and advice; further that, while professing to be looking after the interests of the Tingles, but knowing that they were ignorant of their responsibilities and their rights, it had persuaded and induced them to agree to, and to, act contrary to their own interests in order to protect the insurance company; and that this conduct was in law a fraud upon the plaintiffs and upon the defendants. Finally, defendants demanded a trial by jury.-
The district judge denying the motion to dismiss for failure of the complaint to state a case for declaratory judgment, the cause was set for trial on the merits
and mistakenly called for trial and tried before the court without a jury.
Upon findings of fact,
that the policy had never been accepted by the named assured and had, therefore, never become of
force, the court gave judgment for plaintiff. Thereafter, the defendants moving for a new trial on the ground that the findings of fact are contrary to the evidence, and on the ground that they had been deprived of a jury trial, the district judge, concluding that the evidence demanded a finding for plaintiff and that the failure to afford a jury trial was harmless error, at first denied defendant’s motion. Later, however, he granted it, saying:
“The Court is still of the opinion that the testimony adduced upon the trial of the case demands a verdict in favor of the plaintiff, and that another trial of the case upon the same evidence before a jury would be a useless procedure.
“However, the question as to whether there is available other evidence, in addition to that already adduced, sufficient to create an issue of fact to be passed upon by a jury is a question which, by pre-trial and other rules, may be determined prior to another trial of this case.”
Matters standing thus, plaintiff moved, under Rule 56, for a summary judgment based on the pleadings, and the transcript of the record made on the trial before the district judge, and the court determined; that there existed no genuine issue as to any material fact; and that plaintiff was entitled as matter of law to a summary judgment, that it was not liable on the pol-' icy; and gave judgment accordingly.
Appealing from the judgment, the defendants Loudermilk, et al., are here, insisting: that the case was not one that could possibly be decided on summary judgment in favor of the plaintiff; and, in the alternative, that if it ought not to have been decided as matter of law for the defendants, there were certainly fact issues which required submission to the jury. Of these fact issues one was: whether the policy had been in fact accepted either by the Tingles’ agent Childs, who, though the agent for the company, was also, as Miss Tingle swore, her agent, or by the Tingles themselves, and their action, after receiving and holding the policy for two or three days, was not rather an effort to cancel than a refusal to accept.
In addition, assuming that there was no formal acceptance, there was the issue whether the failure to accept had been due to fraud between the Tingles and the insurance company to defeat the defendants, or to fraud practiced by the insurance company alone, upon both the Tingles and the defendants.
We find ourselves in full agreement with appellants that the case was not one which could be decided on summary judgment for plaintiff. It should either have ’been decided as matter of law for defendants on the ground that it appeared without dispute that the policy was accepted and then returned for cancellation, or it should have been submitted to a jury for the determination by the jury, as a matter of fact, whether this was so, and, if it was not accepted, for the determination of the other issues arising out of the charges of fraud, prac
ticed upon the defendants by the Tingles and the insurance company, or practiced by the insurance company alone on both the Tingles and the defendants.
In addition to providing insurance for the Tingles against their legal liability, the policy contained a condition, No. 6, providing in substance that “any person * * * who has secured judgment against the insured * * * shall thereafter be entitled to recover under this policy to the extent of the insurance afforded by this policy, and that bankruptcy or insolvency of the insured or the insured’s estate shall not relieve the company of any of its obligations under this policy”.
Thus the policy, if accepted, conferred rights not only upon the Tingles but upon the plaintiffs
in the damage suits, rights which became vested from and after the occurrence of the accident. This is especially so here since it plainly appears that the Tingles fully complied with all the terms of the policy by immediately notifying the plaintiff insurance company of the accident and that plaintiff then and there, notwithstanding it had obtained from Miss Tingle the affidavit referred to above, entered into a non-waiver agreement to accord them full defense in the suits.
Under the circumstances of this case, showing almost if not quite, as a matter of law that there was an acceptance, followed by an effort to cancel, rather than a failure to accept, it certainly cannot be said that a jury would be bound to accept the statements of the Tingles and of Childs as establishing as matter of law that there was no acceptance. Quite to the contrary, the. jury, under appropriate instructions, would have the right, in the light of the conditions surrounding their actions, to reject their statements of fact, and especially their conclusions as to the effect of what they did, if it believed that the statements were not truthfully made but were made with intent to deceive and defraud the defendants Loudermilk et al., or, if truthfully made, were made under and as the result of fraud and deception practiced by the plaintiff.
This is not to say that if the jury believes that, without any fraud or deception being practiced upon them by plaintiff, and honestly and with full knowledge of their rights and the effect of- what they did, for the purpose of protecting their own interests and not falsely and acting in collusion with plaintiff to defraud Loudermilk et al., the Tingles did decline to accept and pay for the policy, that defendants, the Louder-milks et al., could nevertheless recover on the policy.
It is to say, though, that in determining the question of acceptance
vel non,
the jury can and must first determine, whether the rejection by the Tingles was really a failure to accept or was a rejection by way of cancellation after the policy had become a claim, either by its acceptance by Childs as their agent or by its acceptance by them. Next, if they find that it was in reality a failure to accept, then they must determine in the light of all the circumstances, including the agreement of the company to defend them made after Miss Tingle had signed the requested affidavit, whether the refusal to accept was fraudulent because in collusion with the plaintiff insurance company to defeat the claims of defendant Loudermilk et al. In short, this is a case, the peculiar circumstances of which admitted of, if they did not require, a jury verdict, holding precisely to the contrary of that which was found below as matter of law. This is not the kind of case that can'be settled on summary judgment. It is peculiarly the kind of case where the triers of fact whose business it is not only to hear what men say but to search for and find the roots from which the sayings spring, should
be afforded full opportunity to determine the truth and integrity of the ’case. Cf. Gray Tool Co. v. Humble Oil & Refining Co., 5 Cir., 186 F.2d 365, at page 367; Colby v. Klune, 2 Cir., 178 F.2d 872, 873.
The judgment is reversed and the cause is remanded for a full trial on the issues, tendered, including a determination of the single claim of fact tendered in the plaintiff’s petition; whether or not in fact there was an acceptance of the policy, or whether, if there was no acceptance, this was brought about by collusion with the insurance company in an attempt to defraud the plaintiffs in the damage suit, or, if not in collusion with the plaintiff, as a result of the Tingles being overreached by the insurance company and its agents.
Reversed and remanded.