The opinion of the court was delivered by: John E. Miller, District Judge.
This declaratory judgment action was tried to the Court without
a jury on August 28, 1957. At the conclusion of the trial the
case was taken under advisement by the Court pending the
preparation of a transcript of the evidence by the Court Reporter
and the submission of briefs by the parties. The briefs have been
received, and the Court, having considered the pleadings,
evidence, and briefs of the parties, now makes and files herein
its Findings of Fact and Conclusions of Law, separately stated.
The plaintiff is a Missouri corporation authorized to do, and
doing, business in the State of Arkansas. The defendant, Howard
R. Mullin, is the duly appointed and acting Administrator of the
Estate of William Ross Mullin, deceased, and is a citizen and
resident of Washington County, Arkansas. The defendant, Grant
LeRoy Brindle, a minor, is also a citizen and resident of
Washington County, Arkansas. The amount in controversy, exclusive
of interest and costs, exceeds the sum of $3,000.
In June of 1956 the deceased, William Ross Mullin, purchased a
1949 Plymouth 2-door automobile. At that time he was a minor 17
years of age, and the automobile was purchased in the name of his
father, Howard R. Mullin. Title to the automobile was issued in
the name of Howard R. Mullin, but the automobile was actually
paid for and owned by William Ross Mullin. The automobile was
never driven by Howard R. Mullin.
On June 9, 1956, plaintiff issued its automobile liability
insurance policy, No. 1-540354, to Howard R. Mullin, covering the
1949 Plymouth. It was stated in the policy that the business or
occupation of the named insured was "farmer". The policy was
effective from July 9, 1956, to July 9, 1957, and the coverage
for bodily injury liability was $5,000 each person or $10,000
each accident, and the property damage liability was $10,000 each
accident. In paragraph 7 of the declarations it is stated "The
named insured is the sole owner of the automobile * * *".
Under "Insuring Agreements" the policy, among other things,
"2. Coverage B — Property Damage Liability — MFA
Mutual will pay for the insured all damages which the
insured shall become legally obligated to pay because
of injury to or destruction of property, including
the loss of use thereof, caused by accident and
arising out of the ownership, maintenance, or use,
including the loading and unloading of the owned
automobile, a substitute automobile or a non-owned
"3. Defense and Settlement of Claims and Suits —
With respect to such insurance as is afforded under
Coverages A and B, MFA Mutual will defend any claim
or suit for such damages against the insured, even if
groundless, false, or fraudulent, but MFA Mutual may
settle any claim, or suit as it deems expedient.
"6. Definition of Insured — With
respect to the insurance afforded under Coverages A
and B, the unqualified word `insured' includes the
named insured, and if an individual, his spouse, and:
a. With respect to the owned automobile or a
substitute automobile, any person or organization
using it or legally responsible for its use, provided
the actual use of the automobile is by the named
insured or spouse, or with permission of
either; * * *
"9. Financial Responsibility Law — Coverages A
and B shall comply with the provisions of any
applicable motor vehicle financial responsibility law
to the extent of the coverage and limits of liability
required by such law, but not in excess of the policy
limits of liability, when this policy is certified as
proof of financial responsibility for the future
under the provisions of any such law. * * *"
Under "Conditions" the policy provides:
"1. Effect of Policy Acceptance: By acceptance of
this policy, the named insured agrees that the
statements in the Declarations are his agreements and
representations, and that this policy embodies all
agreements, relating to this insurance, existing
between himself and MFA Mutual or any of its agents.
"2. Insured's Duty When Loss Occurs — Notices to
MFA Mutual — In the event of accident, occurrence or
loss, written notice, containing all particulars
shall be given by or for the insured to MFA Mutual as
soon as practicable, * * *.
"If claim is made or suit is brought against the
insured, he shall immediately forward to MFA Mutual
every demand, notice or summons received by him or
his representative. * * *
"4. Assistance and Cooperation of the Insured: With
respect to Coverages A, B, E, F, G and H, the the
insured shall cooperate with MFA Mutual, disclosing
all pertinent facts known or available to him, and
upon MFA Mutual's request, shall attend hearings and
trials and shall assist in effecting settlements,
securing and giving evidence, obtaining the
attendance of witnesses and in the conduct of
suits. * *
"6. Action Against MFA Mutual. No action shall lie
against MFA Mutual, under any Coverage, until after
full compliance with all the terms of this
policy, * * *.
William Ross Mullin used the car until November 1956, when he
went into the Army. At that time he left the car at the home of
his father, Howard R. Mullin, near Lincoln, Arkansas. William
Ross Mullin was stationed in Virginia, and apparently he received
a Christmas leave because he returned to his father's home on
December 24, 1956. During the time he was gone the car was parked
under a tree at his father's home, and was not used by anyone.
It appears that William Ross Mullin was attempting to sell the
automobile to Grant LeRoy Brindle, and that William Ross Mullin
had authority of his father, Howard R. Mullin, to do so.
On the afternoon of December 28, 1956, William Ross Mullin left
his father's home in the automobile, taking with him his sister.
It is not clear from the evidence whether Grant LeRoy Brindle was
at the Mullin home and left with William Ross Mullin and his
sister, or whether he joined them later. In any event, neither
Howard R. Mullin nor his wife gave Grant LeRoy Brindle express
permission to drive the automobile.
All the evidence with regard to how William Ross Mullin met his
death is hearsay evidence. It does appear from the record,
however, that at some later time in the evening of December 28
William Ross Mullin's sister was returned to her home, and that
on the early morning of December 29, 1956, the automobile in
question was involved in an accident on Highway 51 in Washington
County, Arkansas, near the town of Cincinnati, Arkansas. It also
appears from the record that the automobile was being driven by
Grant LeRoy Brindle, and that an automobile driven by A.M.
Prescott was also involved in the mishap. William Ross Mullin
died as a result of the injuries he sustained in the accident.
Howard R. Mullin learned of the death of his son on the morning
of December 29, and on that day or the next day contacted E.J.
Ball, an attorney associated in the practice of law with Rex W.
Perkins in Fayetteville, Arkansas. Ball began an investigation of
the accident, and among other things took a statement from Grant
LeRoy Brindle on the evening of December 30, 1956.
On December 31, 1956, Ball wrote the plaintiff's claims
department as follows:
"Please be advised that the 1949 Plymouth
Automobile covered by the captioned Insurance Policy
was involved in an automobile collision on the night
of December 28, 1956 near Cincinnati, Arkansas. A.M.
Prescott was the driver of the other automobile and
he has been charged with manslaughter.
"This office represents Mr. Howard R. Mullin and
the estate of the decedent."
No other notice of the accident was given to plaintiff by
Howard R. Mullin or Grant LeRoy Brindle.
On January 15, 1957, Robert E. Pettit, plaintiff's Claims
Manager, wrote Ball acknowledging receipt of his letter of
December 31, 1956, and stating "Our representative, Marvin
Christopher, at Springdale, Arkansas, will contact you in the
near future in regard to this matter".
Howard R. Mullin, through his attorneys, Perkins and Ball,
asserted a claim against Prescott, the driver of the other
automobile involved in the accident, and against Prescott's
insurance carrier, Southern Farm Bureau Casualty Insurance
Company. Negotiations were conducted relating to this claim, and
on January 30, 1957, Prescott's insurance carrier, through its
attorney, Charles R. Garner, offered to settle the claim of
Mullin against Prescott for $3,000, provided Howard R. Mullin's
attorneys would obtain a release from Grant LeRoy Brindle in
favor of Prescott for the sum
of $50. Prescott's insurance carrier wanted to dispose of the
whole matter at one time, and would not settle with Mullin unless
it could also get a release from Brindle. Howard R. Mullin,
acting through his attorneys, agreed to accept this offer of
On February 20, 1957, the Probate Court of Washington County,
Arkansas, entered an order authorizing settlement of the claim of
Howard R. Mullin, Administrator, against A.M. Prescott. Among
other things the order authorizing the settlement states: "That
A.M. Prescott caused the wrongful death of the said William Ross
On February 21, 1957, Howard R. Mullin, Administrator, executed
a release in favor of Prescott for the consideration of $3,000.
The release was drawn in accordance with Act 315 of the Acts of
Arkansas for 1941 in order to preserve the right of Howard R.
Mullin to assert a claim against Grant LeRoy Brindle.
At 3:02 p.m. on February 21, 1957, Howard R. Mullin,
Administrator of the Estate of William Ross Mullin, deceased,
filed an action against Grant LeRoy Brindle, a minor, in the
Circuit Court of Washington County, Arkansas.
It is alleged in the complaint, inter alia:
"That on December 29th, 1956, the deceased was a
guest in a vehicle driven by Grant LeRoy Brindle, a
minor, and that approximately one mile North of
Cincinnati, Arkansas, on Highway 51, in Washington
County, Arkansas, the defendant so carelessly,
negligently and unlawfully at the time operated the
car he was driving as to cause the injuries, damages
and death to the deceased, and that said deceased was
injured without fault on his part."
Howard R. Mullin prayed for judgment in the sum of $15,000
against the said defendant, Grant LeRoy Brindle. On the same day,
February 21, 1957, summons was served on Grant LeRoy Brindle in
the law offices of Perkins and Ball, attorneys for Howard R.
Mullin. On March 22, 1957, Grant LeRoy Brindle and his parents
issued a release to A.M. Prescott for a consideration of $50. The
release refers to the accident which occurred on December 29,
1956, and among other things provides:
"Therefore, for the sole consideration of Fifty and
no/100 Dollars ($50.00) in hand paid to First Parties
(Grant LeRoy Brindle and his parents) by the Second
Party (A.M. Prescott), receipt of which is
acknowledged, First Parties do hereby release, acquit
and forever discharge the said Second Party, his, its
or their agents and employees and all other persons,
firms or corporations who are or might be liable for
such injuries from any and all actions, causes of
actions, claims, and demands, damages, costs, loss of
services, expenses and compensation on account of or
in any way growing out of any and all known and
unknown personal injuries and property damage
resulting or to result to said minor from said
accident including any other claims that First
Parties or any of them may have which arose at the
time or prior to such accident and to this end they
do bind themselves, their heirs, executors,
administrators, successors and assigns forever."
A draft dated April 4, 1957, in the sum of $50 was issued by
Prescott's insurance carrier, Southern Farm Bureau Casualty
Insurance Company, to Grant LeRoy Brindle and his parents. The
draft referred to the accident, and on the face of the draft
there appeared the following: "In full payment for any and all
claims on the loss referred to above". This draft was cashed by
Grant LeRoy Brindle, and he received the sum of $50.
At the time the suit was filed by Mullin against Brindle in the
Washington County Circuit Court on February 21, 1957, no notice
was given by Howard R. Mullin or by Grant LeRoy Brindle to
plaintiff of the filing of the suit, and the summons served on
Grant LeRoy Brindle was not forwarded to the plaintiff. Plaintiff
did not learn of the suit until April 10, 1957, and at that time
the notice was received by accident. One of plaintiff's adjusters
happened to be checking some court records relating to the claim
of Howard R. Mullin, Administrator, against Prescott, and learned
of the suit of Howard R. Mullin, Administrator, against Grant
LeRoy Brindle. Upon learning of this suit the adjuster notified
his home office, and the home office in turn contacted
plaintiff's attorney, Courtney Crouch.
In the meantime, no guardian ad litem had been appointed for
Grant LeRoy Brindle in the case pending against him in the
Washington County Circuit Court, and none had been appointed at
the time of the trial August 28, 1957, of the instant case.
Some discussion of the matter was had between plaintiff's
attorney, Crouch, and Mullin's attorney, Perkins, and on April
29, 1957, plaintiff filed the instant suit for a declaratory
judgment asking the Court to construe the provisions of the
policy issued by plaintiff to Howard R. Mullin and to determine
the respective rights and liabilities of the parties.
At the time of the accident Grant LeRoy Brindle was 17 years of
age. He had attended school and could read and write, but the
evidence did not disclose the extent of his education.
As heretofore stated, the day after the accident, December 30,
1956, he gave a statement to Howard R. Mullin's attorney
concerning the accident. On January 1, 1957, he gave a statement
to an adjuster representing the insurance carrier of Prescott. On
January 2, he gave a statement to the Deputy Prosecuting Attorney
of Washington County, Arkansas.
Later, at the request of Mullin's attorneys, and in accordance
with the requirement of Prescott's insurance carrier, Brindle
executed a release to Prescott in order to facilitate the
settlement of the claim of Howard R. Mullin against Prescott.
Grant LeRoy Brindle gave plaintiff no notice of the accident or
of the suit filed against him by Howard R. Mullin. Brindle did
not confer with plaintiff or its representative at any time, but
it appears that they made no extensive effort to contact him.
Grant LeRoy Brindle left the State of Arkansas on June 2, 1957,
and was not available for service of subpoena at the time of ...