Casualty Reciprocal Exchange v. Sutfin , 196 Okla. 567 ( 1945 )

By 47 O. S. 1941 § 162, the duty to enforce and administer the Motor Carrier Act (47 O. S. 1941 §§ 161-174) is imposed upon the Corporation Commission, and it is given authority "to prescribe rules and regulations applicable to any and all motor carriers."

47 O. S. 1941 § 169 provides that, before issuing any carrier a certificate of convenience and necessity, the commission shall require the carrier to file with it an "insurance policy or bond covering public liability and property damage" binding the obligor to make compensation for "injuries to, or death of, persons" resulting from the operation of the carrier.

The act does not prescribe the form of the policy, but it expressly requires the commission to fix the amount thereof. The duty of the commission to prescribe the form of the policy consistent with the requirements of section 169, and its duty to construe the ambiguous provisions of the act in administering it, are clearly implied. Prior to 1938 the commission prescribed Form E as a rider to the policy. Form E did not expressly include or exclude employees of the carrier under the coverage of the policy. In Continental Casualty Co. v. Shankel, 88 F.2d 819, decided March 8, 1937, the Circuit Court of Appeals for the Tenth Circuit held that Form E covered employees of the carrier. The commission was evidently of the opinion that this was not a correct interpretation of Form E, for on May 5, 1938, it made an order amending Form E so as to expressly exclude employees from coverage. In July, 1941, Hazelrigg as a Class B carrier filed with the commission a liability insurance policy, signed by the defendant Casualty Reciprocal Exchange as insurer. Amended Form E was attached to the policy as a rider.

The plaintiff joined Casualty Reciprocal Exchange as a party defendant on the theory that the statute requiring the policy is, by operation of law, written into the policy, and that, under the statute, employees are "persons" covered by the statute, and that the commission was without authority to prescribe a form excluding the employees from coverage. The defendants properly raised the question of the misjoinder of the Casualty Reciprocal Exchange as a party defendant, and urge the question here.

The defendants lay stress on the provision that the policy shall cover "public liability", while the plaintiff lays stress on the provision that it is to protect "persons" and urges that the term "persons", which is not defined in the act, includes employees of the carrier.

By prescribing Amended Form E the commission construed section 169 to require only a "public liability" policy, and that the "persons" covered included only members of the public and did not include employees of the carrier. The commission thus sought to reconcile these provisions that in a measure seem to be in conflict, and sought to give some effect to all the provisions and carry out the intention of the Legislature, as was its duty. Colbert Mill Feed Co. v. Oklahoma Tax Commission, 188 Okla. 366,109 P.2d 504. Two sessions of the Legislature intervened between the time Amended Form E was promulgated and the issuing of the policy sued on, and the Legislature did not amend the statute under consideration. The Legislature is presumed to be familiar with the construction placed upon statutes by executive officers, charged with the duty of enforcing them, and by failing to thereafter legislate on the subject it will be presumed to have acquiesced in such construction. McCain v. State Election Board, 144 Okla. 85, 289 P. 759; United States v. Shreveport Grain Elevator Co., 287 U.S. 77, 77 L.Ed. 175, 53 S.Ct. 42; 59 C.J. 1030, note 67; 50 Am. Jur. 318; Southerland, Statutory Construction (3d Ed.) § 5109. On the strength of the construction placed upon the statute by the commission in prescribing Amended Form E the policy sued on was made, limiting the coverage to the public and expressly excluding employees.

We are committed to the rule that the administrative construction of a statute by executive officers whose duty it is to administer it, while not conclusive, is entitled to great weight by the courts when they are called upon to judicially construe it, and this is especially so where contracts have been made or rights have been acquired on the strength of such construction. Crosbie v. Partridge, 85 Okla. 186, 205 P. 758; McCain v. State Election Board, above. And this is the general rule. 59 C. J. 1025; 25 R. C. L. 1943; 50 Am. Jur. 309; Sutherland, Statutory Construction (3d Ed.) § 5105. This rule is controlling here, if, as I believe, section 169 is ambiguous and does not clearly require that the policy cover employees of the carrier. The policy clearly must cover "public liability", but it is not clear that employees are persons so protected. In fact, in Utilities Ins. Co. v. Potter, 188 Okla. 145,105 P.2d 259, we said that the statute was intended to protect the public.

The decision of the Circuit Court of Appeals in Continental Casualty Co. v. Shankel, above, is not contrary to these views. That case involved a construction of a policy with Form E attached. The policy was ambiguous, and the court properly resolved the ambiguity against the insurer under the familiar rule that insurance contracts are to be construed most strongly against the insurer. 29 Am. Jur. 180-187; 32 C. J. 1152-1157. While the court there used some language referring to the meaning of the statute, it was in fact construing the bond, for the court said: "We conclude, therefore, that Shankel was within the insurance coverage of Form E."

Thus, the controlling principle involved in the Shankel Case was different from the one with which we are concerned. There, the construction of the policy was involved, while here the construction of the statute is involved. There, doubt as to the meaning of the policy was to be resolved against the insurer. Here, doubt as to the meaning of the statute is to be resolved in favor of the construction placed upon it by the Corporation Commission, and on the strength of which the policy was made.

I conclude that the Casualty Reciprocal Exchange is not liable to the plaintiff on the policy, and it was error to refuse to dismiss the cause as to it, and Hazelrigg was prejudicially affected by keeping it in the case as a defendant. See Berry v. Park, 185 Okla. 118, 90 P.2d 425; 56 A. L. R. 1418, annotation.

By the majority opinion the insurer is required to assume a liability which it not only did not agree to assume, but which it expressly contracted against, and for which it presumably was not paid. Hazelrigg is undoubtedly liable for the damages sustained by the plaintiff for the death of Sutfin if his death was proximately caused by Hazelrigg's negligence.

For the foregoing reasons, I respectfully dissent.

The Chief Justice and Mr. Justice OSBORN concur in this opinion.