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Keywords

contractlawsuitplaintiffjurisdictionattorneyliabilityappealtrialcorporationjury instructions

contractjurisdictionliabilitytrialpleacorporation

Related Cases

United States Shipping Board Emergency Fleet Corporation v. Sherman & Ellis, 208 Ala. 83, 93 So. 834

Facts

Sherman & Ellis, Inc. filed a lawsuit against the Mobile Shipbuilding Company and the United States Shipping Board Emergency Fleet Corporation to recover premiums due under a liability insurance policy related to the Workmen's Compensation Act of Alabama. The policy was issued to cover a period from January 1, 1920, to January 1, 1921, and included both companies as assured parties. The Fleet Corporation claimed that the suit was effectively against the United States and challenged the court's jurisdiction, while the plaintiff argued that it was the real party in interest entitled to recover the premiums.

In the policy it is stated, where the word “exchange” occurs it should be construed to mean the subscribers collectively, but that no liability shall be imposed upon the subscribers other than severally, and that in no event shall a subscriber be made liable with the others.

Issue

The main legal issues were whether the Fleet Corporation was entitled to jurisdictional immunity as a federal entity and whether Sherman & Ellis, Inc. was the real party in interest entitled to recover the premiums.

The Fleet Corporation filed a special plea to the jurisdiction of the court, setting up in substance that it was a corporation organized under the laws of Congress enacted for the District of Columbia, and was incorporated in pursuance of the Shipping Act of September 7, 1916 (U. S. Comp. St. §§ 8146a–8146r); that all of its capital stock has been paid, and is now owned and held by the United States of America.

Rule

The court applied principles regarding jurisdiction over federal entities and the determination of the real party in interest in insurance contracts.

This question has recently been considered and determined by the Supreme Court of the United States in the cases of Sloan Shipyards Corporation et al. v. United States Shipping Board Emergency Fleet Corporation and the United States (No. 308), Astoria Marine Iron Wks. v. U. S. Shipping Board Emergency Fleet Corporation (No. 376).

Analysis

The court examined the Fleet Corporation's claim of jurisdictional immunity and found that previous Supreme Court decisions did not support its contention. It also considered the nature of the insurance policy and the role of Sherman & Ellis, Inc. as the attorney in fact for the subscribers, concluding that the plaintiff had the right to bring the action for the recovery of premiums.

We make no effort here to enter into any detailed statement or discussion of the evidence presented upon these issues of fact. Suffice it to say we are persuaded, after a careful examination of the record, that the proof was sufficient for submission to the jury to determine whether or not the Mobile Company was in fact but the agent of the Fleet Corporation with full power and authority to bind the Fleet Corporation for the payment of premiums on the contract here involved.

Conclusion

The appellate court reversed the trial court's judgment and remanded the case, determining that the trial court had erred in its jury instructions regarding the recovery of premiums.

We are of the opinion, therefore, that the trial court committed error in so instructing the jury. For which the judgment must be reversed and the cause remanded.

Who won?

The United States Shipping Board Emergency Fleet Corporation prevailed on appeal because the appellate court found that the trial court had made an error in instructing the jury about the recovery of premiums.

The appellate court found that the trial court erred in its instructions to the jury regarding the recovery of premiums.

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