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                  THEAITORNEY                     GENERAL
                                OPTEXAS
                                Aus~liu    11. TJCXASI
Gerald C. Mann




      Hon. Il. L. Mllliken                Opinion No. O-179
      I~nsurance Expert                   Re: Construction    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       belonging to or under the dlrec-
            tion of the named insured, whether particularly            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,    abov~e referred   to, and it is agreed that,.
             subject to the policy limits,         this policy covers the
            liability     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
             in the policy or endorsements thereto to the contrary
            notwithstanding.”
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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.”
             As stated in the first       paragraph of Form 77, the pur ose
of the endorsement is to. effectuate          the purposes of Chapter 31f:   ,
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 77 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   liability    to the injured third party.
             The construction   of the very paragraph of Form 77, first
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-
lied upon the endorsement (Form 771, which was attached to the pol-
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.”
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    Hon. R. L. Milliken,   page 3   (O-179)


                We believe this decision is controlling    in the con-
    struction   of Form 77 which we have given herein.
                                        Yours very truly
                                               GENERALOF TEXAS
                                        ATTORNEY
                                        By /s/ Walter R. Koch
                                        Walter R. Koch, Assistant

    APPROVED:
    Gerald C. Mann
    ATTOBNEY GENERALOF TEXAS
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