Olmstead

At all times pertinent here one Jordan was engaged in the car rental 'business in the city of Pasadena, California. By ordinance, duly enacted, the city of Pasadena required all those engaged in the car rental business within its boundaries to carry liability insurance. In compliance with the requirements of said ordinance Jordan secured a policy of insurance from appellant. This policy insured against loss the car owner and the person to whom a rental was made. Jordan rented a car to one Richard son who, while driving the rented car, struck and injured appellee Olmstead. Thereafter Olmstead instituted suit in a state court of California seeking damages from Jordan and Richardson. A default judgment was entered against Richardson in the sum of $31,014. This amount included $25,000 for personal injuries and $6,000 for loss of earnings and expenses incurred. Subsequent to the entry of the default judgment against Richardson a stipulated judgment in the sum of $3,500 was entered against Jordan, this with the knowledge and consent of the appellant. This sum was paid Olmstead and proper satisfaction of the stipulated judgment was duly entered.

The instant case was brought in the…