Sheath found in taxi caught by southern poet (8)
I believe the answer is:
scabbard
'sheath' is the definition.
(scabbard is a kind of sheath)
'taxi caught by southern poet' is the wordplay.
'taxi' becomes 'cab' (synonyms).
'caught by' is an insertion indicator.
'southern' becomes 'S' (abbreviation).
'poet' becomes 'bard' (bard is a kind of poet).
's'+'bard'='sbard'
'cab' put into 'sbard' is 'SCABBARD'.
'found in' acts as a link.
(Other definitions for scabbard that I've seen before include "Sheath for sword or dagger" , "foil container?" , "Case for a sword" , "Holding a weapon" , "Something to stick the knife into" .)