Allstate Ins. Co. v. Hill, 21672

• Citation: 218 Ga. 430,128 S.E.2d 321
• Decision Date: 22 October 1962
• Docket Number: No. 21672,21672
• Parties: ALLSTATE INSURANCE COMPANY v. Frank E. HILL et al.
• Court: Supreme Court of Georgia

Page 321

128 S.E.2d 321

218 Ga. 430

ALLSTATE INSURANCE COMPANY v. Frank E. HILL et al.

No. 21672.

Supreme Court of Georgia.

Oct. 22, 1962.

Syllabus by the Court

1. Ordinarily, neither a party to a suit at law nor a third party has the right to enjoin a suit in a court of law unless it first be shown that such party has an interest to protect and unless it second be shown that the party has no adequate remedy at law to protect its interest and that if equity does not intervene to prevent further proceedings in the court of law it will suffer injury and damage.

2. The evidence disclosing that the plaintiff was without an adequate remedy at law and that the purpose of its suit was to prevent the defendant, Hill, from maintaining a cross action for damages in a suit brought by its insured against Hill for damages, both actions growing out of an automobile collision, and Hill having executed a release to the plaintiff and its insured settling in full his claim and the claim of his wife against the insured, the plaintiff, to prevent a multiplicity of suits and to end litigation, was entitled to an injunction restraining Hill from prosecuting his counter-claim.

John A. Dunaway, Hass, Dunaway, Shelfer & Hass, Atlanta, for plaintiff in error.

Nall, Miller, Cadenhead & Dennis; Edward S. White, Poole, Pearce & Hall, William F. Lozier, Atlanta, for defendant in error.

ALMAND, Justice.

This case presents only one question for decision, viz.: Where an insurance company issues a standard automobile liability policy to A, and A and B are parties to the collision of their respective automobiles out of which B claims damages for personal injuries to himself and his wife and property damages, and the insurer of A, acting under its insurance policy covering the liability of A, pays to B a sum of money causing B to execute a release which recites that the money so received was in full settlement and satisfaction of all claims B had against A and any other party charged or chargeable with responsibility or liability growing out of the accident, and A, the insured, subsequently sues B for injuries sustained by A in the accident, and B in his answer to said suit sets up a counter-claim against A for the damages B sustained in the accident, can the insurer, when called upon by A to defend against the counter-claim, in an equitable action against B, enjoin B from prosecuting his counter-claim against A?

The question presented arises from the filing of an equitable petition by Allstate Insurance Company against Frank E. Hill, Mrs. Irene Ericson and Reserve Insurance Company. It was alleged that in February of 1960 while Mrs. Ericson was driving an automobile covered by a policy of liability insurance issued by Allstate, she was involved in a collision with the defendant, Hill, and his automobile. One of the provisions of the insurance policy issued by Allstate and covering the Ericson car provided: 'Allstate will defend any law suit, even if groundless, false, or fraudulent, against any insured for such damages which are payable under the terms of this policy, but may make such settlement of any claim or suit as it deems expedient.' Allstate, acting under this provision, made a settlement with Hill, paying to him and his wife the sum of $3,700. The Hills executed a release acknowledging receipt of said sum which release recited that they remised, released and forever discharged 'Mrs. Irene M. Erickson [Ericson] and any other person, partnership, firm, or corporation charged or chargeable with responsibility or liability * * * from any and all claims, demands, damages, costs, expenses loss of services, actions and causes of actions arising from any act or occurrence from the beginning of the world up to the present time, and in particular on account of personal injury, disability, property damage, loss of service and loss or damages of any kind sustained or that we or either of us hereafter may sustain in consequence of an accident that occurred on or about the 7th day of February, 1960, at or near Redan Rd. and Redan Circle, DeKalb County, Ga.' The release provided, in part: 'We and each of us understand that the parties hereby released admit no liability of any sort by reason of said accident and that said payments and settlements in compromise are made to terminate further controversy respecting all claims for damages that we have heretofore asserted or that we or our personal representatives might hereafter asset because of said accident.'

Mrs. Ericson subsequently filed suit in DeKalb Superior Court against Hill seeking to recover damages for injuries she sustained in the collision of February, 1960. Hill, in his answer to the suit of Mrs. Ericson, set out a counter-claim and is seeking to recover damages for injuries to his person and property by reason of the said collision. Mrs. Ericson, the insured, has called upon Allstate to defend her against the counter-claim of Hill and to pay whatever judgment he may recover but she refuses to permit Allstate to plead the release executed by Hill. It was alleged that Allstate had no adequate remedy at law and the prayers of the petition were that the defendants, Hill and his insurer, be enjoined from further prosecuting Hill's counterclaim or in the alternative that Allstate be permitted to intervene in the Ericson v. Hill suit. As to Mrs. Hill there was no specific prayer for relief.

On the interlocutory hearing all the essential facts alleged in the petition of Allstate were proven. No contention or evidence was introduced questioning the validity of the release executed by Hill or that Hill was not barred by the release. There being no disputed issue of fact or no conflict in the evidence, the primary question is one of law, viz.: Do these undisputed facts require a court of equity to grant the injunctive relief sought by Allstate?

1. Ordinarily, neither a party to a suit at law nor a third party has the right to enjoin a suit in a court of law (see Stone v. King-Hodgson Company, 140 Ga. 487(2), 79 S.E. 122) unless it first be shown that such party has an interest to protect and unless it second be shown that the party has no adequate remedy at law to protect its interest and that if equity does not intervene to prevent further proceedings in the court of law it will suffer injury and damage. See Williams v. Stewart, 56 Ga. 663. The record discloses that Allstate was a party to the release executed by Hill wherein he released Allstate from all claims growing out of the collision with the Ericson automobile in February, 1960. Now, in the cross-action to Mrs. Ericson's suit, Hill seeks to recover a judgment for the damages for which he has been fully compensated, well knowing that if he recovers a judgment against Mrs. Ericson he will have a right of action against Allstate. Hill having released Allstate from liability for the injuries complained of in his counterclaim, Allstate clearly has a valuable interest in the Ericson v. Hill suit which it has a right to protect in a court of equity, provided it shows grounds for equitable relief.

2. We come now to the question as to whether Allstate has equitable grounds to enjoin Hill from prosecuting his counter-claim in the suit of Mrs. Ericson. Code § 55-103 provides: 'Equity will not enjoin the proceedings and processes of a court of law, unless there shall be some intervening equity or other proper defense of which the party, without fault on his part, cannot avail himself at law.' Code § 37-1501 provides: 'It being the interest of this State that there shall be an end of litigation, equity will entertain a bill of peace: 1. To confirm some right which has been previously satisfactorily established by more than one legal trial, and is likely to be again litigated. 2. To avoid a multiplicity of suits, by establishing a right, in favor of or against several persons, which is likely to be the subject of legal controversy, or in other similar cases.' 'Where a bill of peace was filed for the purpose of restraining a defendant from prosecuting his action of ejectment for the recovery of a tract of land: held, that the principle upon which Courts of Equity interfere and grant relief in such cases is to suppress useless litigation; to prevent multiplicity of suits; to restrain oppressive litigation, and to prevent irreparable mischief.' Bond v. Little, 10 Ga. 395(1). Equity will assume jurisdiction for the purpose of preventing a multiplicity of suits, the general principle being that the necessity of multiple suits in itself constitutes the inadequacy of remedies at law which confers equitable jurisdiction. While the petition of Allstate is not actually denominated a bill of peace, its purpose is to end litigation as provided by Code § 37-1501. The origin of the doctrine that equity will intervene to prevent a multiplicity of suits at law is traced to what are called bills of peace or those in the nature of bills of peace. See Sharon v. Tucker, 144 U.S. 533, 12 S.Ct. 720, 36 L.Ed. 532; Illinois Steel Co. v. Schroeder, 133 Wis. 561, 113 N.W. 51, 14 L.R.A.,N.S., 239. See also Shingler v. Shingler, 184 Ga. 671(4), 192 S.E. 824. 'The prevention of vexatious, oppressive and ruinous litigation is a frequent cause for the exercise of equity jurisdiction, and injunctions to restrain a multiplicity of suits in such cases are not only permitted, but favored, by the courts.' 1 Pomeroy, Equity Jurisprudence, (5th Ed.), § 261(j), p. 551.

Though Allstate, as an alternative prayer, prays to be allowed to intervene in the Ericson v. Hill suit, there is no provision of law allowing Allstate to intervene. See Askew v. Carswell, 63 Ga. 162, and Delaney v. Sheehan, 138 Ga. 510, 75 S.E. 632. Allstate thus is in the position of holding a complete release for injuries for which Hill seeks to recover a judgment against its insured under a policy wherein it is not only required to defend against Hill, but in the event of a judgment against its...