Alms & Doepke Co. v. Johnson

• Decision Date: 08 March 1954
• Citation: 51 A.L.R.2d 588,128 N.E.2d 250,98 Ohio App. 78
• Parties: , 51 A.L.R.2d 588, 57 O.O. 177 ALMS & DOEPKE CO., Appellee, v. JOHNSON et al., Appellees; Ohio Farmers Indemnity Co., Appellant.
• Court: Ohio Court of Appeals

Page 78

98 Ohio App. 78

128 N.E.2d 250, 51 A.L.R.2d 588, 57 O.O. 177

ALMS & DOEPKE CO., Appellee, v. JOHNSON et al., Appellees Ohio Farmers Indemnity Co., Appellant.

Court of Appeals of Ohio, Hamilton County.

March 8, 1954.

Leo J. Brumleve, Jr., and Edward J. Utz, Cincinnati, for appellant, Ohio Farmers Indemnity Co.

Anthony J. DeCenso and Julius Samuels, Cincinnati, for appellee.

MATTHEWS, Presiding Judge.

This action was commenced in the Court of Common Pleas of Hamilton County, Ohio, on August 15, 1952, against Marian C. Johnson, against whom the plaintiff had theretofore obtained a judgment for $443.59, in the Municipal Court of Cincinnati, Ohio Farmers Indemnity Company, a corporation, and Lester W. Bright. It alleged that it had caused execution to be issued on such judgment, which had been returned unsatisfied, and that Marian C. Johnson did not have sufficient real or personal property subject to execution to satisfy the judgment. Plaintiff alleged also that Ohio Farmers Indemnity Company and Lester W. Bright had property, money, and credits in their possession belonging to Marian C. Johnson.

The prayer is that Ohio Farmers Indemnity Company and Lester W. Bright be enjoined from paying anything to Marian C. Johnson, and that her peoperty in their possession be applied in satisfaction of plaintiff's judgment against her.

The court found in favor of the plaintiff and rendered judgment in its favor, 115 N.E.2d 190. This appeal is from that judgment.

While the defendants filed general denials, there is actually no dispute on essential facts. The plaintiff's judgment against Marian C. Johnson was rendered on November 6, 1948. On February 1, 1952, she was injured in a collision with an automobile owned and operated by the defendant Lester W. Bright, resulting in a claim by her against him for damages. At that time, Lester W. Bright and Betty S. Bright, his wife, were the insured in a policy of insurance issued to them by the defendant Ohio Farmers Indemnity Company in which it agreed, under certain conditions, to protect them against loss resulting from claims for damages for personal injuries inflicted in the operation of a described automobile.

Subject to certain conditions, the following is the provision fixing its liability.

'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness, or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance, or use of the automobile.'

On September 11, 1952, Marian C. Johnson commenced an action in the Common Pleas Court of Hamilton County, for damages on account of the personal injuries sustained by her in the collision with the automobile owned and operated by the defendant Lester W. Bright.

On September 25, 1952, the defendant Ohio Farmers Indemnity Company paid Marian C. Johnson the sum of $4,000, 'In full satisfaction and discharge of all claims against Lester W. Bright accrued or to accrue with respect to * * * all injuries * * * arising from an accident occurring on or about the 1st day of February, 1952.'

The defendants in the action now before the court were served with summons on August 15, 1952, so that there can be no doubt that Ohio Farmers Indemnity Company must be charged with knowledge of the plaintiff's unsatisfied judgment at the time it made payment to Marian C. Johnson, the judgment debtor. Therefore, we assume that this case must be determined as though the payment had not been made. It is not claimed otherwise.

The first subject to be considered is the legal status of the parties under the insurance policy issued by Ohio Farmers Indemnity Company to Lester W. Bright and his wife. It seems clear that when it was issued, the only parties to it were the insurer and the insured, who were also the beneficiaries. The time for performance by the insurer was when injury was inflicted through the wrongful act of the insured. It then became the insurer's duty, upon notice, to defend and protect; but that duty was owed to the insured, that is to Lester W. Bright and his wife. It owed no duty under the policy, or otherwise, to Marian C. Johnson. It so happened that its duty to defend and indemnify the insured placed it in opposition to her. Ohio Farmers Indemnity Company was not obligated to her in any way, and, of course, it was not obligated to the Alms & Doepke Company. It was obligated to Lester W. Bright, against whom Marian C. Johnson, had a claim resulting from the physical injury she had received in the collision with the automobile owned and operated by Bright.

Considering the plaintiff's case, as based solely on the rights of the parties as determined by the policy of insurance and unaffected by any statutory provision, it presents the question of whether a judgment creditor, either by proceedings in aid of execution or by creditor's bill, can subject to the payment of its judgment a debt due to a debtor of the judgment debtor. It seems clear to us that this cannot be done. It would violate the fundamental rule that only the property of the judgment debtor can be subjected to the satisfaction of the judgment. Certainly, in the absence of a statute to the contrary, the judgment debtor, Marian C. Johnson, was not a party to the policy of insurance, either expressly or by implication. The policy was issued to and for the protection of Lester W. Bright and his wife. It is true that their protection might require payment to Marian C. Johnson, but that certainly would not place her in the class of third party beneficiaries. She had no property right of any sort in the policy of insurance. Her debtor was the owner of that chose in action.

We had been cited to no Ohio case in which this subject has been discussed, and we have found none. However, in other jurisdictions, relevant decisions are not lacking. As frequently happens as to fundamental principles, the cases are not numerous.

In Jones v. Huntington, 9 Mo. 249, a much stronger appeal to the conscience of the chancellor was presented and still the chancellor denied relief. Jones had recovered a judgment against Hamilton, upon which execution had been issued and returned unsatisfied. Myers, of the state of Illinois, who was indebted to Hamilton, was beyond the jurisdiction of the Missouri court. Huntington, of Missouri, was indebted to Myers. The creditor's bill sought to subject the debt due by Huntington to Myers to the Jones judgment against Hamilton, on the ground that Myers was a nonresident. Myers entered his appearance and demurred to the bill.

In affirming the action of the trial court, sustaining the demurrer and dismissing the action, the Supreme Court said, at page 250:

'It is hard to imagine a ground on which this proceeding can be sustained. Myers, being a nonresident, and having nothing here on which the jurisdiction of a court of equity could attach, was improperly made a party, and under such circumstances no court would have been warranted in rendering a decree against him. Such a decree would have been null and void. The objection however arising from the fact of his nonresidence has been obviated by his appearing in court, and entering a demurrer to the bill. He can no longer insist that the courts of this state have no jurisdiction of his person. But although he has given the complainant this advantage, on what principle can he support his proceeding? The case in the bill would go a bow-shot further than any yet has gone. A debtor of the defendant in the execution has, under some circumstances, been made to pay his debt to the plaintiff, but by this bill the plaintiff in an execution seeks to recover his debt from one who is indebted to the debtor of the defendant.'

And, at page 251, ibid., it is stated:

'It is a begging of the question, to say, that the complainant has a right against the debtor of Myers. The effect of the argument is, that a creditor may, in a court of equity, compel a third person to pay his debt, because his debtor is unable to do it.'

There are other cases in which the same principle has been applied. It is found stated by many writers on the subject. In discussing creditor's bills in 14 American Jurisprudence, 714, Section 76, it is stated:

'While a judgment creditor may in equity reach a debt due his debtor, he cannot go further and reach a debt to the debtor of his debtor.'

Also, in 21 C.J.S. Creditors' Suits, § 16, p. 1066, it is emphasized in bold face type that: 'A debt due to a debtor of the debtor is not subject to a creditors' bill', and cited in support of the text, among other cases, is Jones v. Huntington, supra.

We conclude both upon reason and authority that a debt due to a debtor of a judgment debtor cannot be subjected to the judgment debt by any proceeding known to the law.

The final question is whether Sections 9510-3 and 9510-4, General Code, Sections 3929.05 and 3929.06, Revised Code, have so altered the relations between indemnity companies and the insured as to enable the injured person after securing a judgment against the insured to require the insurer, by proceedings in aid or by a creditor's bill, to pay such judgment under favor of Section 11760 et seq., General Code, Section 2333.01 et seq., Revised Code. The action at bar is an independent original action brought under Section 11760, General Code, as distinguished from an ancillary proceeding in aid of execution, such as is authorized by subsequent sections; and it is suggested that the judgment creditor, by...