American Transport Co. v. Central Indiana Ry. Co.

Decision Date01 December 1970
Docket NumberNo. 1169S275,1169S275
Citation264 N.E.2d 64,255 Ind. 319
PartiesAMERICAN TRANSPORT COMPANY, Transport Motor Express, Liberty Mutual Insurance Company, and the Anderson Banking Company, Administrator of the Estate of James Edward Jones, Deceased, Appellants, v. CENTRAL INDIANA RAILWAY COMPANY, Appellee.
CourtIndiana Supreme Court

Howard S. Young, Jr., Young & Young, R. Stanley Lawton, Alan H. Lobley, Ice, Miller, Donadio & Ryan, Indianapolis, Shine & Shine, Gerald P. Shine, Anderson, for appellants.

Wilbur F. Pell, Jr., Pell & Matchett, Shelbyville, Schrenker & Schrenker, Anderson, for appellee.

GIVAN, Judge.

Madison Superior Court, No. 2, issued a temporary injunction restraining The Anderson Banking Company as Administrator of the Estate of James Edward Jones from executing against the appellee, Central Indiana Railway Company, for the entire sum of a judgment rendered in a tort action. The administrator brings this appeal in which American Transport Company and its insurer, Liberty Mutual Insurance Company, join.

The facts in the record before us are as follows:

The original action for damages for the death of James Edward Jones was brought against American Transport Company and Central Indiana Railway Company as joint tort-feasors. The cause was venued to the Shelby Circuit Court where in due course the cause was submitted to a jury and a verdict returned for plaintiff in the amount of $132,000.00. Both American Transport and Central Indiana Railway filed motions for new trial, which were overruled. The administrator then entered into an agreement with American Transport and its insurance carrier, Liberty Mutual Insurance Company, in what was designated as a 'covenant not to execute.' By the terms of the agreement subject to the approval of the probate court having jurisdiction of the Estate of James Edward Jones, American Transport Company agreed to dismiss its appeal and abandon its legal defenses. The Anderson Banking Company as administrator agreed to pursue legal and equitable remedies for the collection of the judgment against Central Indiana Railway alone. Liberty Mutual Insurance Company on behalf of American Transport Company, Inc. agreed to advance to The Anderson Banking Company as Administrator of the Estate of James Edward Jones the sum of $85,000.00 upon the understanding and condition that if the administrator was ultimately unsuccessful in collecting its judgment from Central Indiana Railway it would have no responsibility to repay the $85,000.00 to Liberty Mutual. If on the other hand The Anderson Banking Company as administrator succeeded in its action against Central Indiana Railway in collecting any part of the judgment, the administrator agreed that it would set aside from such funds the sum of $47,000.00 plus interest on the amount of the judgment until it was paid, plus court costs and plus the cost of printing the briefs on appeal should the matter be pursued that far. These sums so calculated were to be the property of the administrator and not subject to the repayment of the advancements made pursuant to the agreement. Funds received from Central Indiana Railway in excess of the above amounts were to be used for the purpose of repaying Liberty Mutual Insurance Company the monies advanced pursuant to the agreement. It was the stated purpose in the agreement to furnish the widow and dependent children of the decedent the gross amount of $85,000.00 free from any and all chance of loss and to make those funds immediately available, but at the same time retain for the widow and dependent children the opportunity to recover the full amount of the original judgment. It was specified that the amount of repayment would never exceed $85,000.00, but that it would be possible that the entire advancement of $85,000.00 would be recovered by the company. This agreement was approved by the Madison Superior Court on July 29, 1965. American Transport immediately dismissed its appeal, but the railroad continued its appeal and the Appellate Court on October 14, 1968, affirmed the judgment against the railroad. See 240 N.E.2d 840. This Court denied transfer with an opinion. See 247 N.E.2d 208.

On July 18, 1969, the railroad filed its complaint for temporary and permanent injunction in Madison Superior Court, No. 2, against ...

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