Associated Indem. Corp. v. Wachsmith

• Decision Date: 20 February 1940
• Docket Number: 27719.
• Citation: 99 P.2d 420,2 Wn.2d 679
• Parties: ASSOCIATED INDEMNITY CORPORATION v. WACHSMITH et al.
• Court: Washington Supreme Court

99 P.2d 420

2 Wn.2d 679

ASSOCIATED INDEMNITY CORPORATION v. WACHSMITH et al.

No. 27719.

Supreme Court of Washington

February 20, 1940

Department 2.

Action under the Declaratory Judgment Act by the Associated Indemnity Corporation against R. Wachsmith and others to obtain a decree as to the rights, duties, status, and legal relations of the parties under a liability policy on an automobile truck. From a judgment in favor of the plaintiff the defendants appeal.

Judgment affirmed.

Appeal from Superior Court, Yakima County; Robert J. Willis, judge.

Bruce Bartley, of Seattle, and Harry L. Olson and D. V. Morthland, both of Yakima, for appellants.

Cheney & Hutcheson, of Yakima, for respondent.

JEFFERS Justice.

This is an appeal by defendants, R. Wachsmith and wife, Richard Wachsmith, Jr., Carl Buss, United Pacific Insurance Company and Harry L. Olson, from a declaratory judgment entered in favor of plaintiff, Associated Indemnity Corporation, on February 4, 1939.

On September 17, 1935, Carl Buss, above named, was injured in an automobile collision between a truck, owned by R. Wachsmith Sr., but which at the time was being operated by his son, Richard Wachsmith, Jr., and an automobile owned by one Kenneth Martin. At the time of the accident, Buss was in the employ of R. Wachsmith, Sr., and was riding on the truck in the course of his employment. The truck was being operated with the consent of R. Wachsmith, Sr.

At the time of the accident, R. Wachsmith, Sr., held two liability insurance policies; one issued by plaintiff, and the other by defendant United Pacific Insurance Company. Thereafter, on or about October 16, 1935, Carl Buss and Kenneth Martin and wife brought a joint action against R. Wachsmith, Sr., and Richard Wachsmith, Jr. The complaint set up two causes of action; the first based upon personal injuries received by Buss; the second based upon damages to the automobile of the Martins.

On November 9, 1935, after having obtained the signatures of Wachsmith, Sr., and wife, and Wachsmith, Jr., to nonwaiver agreements, Messrs. Cheney & Hutcheson and Eugene D. Ivy, who by mutual consent were representing both insurance companies hereinBefore referred to, filed an answer on behalf of the Wachsmiths in the Buss cases.

After the trial of the Buss action had started, the trial court's attention was called to the fact that Wachsmith, Jr., was a minor, whereupon the court appointed D. V. Morthland guardian ad litem for such minor. On December 19th, Mr. Morthland filed an answer on behalf of the minor, and thereafter appeared for the minor, Messrs. Cheney & Hutcheson and Mr. Ivy appearing for the other Wachsmiths.

At the commencement of the trial, the court sustained the objection of R. Wachsmith, Sr., and wife to the introduction of any evidence on behalf of plaintiff Buss. The case proceeded, however, Before the court and jury as to the claim of the Martins against all the defendants, and as to the claim of Buss against Wachsmith, Jr. The jury returned a verdict in favor of Buss for $5,000, and in favor of the Martins for $165. Judgment was entered on the verdict in favor of the Martins, but the trial court granted a motion for judgment notwithstanding the verdict as to the Buss verdict, and dismissed the action as to Wachsmith, Jr. Upon appeal to this court, the judgment was reversed, the lower court being directed to enter judgment on the verdict in favor of Buss against Wachsmith, Jr., and to proceed further, in accordance with the opinion, as to Wachsmith, Sr. The judgment was affirmed as to the Martins. Buss v. Wachsmith, 190 Wash. 673, 70 P.2d 417. After judgment had been entered on the remittitur, and on May 25, 1938, Wachsmith, Sr., was, on motion of Buss, dismissed from the action.

On February 18, 1938, the present action was instituted by the Associated Indemnity Corporation against the defendants, under the Declaratory Judgment Act, seeking to obtain a decree as to the rights, duties, status and legal relations of the parties under its policy of liability insurance issued March 21, 1935, wherein the named insured is Richard Wachsmith, Sr. The defendants's answer was a general denial. The court, after a hearing, entered findings of fact, conclusions of law and judgment, wherein it decided that Carl Buss, at the time of receiving his injury, was an employee of Wachsmith, Sr., and was in the course of his employment; that the policy in question does not cover claims for injury to an employee of the insured sustained in the course of his employment, other than a domestic servant whose duties do not include the operation, maintenance or repair of any automobile; and that Buss was not such a domestic servant. The decree further provided that plaintiff company be relieved, discharged and exonerated from any further duty or liability to Carl Buss or Harry L. Olson, assignee of the Buss judgment. Judgment protected the rights of the Martins. Motions for new trial and for judgment notwithstanding the verdict were made and denied, and this appeal followed.

We are first met with the question of whether or not this is a proper case for the application of the Declaratory Judgment Act. Appellants contend that it is not, for the reasons (1) that the controversy cannot be terminated by this action; (2) that there is an adequate remedy available in a case pending; and (3) that the present action was not timely instituted.

Our statutes covering declaratory judgments are found in Rem.Rev.Stat. (Supp.), §§ 784-1 to 784-17, both inclusive. Section 784-1 provides: 'Courts of record within their respective jurisdictions shall have power to declare rights, status and other legal relations whether or not further relief is or could be claimed. * * *'

Section 784-2 provides: 'A person interested under a deed, will, written contract or other writings constituting a contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract or franchise and obtain a declaration of rights, status or other legal relations thereunder.'

Section 784-3 provides: 'A contract may be construed either Before or after there has been a breach thereof.'

In support of the first point raised, appellants point out that the appellant Olson is not only an assignee of Carl Buss, but is also an assignee of Kenneth Martin and wife, and that since respondent seeks no declaration in this action as to its liability or non-liability upon the Martin judgment, therefore this action, even after judgment, will leave such matter undetermined. We do not think appellants' contention tenable. Respondent admits its liability to the Martins under the policy, and has paid the judgment of $165 for damage to the Martin car. The only question respondent is seeking to have determined in this action is whether or not it is liable to Buss under its policy. That is, and has been, the real controversy, and it seems to us respondent is entitled to have a determination of that issue, regardless of the fact that the Martin claim was tried jointly with the Buss claim. We are also of the opinion that the controversy relative to the Buss judgment can and will be terminated by this action.

We are also of the opinion that the contention of appellants that relief must be denied herein because there is an action pending in the federal court for direct relief, cannot be sustained. The action in the federal court was started after this action was commenced, and it seems to us, if either court is to be deprived of jurisdiction because of the pendency of the other action, it must be the court to which application was last made for relief. Bliss Co. v. Cold Metal Process Co., 6 Cir., 102 F.2d 105. We think the words of the trial court are very much in point on this question: 'If declaratory actions are to be shunted into the discard upon the happening of such a contingency, and if their validity and effectiveness can be defeated merely by bringing a subsequent action for direct relief in another tribunal, then the declaratory judgments act is more of a joke than an important and effective part of the law of the state, and it would be far better to have it repealed than to allow it to remain on the statute books as an impotent step-child of the legislature.'

We are also of the opinion the action was timely brought. It was not, in our opinion, necessary for respondent to take action until the liability of the Wachsmiths had been determined in the prior action. Almost immediately after such determination, this action was started. We think, under the statute and under the decisions of this court and the federal court, this action was properly instituted. Acme Finance Co. v. Huse, 192 Wash. 96, 73 P.2d 341, 114 A.L.R. 1345; Schoenwald v. Diamond K. Packing Co., 192 Wash. 409, 73 P.2d 748; Inland Empire Rural, etc., Co. v. Department of Public Service, 199 Wash. 527, 92 P.2d 258; Peoples Park & Amusement Ass'n v. Anrooney, Wash., 93 P.2d 362; Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617, 108 A.L.R. 1000.

We do not think the Peoples Park & Amusement Ass'n case, supra, supports appellants' contention that this action will not lie.

Appellants contend that the United Pacific Insurance Company should have been dismissed as a party defendant, for the reason that it now appears that the statute of limitations has run against any cause of action on behalf of Buss against Wachsmith, Sr., and wife. This action was started Before the statute of limitations had run, and Before Mr. and Mrs. Wachsmith, Sr., had been dismissed from the action. We think the rule is that the rights of ...