Blue Bird Cab Co. v. American Fidelity & Cas. Co.

• Decision Date: 14 June 1941
• Docket Number: 748.
• Citation: 15 S.E.2d 295,219 N.C. 788
• Parties: BLUE BIRD CAB CO., Inc., v. AMERICAN FIDELITY & CASUALTY CO., Inc.
• Court: North Carolina Supreme Court

15 S.E.2d 295

219 N.C. 788

BLUE BIRD CAB CO., Inc., v. AMERICAN FIDELITY & CASUALTY CO., Inc.

No. 748.

Supreme Court of North Carolina

June 14, 1941

The issues and verdict indicate the controversy:

"1. Did the plaintiff assume liability and incur expense in connection with the claim of Dorothy Rumley contrary to the terms of the policy, as alleged in the answer? Ans: No.

"2. Did the plaintiff incur expense for the imperative surgical relief of Dorothy Rumley, as alleged in the complaint? Ans Yes.

"3. Did the defendant authorize, or ratify, the incurring of such medical expense, as alleged in the complaint? Ans: Yes.

"4. Was the settlement of the claim of Dorothy Rumley and Gladys Rumley Hoffman made by the plaintiff in good faith, upon reasonable terms and with reasonable prudence, and care, as alleged in the complaint? Ans: Yes.

"5. What amount, if any, is the plaintiff entitled to recover of the defendant by reason of the defense of the actions brought by the guardian of Dorothy Rumley and Mrs. Gladys Rumley Hoffman and by reason of the settlement of said claims? Ans $3,591.50, with interest from January 29, 1940, on the sum of $2,981.50.

"6. What amount, if any, is the plaintiff entitled to recover of the defendant by reason of expense incurred by the plaintiff for the imperative surgical relief of Dorothy Rumley? Ans $485.00, with interest from April 29, 1940."

The court below rendered judgment on the verdict.

The pertinent portions of the policy relied on, either by the plaintiff or the defendant, are as follows:

"Stock Company Automobile Policy--No. PT 29210.

"American Fidelity and Casualty Co., Incorporated, Richmond, Virginia. (Herein called the Company). In consideration of the Premium Herein Provided, Does Hereby Agree:

"To Indemnify the Assured named in Statement (I) of the Schedule of Statements and herein called the Assured:

"Against Loss from the Liability Imposed Upon the Assured arising or resulting from claims upon the assured for actual damages to persons accidentally receiving bodily injuries, and damage to property by reason of the ownership, maintenance or use of any of the automobiles or motor vehicles as enumerated and described in Statement VI of the schedule of statements only while being operated for the purposes stated and subject to the limitations in Statement VIII of said schedule, to an amount not exceeding the limits hereinafter stated in Statement IV of said schedule, if such claims are made on account of Bodily Injury To Persons.

"(1) Bodily Injury or Death suffered by any person or persons, other than the Assured or his employees, as the result of an accident occurring while this Policy is in force; including such first medical aid as shall be imperative at the time of any such accident.

"Defend and Pay Costs and Expense--

"(3) To Defend in the name and on behalf of the Assured any suit brought against the Assured to enforce a claim, whether groundless or not, provided notices are given to it as hereinafter required, for damages suffered or alleged to have been suffered on account of bodily injuries or death, or the damage to or the destruction of property, as the result of an accident covered by this Policy and caused in the manner and under the circumstances as herein provided, and while this Policy is in force and to pay all costs taxed against the Assured in any legal procedure against the Assured, which is defended by the Company in accordance with the foregoing agreement; and to pay interest accruing upon any judgment rendered in connection therewith, on that portion of the judgment not in excess of the Policy limit, until the Company has paid, tendered, or deposited in court, such part of such judgment as does not exceed the limits of the Company's liability under this Policy, provided, however, that the Company shall not be obligated to make or furnish any appeal bond in connection with any suit or suits defended hereunder.

"This Policy is issued by the Company subject to the following conditions, limitations and agreements which are a part of the Policy and to which the Assured, by the acceptance of this Policy, agrees:

"Co-Operation of Assured; Expense.

"(B) The assured shall cooperate with the Company in securing information and evidence and the attendance of witnesses and in the settlement or defense of any suit or prosecution of any appeal. In case of trial the Assured, if requested, shall present himself in due time for the preparation of his defense at the office of the attorneys designated by the Company and shall attend such trial of such suit. The Assured shall not admit or voluntarily assume any liability nor offer to settle any claim, nor incur any expense, except for such immediate surgical relief as is imperative, without the written consent of the Company. The Assured shall at all times render to the Company all co-operation and assistance within his power. Failure to co-operate in any of the foregoing respects shall render this Policy null and void.

"Assured's Right of Recovery, etc.

"(E) This insurance is intended solely as an indemnification to the Assured against loss from the causes named and for certain expenses enumerated herein, and is not intended to be for the benefit of third parties, except as herein specifically set out. Provided, however, that should any law regulating the vehicles insured hereunder require the Company to alter the terms of this Policy by endorsement or otherwise so as to make the Company liable for any loss which it would not otherwise be required to pay under the terms of this Policy, then the Assured shall reimburse the Company for any and all such loss, cost or expense, paid or incurred by the Company as the result of any such statute or statutory endorsement. The Company shall not be liable to pay any loss nor shall any action be brought against the Company, to recover under this Policy until a final judgment shall have been recovered against the Assured in the Court of last resort after trial of the issue, and in which suit the Company is not joined as a party, provided, however, that the Company shall have the right to deduct from the payment of any loss hereunder, any sums due the Company by the Assured. Bankruptcy or insolvency of the Assured shall not release the Company from the payment of damages for injuries sustained or loss occasioned during the life of this Policy and in case execution against the Assured is returned unsatisfied in an action brought by the injured person, or by his or her personal representative in case death results from the accident, because of such bankruptcy or insolvency, an action may be maintained by such injured person, or his or her personal representative, against the Company on this Policy and subject to its terms and limitations for the amount of the judgment in said action, not exceeding the limits provided in this Policy. In no event shall any action be maintained against the Company under this Policy unless brought within one year after right of action accrues, provided, however, that the minimum time set by the statutes of the State in which the Assured resides shall govern. The inclusion herein of more than one Assured shall not operate to increase the limits of the Company's liability.

"Alterations in Policy; Notice

"(L) No erasure or change appearing on this Policy as originally printed nor change or waiver of any of its terms or conditions or statements, whether made before or after the date of this Policy, shall be valid unless set forth in an endorsement added hereto and signed by either the President, Vice-President, Secretary or one of the Assistant Secretaries of the Company. Neither notice given to nor the knowledge of any agent or any person, whether received or acquired before or after the date of this Policy, shall be held to waive any of the terms or conditions, or statements of this Policy, or to preclude the Company from asserting any defense under said terms, conditions, and statements, unless set forth in an endorsement added hereto and signed by one of the said officers.

"Authorized Agents

"(M) No person shall be deemed an agent of the Company unless such person is authorized in writing as such agent by either the President, one of the Vice-Presidents, Secretary or one of the Assistant Secretaries of the Company."

It is stipulated and agreed that the policy above mentioned covered thirty-five taxicabs owned and operated by the plaintiff. The court below rendered judgment for plaintiff on the verdict.

The defendant made numerous exceptions and assignments of error and appealed to the Supreme Court. The material ones and necessary facts will be set forth in the opinion.

Roy L. Deal, of Winston-Salem, for plaintiff.

Ratcliff, Hudson & Ferrell, of Winston-Salem, for defendant.

CLARKSON Justice.

This was an action brought by the plaintiff against the defendant to recover on a policy of indemnity or liability insurance issued by the defendant, insuring the plaintiff as a taxicab company against liability from the operation of its taxicabs. The policy was in full force and effect and the premium was paid when the accident occurred. The plaintiff brings this action to recover against defendant certain sums of money paid out by it and as shown by judgment recovered against it and contends that this was done under the terms of the policy above set forth; that the action was brought against it by passengers for injuries alleged to have been caused by the negligence of plaintiff. It is the plaintiff's contention that the language of the policy authorizes the assured to render such immediate surgical relief as is imperative, without the consent of the company; that it appoints the assured the agent of the insurance company to employ...