Brucker v. Georgia Cas. Co.
| Decision Date | 25 November 1930 |
| Citation | 32 S.W.2d 1088,326 Mo. 856 |
| Parties | John Brucker, Appellant, v. Georgia Casualty Company, Macon, Georgia, Garnishee of Steve Gambaro and Frank Grassi |
| Court | Missouri Supreme Court |
Appeal from Circuit Court of City of St. Louis; Hon. John W Calhoun, Judge.
Reversed and remanded.
Joseph Goodman and James J. O'Donohoe for appellant.
(1) The policy involved in this proceeding indemnifies "against loss arising or resulting from claims upon the assured for damages on account of bodily injuries accidentally suffered or alleged to have been suffered while this policy is in force, including death resulting at any time therefrom, by any person or persons, by reason of the ownership maintenance or use of any of the automobiles as enumerated and described in the schedule." Therefore, said policy is not a repaying policy, but a liability one. State ex rel. Indemnity Co. v. Daues, 13 S.W.2d 1059; Jedlicka v. Mo. Mut. Cas. Co. (Mo. App.), 14 S.W.2d 535; Ornellas v. Fort Dearborn Cas. Underwriters (Mo App.), 16 S.W.2d 1007; Kurre v. American Indemnity Co. (Mo. App.), 17 S.W.2d 685; Swanson v. Georgia Cas. Co., 315 Mo. 1007; Schott v. Continental Auto Ins. Underwriters, 31 S.W.2d 7. Judgments are direct losses, for they work loss of credit, occupation, mental loss and cause dissolutions of co-partnerships, corporations and drive assureds into bankruptcy; while, "Handing money to a judgment plaintiff with one hand and receiving the same amount of money from the insurance company in the other is certainly not a loss." Cases supra and: Elliott v. Automobile Assn., 87 Fla. 545; American Indemnity Co. v. Fellbaum, 114 Tex. 127. (2) Regardless of the "no-action" clause, where an action is brought by a third party against the assured under an indemnity policy a judgment in the action becomes, as between plaintiff, defendant and the insurance company, a debt owing unconditionally by the company to the defendant (assured) which may be reached by garnishment, and this is true whether insurer does or does not defend the action. Cases supra and: Wehrhahn v. Fort Dearborn Casualty Underwriters, 221 Mo.App. 230; Mahr v. Maryland Cas. Co., 132 Minn. 336; Standard Printing Co. v. Fidelity & Deposit Co., 138 Minn. 304; Powers v. Wilson, Georgia Cas. Co., Garnishee, 139 Minn. 309; Capelle v. U.S. Fidelity & G. Co., 80 N.H. 481; Illinois Surety Co. v. Maguire, 150 Wis. 544; Ross v. Amer. Emp. L. Ins. Co., 56 N.J.Eq. 41; Pickett v. Cas. Co., 60 S.C. 477; Meyers v. Continental Cas. Co., 12 F.2d 53; Farmers H. W. Co. v. Cas. Co., 184 Iowa 773; Fuller's Acc. Emp. Liability Insurance, pp. 452-455; Fritchie v. Extract Co., 197 Pa. St. 401; Beasley v. Newell, 40 S.C. 16; Hume Const. Co. v. Phila. Cas. Co., 32 R. I. 283; Fentress v. Royal Indemnity Co., 140 Va.App. 685; Rood on Attachments and Garnishments (1901) 147; Fenton v. Fidelity & Cas. Co., 36 Ore. 283; 14 R. C. L. 1322; 15 Cyc. 1036. (3) The "no-action" clause in said policy is by its own words restricted to an action and cannot be enlarged to prohibit ancillary proceedings to work a virtual forfeiture. In Missouri garnishment is not an action, but is characterized as an incidental remedy to the judgment; a mere sequence or dependency or proceeding supplemental to the main action; a mere mode of execution or relief, inseparably connected with the original judgment; an appendage, etc. Tinsley v. Savage, 50 Mo. 141; Ritter v. Ins. Co., 28 Mo. 140; Spengler v. Kaufman & Wilkinson, 43 Mo.App. 5; Goodman v. Gordan, 61 Mo.App. 685; Chapman v. Yancy, 173 Mo.App. 132; Owens v. McCleary, 273 S.W. (Mo. App.) 145. Garnishment not being an action, and being auxiliary of the judgment only, even a change of venue is not allowable. State ex rel. v. Hughes, 135 Mo.App. 135. And for the same reason is not removable from the state to the federal court. Bank v. Turnbull Co., 16 Wall. (83 U.S.) 190; Brucker v. Georgia Cas. Co., 14 F.2d 688. (4) To hold the no-action clause valid would invalidate the policy altogether for reasons: (a) Want of insurable interest where assureds are insolvent; (b) Encouraging strife and promoting litigation; (c) Violating the doctrine of alienation. (5) The words "to defend," as used in the policy, mean to pay the judgment. Sanders v. Ins. Co., 72 N.H. 485. (6) The insuring clause in the policy in question precedes and overrides the no-action clause because in conflict; furthermore, it is well settled that where two clauses in a contract are in conflict the first governs rather than the last; and, further, where there is a conflict, the clause promising indemnity controls over the one forfeiting indemnity. Drucker v. Western Indemnity Co., 204 Mo.App. 516; State ex rel. Security Mut. Life Ins. Co. v. Allen, 305 Mo. 607. Insurance policies held to be construed most strongly against the insured and words given the sense most beneficial to the promisee." State ex rel. v. Ellison, 266 Mo. 580.
Holland, Lashly & Donnell and Robert A. Holland, Jr., for respondent.
(1) The lower court did not err in sustaining respondent's demurrer to the second amended denial of appellant. By the initial clause of the policy respondent agreed to indemnify the assured against loss arising or resulting from claims upon the assured for damages on account of bodily injuries accidentally suffered or alleged to have been suffered while the policy was in force. There is a fundamental difference between a contract of indemnity against loss and a contract of insurance against liability. And where a policy is of the former nature, there can be no right of action thereon until the assured has sustained a loss. Respondent herein did not allege any loss. State ex rel. Auto. Ins. Co. v. Trimble, 297 Mo. 659; State ex rel. Security Mut. Life Ins. Co. v. Allen, 305 Mo. 607; Stag Mining Co. v. Fidelity & Cas. Co., 209 S.W. 321; Dunham v. Casualty Co., 179 Mo.App. 558; Skaggs v. Mining & Milling Co., 208 Mo.App. 596; Most v. Bonding & Ins. Co., 196 S.W. 1064; Bray v. Culp, 219 S.W. 128; Allen v. Life Ins. Co., 145 F. 881; Kingman & Co. v. Maryland Cas. Co., 65 Ind.App. 301; London & L. Indemnity Co. v. Cosgriff, 144 Md. 660; Frye v. Gas & E. Co., 97 Me. 241; Curtis & G. Co. v. Life Ins. Co., 58 Okla. 470; Fidelity & C. Co. v. Martin, 163 Ky. 12; Carter v. Life Ins. Co., 76 Kan. 275; Travelers Ins. Co. v. Moses, 63 N.J.Eq. 260; Goodman v. Georgia Cas. Co., 189 Ala. 130; McBride v. Life Ins. Co., 126 Ark. 528; Cayard v. Robertson, 123 Tenn. 382; Finley v. U.S. Cas. Co., 113 Tenn. 592; American Employers' Liability Ins. Co. v. Fordyce, 62 Ark. 562; U.S. Fidelity & Guaranty Co. v. Maryland Cas. Co., 182 Ill.App. 438; Poe et al. v. Philadelphia Cas. Co., 118 Md. 347; Connolly v. Bolster, 187 Mass. 266; O'Connell v. Railroad Co., 187 Mass. 272; Stenborn v. Engine Co., 137 Wis. 564; Eberlein v. Fidelity & Deposit Co., 164 Wis. 242; Newton v. Seeley, 117 N.C. 528; Cushman v. Carbondale Fuel Co., 122 Iowa 656; Wehrhahn v. Cas. Co., 221 Mo.App. 230; Pfeiler v. Penn. Allen Co., 240 Pa. 468. (2) The lower court did not err in sustaining respondent's demurrer to the second amended denial of appellant. Not only was the initial clause a contract of indemnity against loss, but said clause, in one and the same sentence, was made subject to a subsequent "no-action" clause. By the latter clause the loss contemplated was definitely described as a loss that must be sustained by the assured by the payment of money in satisfaction of a personal injury judgment. Said policy was not a policy of insurance against liability, but a contract of indemnity against loss. Authorities supra. (3) The policy contained a "no-action" clause which provided that no action could be brought by the assured except for a loss sustained by the payment in money by the assured of a judgment in a personal injury suit. A garnisher can under no circumstances have greater rights than the judgment debtor. Secs. 1858, 1859, R. S. 1919; Baker v. Duwamish Mill Co., 149 F. 612; Bouvier's Law Dictionary (3 Rev.) 128. (4) The "no-action" clause was a valid provision and by it the payment in money by the assured of a judgment entered in a personal injury suit was made a condition precedent to any right of recovery by the assured. Authorities under Point 1, supra. (5) The policy contained no absolute agreement to defend the assured. The wording of said clause was as follows: "To Defend the Assured and Pay Expenses and Costs Subject to the Following Conditions;" and later followed Condition D, being the "no-action" clause. The ordinary "defend" agreement contained in an ordinary policy is merely an agreement to "defend" the assured. Such an agreement is clearly an agreement merely to present a defense to any personal injury suit and not an agreement to defend and also to pay any judgment. Much more is this so in the present case. Allen v. Life Ins. Co., 145 F. 881; Fidelity & C. Co. v. Martin, 163 Ky. 12; O'Connell v. Railroad Co., 187 Mass. 272; Carter v. Life Ins. Co., 76 Kan. 275; Goodman v. Georgia Cas. Co., 189 Ala. 130; Poe v. Philadelphia Cas. Co., 118 Md. 347; Connolly v. Bolster, 187 Mass. 266. (6) The clause indemnifying against loss and the clause in reference to defending suits were both expressly, by words in the same sentence, made subject to certain conditions, one of which was the "no-action" clause. There could not in the nature of things, therefore, be any conflict between the said initial clauses and the said "no-action" clause. The wording of the initial clauses and the wording of the "no-action" clause are such that they are in no way conflicting. Authorities under Point 1, supra.
The plaintiff, April 30, 1925, in the Circuit Court of the City of St. Louis, recovered judgment against the defendants...
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