Burling v. Schroeder Hotel Co.

• Decision Date: 20 May 1941
• Citation: 298 N.W. 207,238 Wis. 17
• Parties: BURLING v. SCHROEDER HOTEL CO. et al. (two cases) SAME v. MASSACHUSETTS BONDING & INS. CO.
• Court: Wisconsin Supreme Court

238 Wis. 17

298 N.W. 207

BURLING

v.SCHROEDER HOTEL CO. et al. (two cases)

SAME

v.MASSACHUSETTS BONDING & INS. CO.

Supreme Court of Wisconsin.

May 20, 1941.

Appeals from orders of the Circuit Court for Milwaukee County; Gustave G. Gehrz, Judge, and from a judgment of the Circuit Court for Milwaukee County; Charles L. Aarons, Judge.

Orders and judgment affirmed.

No. 92. This was an action begun by the plaintiff-respondent, H. R. Burling, in the circuit court for Milwaukee County, against defendant, Schroeder Hotel Company, a Wisconsin corporation, for personal injuries sustained by plaintiff on March 18, 1934 while a guest at the Schroeder Hotel, owned and operated by the Schroeder Hotel Company, as the result of a fall on a stairway in said hotel. From a judgment dismissing the complaint, plaintiff appealed. The judgment was reversed with directions to enter judgment in favor of the plaintiff against said hotel company. See H. R. Burling v. Schroeder Hotel Co., 235 Wis. 403, 291 N.W. 810. Pursuant to the mandate of this court, judgment was entered by the trial court on July 22, 1940, in favor of the plaintiff against defendant hotel company for the sum of $9,774.55 damages and costs. On September 18, 1940, an order was entered by the circuit court in this action, Gustave G. Gehrz presiding, which order denied the application of the defendant hotel company to compel satisfaction of said judgment by tender of a certain amount of capital stock of the hotel company in conformity with an order of the United States District Court for the Eastern District of Wisconsin, and which vacated and set aside a temporary order restraining plaintiff from taking action to collect said judgment and permitted plaintiff to issue execution on said judgment. From this order, the defendant hotel company appeals.

No. 93. The circuit court for Milwaukee County, in the above action on August 28, 1940, on its own motion, entered an order making the interpleaded defendant, the Massachusetts Bonding & Insurance Company, a party to the action for the purpose of any and all motions then pending or which might thereafter be instituted. This appeal by the insurance company is from an order entered by the circuit court, Gustave G. Gehrz presiding, on September 30, 1940, denying the interpleaded defendant insurance company's motion to vacate and set aside the order of August 28 and to quash and set aside all proceedings in the action subsequent to that order.

No. 152. On September 26, 1940, plaintiff, H. R. Burling, commenced a separate action against the defendant Massachusetts Bonding and Insurance Company upon its policy of insurance issued to the Schroeder Hotel Company, to recover from the insurance company the amount of the judgment recovered by plaintiff against the Schroeder Hotel Company in Case No. 92 above, and for judgment for costs on appeal to this court in that case-H. R. Burling v. Schroeder Hotel Co., supra. On December 27, 1940, the circuit court for Milwaukee County, Charles L. Aarons presiding, granted plaintiff's motion for summary judgment for $10,664.97 damages and costs. Defendant Massachusetts Bonding and Insurance Company appeals from that judgment.Shaw, Muskat & Paulsen, of Milwaukee (Van B. Wake, of Milwaukee, of counsel), for appellants.

Affeldt & Lichtsinn and Suel O. Arnold, all of Milwaukee (Eldred Dede, of Milwaukee, of counsel), for respondent.

MARTIN, Justice.

The plaintiff, H. R. Burling, hereinafter referred to as the respondent, while a guest at the Schroeder Hotel, owned and operated by the Schroeder Hotel Company, on March 18, 1934, suffered an injury as the result of a fall on a stairway in the hotel. An action for damages was brought against the hotel company and, on the trial, a special verdict was rendered in his favor. On motions after verdict, the court changed one of the jury's findings and ordered judgment dismissing the action. From the judgment so entered, plaintiff appealed. This court reversed the judgment and remanded cause with directions to enter judgment for the plaintiff. See Burling v. Schroeder Hotel Co., 235 Wis. 403, 291 N. W. 810.

Prior to March 18, 1934, the appellant, Massachusetts Bonding and Insurance Company, hereinafter referred to as the insurance company, had issued to the hotel company a policy of liability insurance, which was in force and effect at the time respondent sustained his injuries. Among other provisions of the policy, the insurance company agreed to indemnify the assured against loss from the liability imposed by law upon the assured for damages on account of bodily injuries and/or death, accidently suffered or alleged to have been suffered, during the period of said policy, by any person or persons not in the employ of the assured and occurring within and upon the premises, on which respondent suffered his fall and injuries, in an amount exceeding the amount of the judgment recovered by respondent against the hotel company. By the terms of its policy, the insurance company agreed, among other things, to serve the hotel company, upon notice of any bodily injuries or death by investigation of such injuries or death; to defend, in the name and on behalf of the hotel company, suits brought on account of such claims; to pay, in addition to damages, all expenses incurred for investigation, negotiation or defense, all costs taxed against the hotel company in any legal proceedings defended by the insurance company and all interest accruing after entry of judgment on the part of such judgment for which the insurance company should be liable; and to pay for such immediate surgical relief as should be imperative at the time of the accident.

The policy further provided that the hotel company should not voluntarily assume any liability nor incur any expense except for such immediate surgical relief as should be imperative at the time of an accident, should not settle any claim without the written consent of the insurance company, except at the hotel company's own cost; nor should the hotel company interfere in any negotiation for settlement or in any legal proceeding, but should, whenever requested by the insurance company, aid in securing information and evidence and the attendance of witnesses, and should cooperate with the insurance company, except in a pecuniary way, in all matters which the insurance company might deem necessary in the settlement of any claim, the defense of any suit, or the prosecution of any appeal. The policy further provides. “Insolvency. Bankruptcy or insolvency of the assured shall not relieve the company of any of its obligations hereunder. If any person or his legal representatives shall obtain final judgment against the assured because of any such injuries, and execution thereon is returned unsatisfied by reason of bankruptcy, insolvency or any other cause, or if such judgment is not satisfied within thirty days after it is rendered, then such person or his legal representatives may proceed against the company to recover the amount of such judgment, either at law or in equity, but not exceeding the limit of this policy applicable thereto.”

The policy further provides: “Action against company. No action shall lie against the company to recover for any loss under this policy unless brought within two years after the amount of such loss is made certain either by judgment against the assured, after trial of the issue, or by agreement between the parties with the written consent of the company.”

It appears that on September 15, 1934, the hotel company filed a voluntary petition in the United States District Court for the Eastern District of Wisconsin for reorganization under Sec. 77B of Chapter 8 of the Acts of Congress, 11 U.S.C.A. § 207, relating to bankruptcy. In its petition, the hotel company alleged that it was unable to meet its debts as they matured, that it desired to affect a plan of reorganization under and pursuant to Sec. 77B of Chapter 8 of the Act of Congress relating to bankruptcy.

On May 24, 1935, respondent Burling filed a petition in the district court in which he asked leave of said court to commence an action against the hotel company to recover damages for the injuries sustained by him on account of the fall on the stairway above mentioned. In his petition to the court, respondent, among other things, alleged “that as petitioner is informed and believes said Schroeder Hotel Company was at said time insured against loss by reason of the injuries of any guest or frequenter of said hotel in the Massachusetts Bonding & Insurance Co.” The insurance company was not joined in or in any manner a party to the reorganization proceedings. On May 19, 1937, an order was entered by the district court in said reorganization proceedings, providing, among other things, as follows: “It is further ordered that H. R. Burling be granted leave to bring suit against the debtor herein in any court of law of which he may be advised for the liquidation of the claim heretofore filed herein, and that on the liquidation of the said claim, if the same should result in the entry of a final judgment in favor of claimant, the said debtor is hereby ordered to make and transfer to the said Burling securities of the amount to which the said Burling would have been entitled as a general creditor if the said claim had been liquidated prior to entry of this decree, and that the debtor be discharged of the claim of the said Burling except of the obligation hereby imposed to transfer to the said Burling securities in accordance with the plan of reorganization heretofore approved.”

On November 19, 1936, an order was entered in the district court confirming the report of the master on the plan of reorganization under sec. 77B. This order provided that general creditors should receive non-cumulative, non-voting preferred stock of the hotel company, and that upon the completion of the proceedings for reorganization, the title and ownership of all the...