Campbell v. Maryland Casualty Company of Baltimore, Maryland
| Decision Date | 29 March 1912 |
| Docket Number | 7,374 |
| Citation | 97 N.E. 1026,52 Ind.App. 228 |
| Parties | CAMPBELL, RECEIVER, v. MARYLAND CASUALTY COMPANY OF BALTIMORE, MARYLAND |
| Court | Indiana Appellate Court |
Rehearing denied June 20, 1912. Transfer denied January 23 1913.
From Morgan Circuit Court; Joseph W. Williams, Judge.
Action by Joseph H. Campbell, receiver of the Clear Creek Stone Company, against the Maryland Casualty Company of Baltimore Maryland. From a judgment for defendant, the plaintiff appeals.
Reversed.
J. E. Henley and R. H. East, for appellant.
Duncan & Batman and Miller, Shirley & Miller, for appellee.
ADAMS, J.
Appellant brought this action to recover on an employer's liability policy of insurance issued by appellee to the Consolidated Stone Company and assigned to the Clear Creek Stone Company, of which appellant is receiver. There was a trial resulting in a judgment for appellee, from which this appeal is taken.
The Clear Creek Stone Company at the time of the assignment of said policy was a corporation engaged in operating a stone-quarry, and, during the time such policy was in force, employed a number of men, among whom was Frank Carmichael. While so employed and during the life of such policy Frank Carmichael received an injury to his person, for which he brought suit against the Clear Creek Stone Company, and recovered a judgment in the sum of $ 2,500, which was appealed, and finally affirmed by the court of last resort. Before said judgment was affirmed the Clear Creek Stone Company became insolvent and passed into the hands of a receiver. All the assets of said company were taken under a foreclosure of mortgage, and no property or other assets of said company ever came into the hands of the receiver. The receiver brought this action to recover on the policy issued by appellee for the amount of the Carmichael judgment and interest. The complaint avers that the receiver under the order of the court borrowed money and paid the Carmichael judgment before the commencement of the action.
The third paragraph of answer admits the execution of the policy sued on and its assignment to the Clear Creek Stone Company with the consent of appellee, but it avers that, long before the Carmichael judgment was affirmed the Clear Creek Stone Company became insolvent, and that it possessed no assets from which its receiver could pay such judgment; that such judgment was not paid in good faith by the receiver or by the Clear Creek Stone Company, but that the money with which the pretended payment was made was furnished and procured by and through the agents and attorneys of Carmichael for the purpose of being paid to the clerk of the Brown Circuit Court, and that said clerk was thereby induced to enter a formal satisfaction of said judgment, after which the money was turned over to Carmichael's attorneys, who receipted to the clerk therefor, and returned said money to the person who had advanced it to the receiver. A demurrer for want of sufficient facts was filed to this paragraph of answer, which demurrer was overruled, and this ruling is assigned as error.
The facts stated in this paragraph of answer show that the Carmichael judgment was not paid in good faith before the commencement of this action. If it is necessary to a recovery by plaintiff that he should allege and prove that the judgment on which he bases his claim or some part of it has been paid, then the facts alleged in this paragraph of answer could have been properly proved under the general denial, and a ruling on demurrer, if wrong, would be harmless. Goode v. Elwood Lodge, etc. (1903), 160 Ind. 251, 66 N.E. 742; State v. Hindman (1903), 159 Ind. 586, 65 N.E. 911.
If the policy sued on is a contract to indemnify against loss, it is necessary to show a damage before there can be a recovery. Carter v. Aetna Life Ins. Co. (1907), 76 Kan. 275, 91 P. 178, 11 L. R. A. (N. S.) 1151; Allen v. Aetna Life Ins. Co. (1906), 145 F. 881, 76 C. C. A. 265, 7 L. R. A. (N. S.) 958; Connolly v. Bolster (1905), 187 Mass. 266, 72 N.E. 981. On the other hand, if the policy sued on is a contract to protect the assured against liability merely, an action may be brought and a recovery had as soon as the liability is legally imposed, regardless of the question as to whether any actual loss or damage has been suffered. Fenton v. Fidelity, etc., Co. (1899), 36 Or. 283, 56 P. 1096, 48 L. R. A. 770; Anoka Lumber Co. v. Fidelity, etc., Co. (1895), 63 Minn. 286, 65 N.W. 353, 30 L. R. A. 689.
The distinction observed between contracts to indemnify against loss and contracts to protect against liability is recognized by practically all the cases cited. The decision of this case must depend on the meaning of the policy sued on. If this policy is to be construed as a contract to indemnify the assured against loss, then the judgment of the trial court is correct; but if it is to be construed as a contract to protect against liability, then the judgment is erroneous and must be reversed. The contract must speak for itself. In the body of the policy appellee agreed to indemnify the assured for the period of twelve months against loss from common-law or statutory liability for damages on account of bodily injuries, fatal or non-fatal, accidentally suffered by an employe or employes of the assured while on duty, caused by the negligence of the assured. On the reverse side of the policy is printed a number of conditions, one of which is as follows: No. 8. "No action shall lie against the company as respects any loss under this policy unless it shall be brought by the assured himself to reimburse him for loss actually sustained and paid by him in satisfaction of a judgment after trial of the issue. * * *."
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