Carter v. The Aetna Life Insurance Company

• Decision Date: 05 July 1907
• Docket Number: 15,120
• Citation: 91 P. 178,76 Kan. 275
• Parties: C. W. CARTER v. THE AETNA LIFE INSURANCE COMPANY
• Court: Kansas Supreme Court

91 P. 178

76 Kan. 275

C. W. CARTER v. THE AETNA LIFE INSURANCE COMPANY

No. 15,120

Supreme Court of Kansas

July 5, 1907

Decided July, 1907.

Error from Sedgwick district court; THOMAS C. WILSON, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. INDEMNITY INSURANCE--Liability to Injured Employees-- Right of Action--Parties. A policy insuring an employer against loss from liability for injuries to employees of the assured which contains a stipulation that "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 within sixty days from the date of such judgment, and after trial of the issue," is a contract of indemnity for the benefit of the assured, and there is no right of action thereon against the insurance company until the assured sustains a loss by the payment of a liability.

2. INDEMNITY INSURANCE--Employee Not Entitled to Sue the Insurer on a Judgment against the Insured. The policy provided that if an action was brought against the assured by an injured employee the insurance company might defend the action in behalf of the assured, and in an action brought by an employee to recover damages in which a judgment was rendered against the assured the insurance company assumed to, and did, make a defense against the employee's claim. Held, that the employee could not maintain an action upon the judgment against the insurance company, and the fact that the insurance company did make a defense against the employee's claim did not estop it from denying liability to the employee.

Adams & Adams, M. C. Freerks, and George W. Freerks, for plaintiff in error.

E. G Anderson, and Stanley, Vermilion & Evans, for defendant in error.

OPINION

JOHNSTON, C. J.

The principal question involved in this litigation is the meaning and effect of an employer's liability policy. It arises on a demurrer to the plaintiff's petition, in which it is averred that the AEtna Life Insurance Company issued a policy to the Wichita Bridge Company agreeing to indemnify the bridge company "against loss from common-law or statutory liability for damages on account of bodily injuries, fatal or non-fatal, accidentally suffered within the period of this policy by any employee or employees of the assured. " The policy contained stipulations that in case of accidents to employees the assured should notify the insurance company, and if an action for damages was brought against the assured for injuries to employees the summons and other processes served upon it should be sent at once to the insurance company, that company to defend against the proceeding in the name of the assured. It was also provided that "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 within sixty days from the date of such judgment, and after trial of the issue."

While the policy was in force C. W. Carter, an employee of the bridge company, was injured, and within a few days he brought an action against that company to recover for the negligent injury. The insurance company was notified of the injury, and also of the commencement of the action, and it at once assumed control of the defense against the claim and its attorneys tried the case in behalf of the bridge company, the result being a judgment in favor of Carter against the bridge company for $ 1000. While that action was pending, and before judgment was rendered, the bridge company was adjudged a bankrupt and its assets were seized and administered in that proceeding, with the result that the bridge company is now insolvent and without assets of any kind. Carter did not participate in the bankruptcy proceedings, and he alleges that the answer and defense made by the insurance company prevented him from securing payment of his claim and sharing in the distribution of that estate. He therefore prays that the insurance company be adjudged to pay his judgment against the bridge company and the further sum of $ 350 as attorney's fees expended in the prosecution of the action. The trial court rightly held that no cause of action is stated in his...