Charles v. The St. Paul Mercury Indemnity Company

• Decision Date: 10 January 1931
• Docket Number: 29,603
• Parties: CHARLES, BRANDON, Appellee, v. THE ST. PAUL MERCURY INDEMNITY COMPANY et al., Appellants
• Court: Kansas Supreme Court

294 P. 881

132 Kan. 68

CHARLES, BRANDON, Appellee, v. THE ST. PAUL MERCURY INDEMNITY COMPANY et al., Appellants

No. 29,603

Supreme Court of Kansas

January 10, 1931

Decided January, 1931.

Appeal from Butler district court; GEORGE J. BENSON, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. LIABILITY INSURANCE--Nature of Policy as Liability or Indemnity Contract. The automobile accident policy involved insuring against damages for bodily injuries to third persons caused in the operation of the automobile by the insured, the insurer reserving the right to defend against the claim of damages in the name of the insured, and to negotiate settlements without interference by the insured, is held to be a contract of liability rather than of indemnity payable only when the damages actually sustained have been paid by the insured, and the right to recover for the injuries is complete when the liability attaches, following Blanton v Cotton Mills Co., 103 Kan. 118, 172 P. 987.

2. SAME--Rights of Injured Person as Against Insurer. After the injured party had recovered a judgment against the insured, who was insolvent, the plaintiff had a right to proceed against the insurer in a garnishment proceeding to recover from it the adjudged liability.

Richard E. Bird, of Wichita, for the appellants.

A. M. Ebright, A. B. Burch, J. B. Patterson and P. K. Smith, all of Wichita, for the appellee.

OPINION

JOHNSTON, C. J.:

In an action brought by Charles Brandon against George Woods for the recovery of damages for negligently running into and seriously injuring him, a trial resulted in a judgment in favor of Brandon for $ 2,500. Executions were returned unsatisfied and garnishment process was issued against the St. Paul Mercury Indemnity Company, which had insured Woods against liability for injuries caused in operating his automobile, and that company answered that it was not indebted to Woods and did not have possession or control of any property, effects or credits belonging to Woods. Issue was taken on the answer of the garnishee and a jury was called to try the issues of fact. A demurrer to the evidence in behalf of Brandon was overruled and after testimony was produced by the garnishee the court ruled that there was no question of fact to be decided, discharged the jury and rendered judgment for $ 2,691. The garnishee has appealed.

It is contended by the indemnity company that it is not directly liable to Brandon, the injured party; that the latter in fact took the place of Woods, the insured, and that Woods had not complied with the conditions of the policy as to giving prompt notice of the accident to the company, and also the provision requiring Woods to cooperate with the company in any suit brought by the injured party. These failures, it is claimed, prevent any liability attaching to the company and necessarily created no liability of the company to Brandon who stands in the shoes of Woods. It appears that an automobile policy of insurance was issued by the company to Woods and that shortly afterwards the accident occurred in which Woods ran his automobile over Brandon, inflicting the injuries upon which a recovery was based. Woods advised the agent who issued the policy of the accident, and the agent told him he would notify the company, and that Woods would be expected to cooperate with the company in the defense against the claim and would render assistance in the matter to the company. Afterwards one Stone, the representative and adjuster of the company, investigated the result of the collision and the liability for the injuries sustained. Woods was asked by him why he had not reported the accident before and he replied that the injury did not amount to anything and the agent said, "We have been sued--you have been sued," and told Woods, "You must help us get the witnesses," whereupon Woods gave the agent the name of one witness. The attorney for Woods was also the attorney for the indemnity company in resistance of the claim. Before the trial of the case brought against him Woods became insolvent and disappeared. Thereafter he took no part in the trial, and his whereabouts were unknown to any of the parties. His attorney, who acted for the indemnity company, procured a number of continuances of the case brought by Brandon, and when it was finally tried a judgment in favor of Brandon was rendered. Executions issued were returned unsatisfied and thereupon Brandon brought the garnishment proceeding against the indemnity company. Several...