Clark v. W. R. Bonsal & Co

• Decision Date: 27 November 1911
• Citation: 157 N.C. 270,72 S.E. 954
• Court: North Carolina Supreme Court
• Parties: CLARK v. W. R. BONSAL & CO. et al.

72 S.E. 954

157 N.C. 270

CLARK

v.W. R. BONSAL & CO. et al.

Supreme Court of North Carolina.

Nov. 27, 1911.

1. Insurance (§ 435^*)—Accident Insurance —Accrual of Action.

If the indemnity provided in an employer's accident insurance policy is against loss or damages, an action will not lie by insured, where he has not suffered damage by payment of some part of an employees claim; but if the indemnity is against liability by the employer a right of action accrues to him when an employ^ is injured, or, in some cases, when the amount and legality of the claim has been established by a valid judgment, if so provided by the policy.

[Ed. Note.—For other cases, see Insurance. Cent. Dig. § 1144; Dec. Dig. § 435.*]

2. Insurance (§ 624*)—Employer's Accident Insurance—Persons Entitled to Sue.

Unless an employer's accident insurance policy expressly provides that it is for the benefit of injured employes, and that amounts recovered should be paid to them, an injured employé may not, in the first instance, sue on the policy.

[Ed. Note.—For other cases, see Insurance, Dec. Dig. § 624.*]

3. Parties (fj 25*)—Defendants.

That a judgment may determine points of law adverse to a person is not sufficient ground for making him a defendant; it being necessary as a rule that all defendants have a responsible interest.

[Ed. Note.—For other cases, see Parties, Cent. Dig. §§ 36-40; Dec. Dig. § 25.*]

Appeal from Superior Court, Anson County; Justice, Judge.

Action by W. H. Clark, administrator, against W. R. Bonsai & Co. and the Maryland Casualty Company. From a judgment dismissing the action as against the Casualty Company, plaintiff! appeals. Affirmed.

Civil action to recover damages for death of plaintiff's intestate, an employe of the Bonsai Company, caused by alleged negligence of the employer, and in which the Maryland Casualty Company was joined as an original party defendant, heard on demurrer for misjoinder of parties before his honor, M. H. Justice, at April term, 1911, of the superior court of Anson county. The complaint sets forth a cause of action against the Bonsai Company for negligently causing the death of intestate in the course of his employment with that company, and alleges that Bonsai & Co. held a contract of indemnity insurance with the Casualty Company, and makes the contract a part of the complaint. The complaint contained no allegations of insolvency on the part of the Bonsai Company; nor any facts ultra, having a tendency to give the court jurisdiction, in application or distribution of an insolvent's estate; nor was there allegation of assignment to plaintiff by the insured company. The right of joinder is made to rest on the terms of the policy and the stipulations therein, relevant to the questions presented, are as follows: "The Casualty Co. guarantees the assured against loss fromthe liability imposed by law upon the assured for damages on account of bodily injuries, including death resulting therefrom, accidently suffered by any employs or official, or employes and officials, of the assured while the said employed or officials are engaged in the occupations and at the places mentioned in the schedule below; provided such bodily injuries or death are suffered as a result of accidents occurring within the period of twelve (12) months, beginning on the first day of December, 1908, at noon, and ending on the first day of December, 1909, at noon, standard time, at the place where the policy has been countersigned. * * * The company's liability for loss from an accident resulting in bodily injuries, including death resulting therefrom, to one person, is limited to five thousand dollars ($5,000), and subject to the same limit for each person, the company's total liability for loss from an accident resulting in bodily injuries, including death resulting therefrom, to more than one person, is limited to ten thousand dollars ($10,000). In addition to these limits, however, the company will, at its own cost (court costs being considered part thereof), investigate all accidents and defend all suits, even if groundless, of which notices are given to it as hereinafter required, unless the company shall elect to settle the same. * * * Immediate notice of any accident and of any suit resulting therefrom, with every summons or other process, must be forwarded to the home office of the company or its authorized representative. The company is not responsible for any settlements made or any expenses incurred by the assured, unless such settlements or expenditures are first specifically authorized in writing by the company, except that the assured may provide at the time of the accident, at the expense of the company, such immediate surgical relief as is imperative. In the event of an accident causing injuries to more than one person, the company may terminate its liability under this policy on account of such accident, by payment to the assured of its total limit of liability above named. * * * This policy may be canceled by either the company or the assured at any time by written notice to the other, stating when the cancellation shall be effective." The court below sustained the demurrer and dismissed the action as to the Casualty Company, and plaintiff, having duly excepted, appealed.

Lockhart & Dunlap and Robinson & Caudle, for appellant.

McLean, Varser & McLean and ilurray Allen, for appellee.

HOKE, J. (after stating the facts as above). [1, 2] In construing contracts of this character, the courts have generally held that if the indemnity is clearly one against loss or damages no action will lie in favor of the insured till some damage has been sustained, either by payment of the whole or some part of an employe's claim; but if the stipulation is in effect one indemnifying against liability a right of action accrues when the injury occurs, or, in some instances, when amount and rightfulness of the claim has been established by judgment of some court having jurisdiction, this according to the terms of the policy, but, unless the contract expressly provides that it is taken out for the benefit of the injured employes, and the payment of recoveries by them, none of the cases hold that an injured employs may, in the first instance, proceed directly against the insurance company. In all of them, so far as examined, a right of action arising on the policy is treated and dealt with as an asset of the insured employer, and, in the absence of an assignment from him, the employé cannot appropriate it to his claim, except by attachment or bill in the nature of an equitable fi. fa., or some action, in the nature of final process, incident to bankruptcy or insolvency. Certainly this position is supported by the great weight of authority. Connolly v. Bolster, 1S7 Mass. 200, 72 N. E. 981; Bain v. Atkins, 181 Mass. 240, 63 N. E. 414, 57 L. R. A. 791, 92 Am. St. Rep. 411; Embler v. Hartford Boiler Co., 158 N. Y. 431, 53 N. E. 212, 44 L. R. A. 512; Cushman v. Fuel Co., 122 Iowa, 656, 98 N. W. 509; Hawkins v. Mc Calla; 95 Ga. 192, 22 S. E. 141; Carter v. Insurance Co., 76 Kan. 275, 91 Pac. 178, 11 L. R. A. (N. S.) 1155; Finley v. Casualty Co., 113 Tenn. 592, 83 S. W. 2; Kinnan v. Casualty Co., 107 111. App. 406; Vance on Insurance, p. 608; 15 Cyc. p. 1038; 11 A. & E. (2d Ed.) p. 16. The doctrine, as announced and sustained in these citations, is very well epitomized in Vance on Insurance as follows: "The fund, payable under a liability policy, is not subject to any trust in favor of the person whose right to damages for personal injury gave rise to the insurer's...