Coleman v. State Farm Mut. Auto. Ins. Co.
| Decision Date | 06 September 1961 |
| Docket Number | No. 38963,No. 1,38963,1 |
| Citation | 104 Ga.App. 328,121 S.E.2d 833 |
| Parties | A. W. COLEMAN v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY |
| Court | Georgia Court of Appeals |
Syllabus by the Court
1. Where the petition alleges the defendant's settlement of a lawsuit with a tortfeasor which sought to recover damages for personal injuries to himself and property damage to his automobile, there is a sufficient allegation that the settlement included recovery for property damages to said automobile.
2. In an action by an insurer against an insured for breach of the loan receipt agreement by his refusal to repay the insurer to the extent of the money advanced him by the insurer, a copy of the insured's action against the tortfeasor, with whom he later settled, need not be attached to the petition, since the action is on the loan receipt, not on the insured's action
3. An insured cannot be permitted, after accepting money under a loan receipt, to breach the terms of the loan receipt by settling the claim with the tortfeasor, thus destroying the insurer's right of subrogation, and then escape completely free of liability under the loan receipt under the guise of having settled for personal injuries only.
The State Farm Mutual Automobile Insurance Co. brought an action for breach of contract against A. W. Coleman. The petition alleged in substance that the plaintiff had issued a certain policy of collision insurance covering defendant's automobile; that while the policy was in effect the defendant's automobile was damaged by a collision with a railroad engine or train owned and operated by the Southern Railway System; that as a result of said collision the defendant recovered from the plaintiff the sum of $1,070, in consideration for which the defendant executed, on November 2, 1959, a loan receipt in which he agreed that said sum was a loan repayable only to the extent of any net recovery he might make from any person or persons, corporation or corporations, on account of loss by collision to his property on or about October 14, 1959. As security for such repayment, defendant pledged to the plaintiff the said recovery and delivery to it of all documents necessary to show his interest in said property, and he agreed to enter and prosecute in his name suit against such person or persons, corporation or corporations, on account of said claim for said loss, with all due diligence, at the expense and under the exclusive direction and control of the plaintiff. The defendant covenanted in said loan receipt that he had made no settlement with anyone who might be responsible for said loss, and that any money paid him by any other participant in loss was held in trust pending instructions by the plaintiff. A copy of the loan receipt was attached as an exhibit to the petition.
The petition alleged that after the execution of said loan receipt by the defendant, the defendant filed a suit in the Superior Court of Floyd County against Southern Railway to recover for personal injury to himself and property damage to his said automobile; that plaintiff's attorneys notified defendant's attorney by letter dated July 18, 1960, that plaintiff had a claim under the loan receipt against any funds received by the defendant from the railway; that thereafter, on or about December 23, 1960, the defendant settled the lawsuit with Southern Railway, receiving the gross sum of $5,000, resulting in a net recovery of $4,000 after payment of attorney's fees; that as a result of said settlement, the defendant dismissed the lawsuit with prejudice; that the automobile was sold by the plaintiff for junk for $172, which sum was credited to the $1,070 originally due under the loan receipt, leaving a balance due to the plaintiff of $898, plus interest and costs, plaintiff's demand for which was refused by the defendant.
The defendant demurred on the ground that there was no allegation in the petition showing that the defendant had included any claim of loss or damage to the automobile in the settlement with...
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