Commercial Union Assur. Co., Limited, of London v. Chattahoochee Lumber Co.

• Decision Date: 07 February 1908
• Parties: COMMERCIAL UNION ASSUR. CO., LIMITED, OF LONDON, v. CHATTAHOOCHEE LUMBER CO.
• Court: Georgia Supreme Court

60 S.E. 554

130 Ga. 191

COMMERCIAL UNION ASSUR. CO., LIMITED, OF LONDON, v. CHATTAHOOCHEE LUMBER CO.

Supreme Court of Georgia

February 7, 1908

On Rehearing, February 26, 1908.

Syllabus by the Court.

An attorney employed in two different suits against different parties, but involving the same issues, and the interest of his clients being of the same character in each, may stipulate that the trial of one shall determine the issues in the other.

[Ed Note.-For cases in point, see Cent. Dig. vol. 5, Attorney and Client, §§ 155-171.]

Under the facts of this case, and in view of the agreement made which specified that one suit should abide the result of the other, and that the final termination of one should be the final termination of the other, there was no error in holding, after a final judgment in the first case finding in favor of the plaintiff for the total amount of the insurance policy there involved (allowing a small admitted credit for a premium returned), upon the trial of the suit on the policy involved in the second case (which was in all respects like the other policy save as to its amount), that a verdict and judgment should be entered for the full amount thereof, less the small deduction admitted to be proper on account of a return premium.

[Ed Note.-For cases in point, see Cent. Dig. vol. 44 Stipulations, §§ 29, 46.]

Where, after judgment against the first company for the full amount of its policy (less a small credit for a returned premium), on the trial of the suit based on the second policy, it was sought by motion to have the agreement to be so construed or opened as not to prevent proof that some of the property insured was not destroyed, and the question of knowledge of the facts on the part of the defendants or their agents or attorneys, or opportunity for knowledge thereof, prior to the trial of the first case, was involved a letter from the insured to the person who was agent of both companies, though addressed to him as agent only of the company against whom the judgment had been obtained, suggesting that adjusters be sent to the scene of the fire, and his reply stating that "the policies" had been canceled before the fire, and that "you had no insurance with our office at the time of the fire," and also a letter from the attorneys representing the defendant in the first trial, who were also the attorneys for the defendant in the second trial, denying the liability on the first policy, but suggesting certain irregularities in the proofs of loss, though not admitting them to be valid, were admissible in evidence along with the proofs of loss made to each company under its policy, which were similar in character.

Nor, under the facts disclosed, was there error in holding that the defendant in the second case could not reduce the amount of its liability by showing that some of the property insured had not been destroyed; the suit in each case claiming the full amount of the policy, and the same defenses being applicable to both cases.

Where, after the evidence closed, the attorney for the defendant stated that he desired to move for a direction of a verdict, and thereupon the attorney for the plaintiff stated that he also desired to move for the direction of a verdict, and, instead of hearing the motions separately and giving to each movant the right to open and conclude the argument on his own motion, the court heard both together and allowed counsel for the plaintiff to open and conclude, even if this be erroneous, it will not require a reversal where there was no error in the direction given.

Error from Superior Court, Decatur County; W. N. Spence, Judge.

Action by the Chattahoochee Lumber Company against the Commercial Union Assurance Company, Limited, of London. Judgment for plaintiff, and defendant brings error. Affirmed.

King, Spalding & Little, for plaintiff in error.

Donalson & Donalson and Adams & Adams, for defendant in error.

LUMPKIN J.

The Chattahoochee Lumber Company sued the Commercial Union Assurance Company, Limited, of London, on a fire insurance policy. In addition to this policy, there was another issued by the Home Insurance Company of New York, covering the same property, on which suit was likewise brought. The suit against the Home Insurance Company was first tried. It was agreed in writing in open court that the present case should "abide the result" of the other, and that, "whatever may be the final result in the termination of the latter suit, the same result is agreed to be the final termination of the suit against the Commercial Union Assurance Company." A judgment was recovered against the Home Insurance Company for the full amount of its policy, crediting the defendant with a premium which had been returned to the plaintiff. The case was brought to the Supreme Court, and the judgment affirmed (Home Ins. Co. v. Chattahoochee Lumber Co., 126 Ga. 334, 55 S.E. 11), and this was "the final termination" of that suit. When the case against the Commercial Union Assurance Company came on for trial, it contended that it was only bound by the former judgment to the extent of determining that there was a liability on its policy, and that an effort which it had made to cancel the policy had not proved effectual. It conceded a liability, but asserted that the insurance was not in gross upon the entire property, but to the aggregate extent of $5,000 pro rata upon various items of property separately, and that some of the items were not destroyed by fire. Therefore it claimed that it was not liable for the full amount of its policy, but only for a pro rata amount determined by the ratio of the value of the items which were destroyed to the value of the whole property insured. It also filed a motion, alleging that, when its attorneys made the agreement to abide the result in the other case, they were under the belief that there was no dispute as to the loss being total, and that the only issue was the question whether the policies had been canceled before the fire; that since the decision of the Supreme Court the attorneys had learned that some of the items were not destroyed by fire; and it was asked that the agreement should not be held to prevent the defendant from showing what was not destroyed, and having the amount of the judgment determined accordingly. This was resisted. The plaintiff had sued for the full amount of the policy. Its counsel still contend that it was entitled to recover in full, and that the prorating clause had relation to other insurance, or, at least, was ambiguous, and that this was a matter necessarily controlled by the former judgment on a similar policy. Evidence was introduced. Both sides moved the direction of a verdict. The court directed one for the plaintiff for the full amount of the policy, less a credit apparently for a premium which the plaintiff conceded had been returned. The defendant excepted.

1. The rule is generally recognized that an attorney at law has implied authority to do anything necessarily incident to the discharge of the purposes for which he was retained. He may make any agreement or stipulation which appears, in the progress of the case, to be necessary or expedient for the advancement of his client's interest, except where it is held that he cannot compromise his client's case or surrender his substantial rights. "Thus an attorney employed in several different suits by or against different parties, but all involving the same issues, and the interest of his client being of the same character in all, may stipulate that the trial of one shall determine the issues in all the others." 3 Am. & Eng. Enc. Law (2d Ed.) 354; Ohlquest v. Farwell & Co., 71 Iowa 231, 32 N.W. 277; Scarritt Furniture Co. v. Moser & Co., 48 Mo.App 543. Civ. Code 1895, § 4417, declares that attorneys "have authority to bind their clients in any action or proceeding, by any agreement in relation to the cause, made in writing." It is not denied that the agreement which was made by the attorneys was binding on their clients; but it is contended that it did not cover or preclude the defense now sought to be set up, or, if it did, that it was made under a mistaken belief by the attorneys for defendant that the entire property insured was totally destroyed, when, in fact, some of it was not burned. There were two policies of insurance issued by different companies. Each of them described the property insured as consisting of different items, and were identical in all respects, except as to the amount of each, one being for $20,000 and the other for $5,000. The policy now under consideration provided that it was understood that it "covers pro rata on each of the above items aggregating $5,000." The policy issued by the other company contained a like clause. The agreement made in open court, before the first case was tried, provided that the present suit should "abide the result of" that about to be tried, and that whatever might be "the final termination" of the suit first tried "the same result" should be "the final termination" of the other suit. The final termination of the first suit was a judgment for the full amount of the policy, less a small reduction on account of a certain premium admitted to have been returned to the insured, when an effort was made to cancel both policies. How shall the same result be made the final termination of this case, except by a judgment for the full amount of the policy, less the deduction admitted to be proper on account of the amount of premium returned by the defendant in the same effort to make a cancellation? To hold that the present defendant was only concluded as to the question of whether there was a cancellation or whether the policy was in force, leaving open all other defenses which might have been made...