Crook v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 14 January 1960
• Docket Number: No. 17604,17604
• Citation: 112 S.E.2d 241,235 S.C. 452
• Parties: Edward C. CROOK, Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.
• Court: South Carolina Supreme Court

Page 241

112 S.E.2d 241

235 S.C. 452

Edward C. CROOK, Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

No. 17604.

Supreme Court of South Carolina.

Jan. 14, 1960.

Butler & Chapman, Spartanburg, for appellant.

Benjamin A. Bolt, Greenville, Sam R. Watt, Chester D. Ward, Jr., Spartanburg, for respondent.

MOSS, Justice.

The respondent Edward C. Crook, did, on April 20, 1955, in the Court of Common Pleas for Spartanburg County, South Carolina, in an action against W. Frank Smith, as administrator of the estate of Otis L. Smith, deceased, obtain a judgment in the amount of $5,000 as damages for personal injuries sustained as a result of the negligent operation of an automobile owned and driven by Otis L. Smith, now deceased. In this action a motion for a new trial was made and refused and the judgment so obtained became final because no appeal was taken therefrom.

It appears that on December 15, 1953, that an automobile driven by the respondent and one owned and driven by Otis L. Smith were involved in an automobile collision near Woodruff, South Carolina. The respondent and Smith were severely injured. The respondent instituted the action above referred to against Otis L. Smith for damages for the injuries alleged to have been sustained by him. Otis L. Smith, who was the defendant in said action, denied liability and interposed a counterclaim against the respondent for the injuries sustained by him. The said Otis L. Smith employed an attorney to represent him in connection with the counterclaim. It should be stated that during the pendency of the action that Otis L. Smith died, and W. Frank Smith was made a party defendant as the administrator of his estate.

The record shows that State Farm Mutual Automobile Insurance Company, the appellant herein, did, on September 19, 1953, issue its liability insurance policy to Otis L. Smith covering the automobile which he was driving at the time of the collision with the respondent. By the terms of the aforesaid policy the appellant agreed to pay on behalf of the said Otis L. Smith all sums which the insured should become legally obligated to pay because of bodily injuries to others arising out of the use and operation of the insured automobile; but not exceeding $5,000 as to any one person.

The liability policy issued by the appellant to Otis L. Smith had the usual provisions for giving written notice of an accident, containing particulars sufficient to identify the insured, information as to the time, place and circumstances of the accident, the names and addresses of the injured and of available witnesses; and provided that no action should lie against the company unless, as a condition precedent, the insured had fully complied with all the terms of the policy. The policy also provided, with reference to the assistance and cooperation of the insured, the following:

'The insured shall cooperate with the company and, upon the company's request, shall attend hearings and trials and shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of suits. The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for such immediate medical and surgical relief to others as shall be imperative at the time of the accident.'

The policy also provided that it does not apply under the coverages for liability for personal injuries and damage for 'liability assumed by the insured under any contract or agreement.'

On December 29, 1953, Otis L. Smith, the insured, filled out and furnished to the appellant his signed Automobile Claim Report wherein he described the accident as follows:

'I was traveling North on Highway 101 app. 10 mi. North of Woodruff, S. C., and approaching a slight curve and rise on curve. A Pontiac driven by a Mr. Cook ran into me hitting my left front side with his right front side.'

The form upon which the insured made the foregoing report shows C. R. Townsend, a Highway Patrolman, who later testified, as a witness.

Thereafter, the insured was under the professional care of Dr. George C. Albright, a dentist of Greenville, South Carolina, and in connection with filing an insurance claim, he filled out in his own handwriting the following account of the accident:

'I was driving along at a speed of approximately 55-60 M.P.H., when the other car appeared coming over this slight hill toward me on my side of the road. I swerved to the right to avoid collision but the right front of his car struck the left front of mine, on the right side of the road.'

It appears that a copy of the last mentioned report was furnished to the appellant in connection with the preparation of the answer and the counterclaim of the said Otis L. Smith.

The report of C. R. Townsend, the Highway Patrolman above referred to, shows that he had not been able to talk to the driver of either of the cars but that 'the two cars collided head on in the middle of the highway.' The evidence shows that the report of the highway patrolman was in the possession of the appellant, in its office in Jacksonville, Florida, and was obtained from that office by the attorney for the appellant for use in connection with the trial of the injury case.

The record shows that Otis L. Smith contracted leukemia and was advised by his physicians that he had only a few weeks to live. After he had this information, and on October 12, 1954, he wrote his personal attorney a letter, stating that he had the 'dread disease of leukemia' and that 'the doctors only give me a few weeks, at the most, to live, since medical science knows no cure for the disease.' He then explained how the collision between his car and that of the respondent occurred. He said:

'I was on my way to veterans school at Reidsville on the evening of Dec. 15, 1953 after working 10 hrs. in Riverdale Mills at Enoree, S. C. that day. Since I had worked 12 hrs. the day before, with little sleep that night, my body was almost in a state of fatigue. So while approaching the spot where the accident happened I dozed momentarily at the wheel. The moment I opened my eyes I saw I was across the white line and instinctively swerved back toward my side of the road. At this very instant I became aware of another car approaching. I was making approximately 60 miles per hour and I am sure the other car was going equally as fast. Due to the fact that the scene of the accident is completely blind from both directions at a very short distance, I do not know whether the other car was approaching across the white line to miss me or for other reasons. But I do know, that at the combined speeds of both cars, at the time I became aware of the other car, there was no possible way to avoid a collision.

'Due to the fact that I was on the wrong side of the road momentarily and in spite of the injuries and losses I sustained, I feel that the accident was my fault and I want you to work for a settlement on that basis. I don't want any money and I know this will greatly cut your expected commission on the case, but even though I don't have very much I will see that you get your fee for your services.'

The contents of the foregoing letter were communicated to the appellant. Thereafter, Otis L. Smith gave to the representative of the appellant an affidavit confirming the statement made by him to his attorney in the letter from which we have quoted. Thereafter, the appellant defended the injury action in behalf of Otis L. Smith and his estate under a non-waiver agreement. When the injury case was tried, the attorney for the estate of Otis L. Smith withdrew and had dimissed the counterclaim filed by the insured. The case proceeded to trial and resulted in the judgment heretofore stated.

The present action was instituted by the respondent to recover from the appellant the sum of $5,000, being the amount of the aforesaid judgment, together with interest and costs. It was alleged in the complaint that by the terms of the liability insurance contract, the appellant agreed that it would pay any judgment, not exceeding the sum of $5,000, to any person injured by reason of the negligent operation of the automobile of Otis L. Smith. It was further alleged that the insurance policy provided that the judgment creditor would have the right to institute this action against the appellant to collect such judgment. It was also alleged that the respondent had demanded payment of the judgment and such had been refused. The appellant, by way of answer to the complaint, admitted that it did issue to Otis L. Smith a liability insurance policy with a limit as to any one person in the amount of $5,000, and that subject to the conditions, terms and limitations contained in said policy it was in full force and effect at the time of the collision in which the respondent sustained injuries. The answer also admitted that the respondent obtained the aforesaid judgment against the insured but denied liability on the ground that the insured had failed to comply with the terms of the policy. The appellant further alleged that the insured, following the accident with the respondent, represented to the appellant as to how the accident between the insured and the respondent had occurred, and that he later changed such statement with respect to the facts, thereby misleading and preventing the appellant from exercising its right to negotiate and settle respondent's claim. It was further alleged that the insured violated the contract of insurance by assuming liability to the respondent. In brief, the appellant alleges that the insured violated the terms and provisions of the liability insurance policy by his misstatements as to the facts concerning the cause and circumstances of the accident, by admitting responsibility therefor, and, in effect, assuming obligation therefor, any by his failure to cooperate with the insurer in the defense of the...