Downing v. Home Indemnity Co. of New York

• Decision Date: 19 February 1934
• Docket Number: 31012
• Citation: 152 So. 841,169 Miss. 13
• Court: Mississippi Supreme Court
• Parties: DOWNING v. HOME INDEMNITY CO. OF NEW YORK

152 So. 841

169 Miss. 13

DOWNING v. HOME INDEMNITY CO. OF NEW YORK

No. 31012

Supreme Court of Mississippi

February 19, 1934

INSURANCE.

Insurer held not liable to injured employee under insolvent employer's policy for protection of employees, which inured to benefit of employee, where employer and employee failed to give notice of injury and claim as required by policy.

Division B

Suggestion Of Error Overruled March 5, 1934

APPEAL from circuit court of Hinds county, HON. W. H. POTTER, Judge.

Action by M. D. Downing against the Home Indemnity Company of New York. Judgment for defendant, and plaintiff appeals. Affirmed.

Affirmed.

Broom & Shipman, of Jackson, for appellant.

We respectfully submit that an inspection of the declaration shows the stating of a good cause of action thereby. If, for any cause, the defendant named therein desired to raise the question of the judgment against the assured to bind it demurrer most certainly is not the proper manner by which the question should have been raised.

Insurance Co. v. Breland, 117 Miss. 479, 78 So. 362; Hartford v. Graves, 136 So. 620; 49 C. J. 429; Board v. Railroad, 71. Miss. 500, 14 So. 445; Hastings-Stout Co. v. J. L. Walker Co., 139 So. 622; Tapping v. McIntosh, 140 So. 773; N. J. Fid. & P. G. Ins. Co. v. Love, 43 F.2d 82; Clements v. Pfd. Ace. Ins. Co., 41 F.2d 470; Lorando v. Gethro, 228 Mass. 181; Coleman v. New Ams. Cas. Co., 247 N.Y. 271; Kruger v. California Highway Indemnity Exchange, 201 Cal. 672, 258 P. 602, 275 U.S. 568, 72 L.Ed. 430; 270 P. 706; 280 P. 216; 280 P. 558; 297 P. 111.

Where a policy is for the benefit of a third person who suffers loss, or injury, as described in the policy, the failure of the insured to give notice of the accident and of the pendency of an action against the insured by the injured person, as provided for in the policy, does not prevent such injured person from bringing action on the policy.

36 C. J. 1101, par. 79; Gillard v. Mfgrs. Ins. Co., 107 A. 446; 36 C. J. 1102, par. 80; Harndon v. Sou. Surety Co., 229 S.W. 293, 206 Mo.App. 377; 36 C. J. 1130, par. 130; 36 C. J. 1132, par. 132; Metro. Cas. Ins. Co. v. Albriton, 214 Ky. 16, 282 S.W. 187; New York Ind. Co. v. Ewen, 298 S.W. 182; Vance v. Burke, 276 Mass. 394; Wareki v. U. S. F. & G. Co., 170 N.E. 49; Ott v. American Fidelity & Cas. Co., 159 S.E. (S. C.) 635; Edwards v. Fidelity & Cas. Co., 11 La. App. 176, 123 So. 162; Curtis v. Michaelson, 206 Iowa 111.

The failure of assured to notify liability insurer of the accident, as required by the policy, does not deprive injured person of right of action "within the terms and limitations of the policy" against the insurer.

Edwards v. Fid. & Cas. Co. of N. Y., 11 La. App. 176, 123 So. 162; Rokes v. Amazon Ins. Co., 51 Md. 512, 34 Am. Rep. 323.

If it be conceded that the weight of authority in this country, as gathered from the decisions of the Federal courts, other than the Supreme Court, and of a majority of state courts in which the question has been passed upon, it is to the effect that it is required of an injured person to see to it that the insurer is given notice of his injury and to forward to insurer the summons or process in any suit instituted by him against the assured, nevertheless the question is one of first instance in the jurisprudence of this state.

Chambers & Trenholm, of Jackson, for appellee.

It must be remembered that appellant is proceeding upon a contract to which he was not a party, and can therefore proceed only upon the theory that it was made for his benefit that theory being predicated upon the insolvency clause.

Adams v. Maryland Casualty Co., 162 Miss. 237, 139 So. 453; Maryland Casualty Co. v. Adams, 159 Miss. 88, 131 So. 544.

One who seeks to take advantage of a contract made for his benefit by another must take it subject to all legal defenses and inherent equities arising out of the contract, such as the fraud of the party procuring it, the nonperformance of conditions, or the right to a set-off, unless the element of estoppel has entered.

13 C. J., Contracts, par. 799, p. 599; Adams v. Maryland Casualty Co., 162 Miss. 237, 139 So. 453.

It is the duty of insured to deliver to the insurer the process served upon him in a suit by a person who has been, or alleges he has been, injured by the insured, which injury would come within the terms of the policy, if the policy so require.

Fentress v. Rutledge, 140 Va. 685, 125 S.E. 668; Heller v. Insurance Co., 118 Ohio St. 237, 160 N.E. 707; Kruger v. Indemnity Exchange, 201 Cal. 672, 258 P. 602; Royal Indemnity Company v. Watson, 61 F.2d 614, C. C. A. 5th Cir.; Metropolitan Casualty Co. v. Colthurst (C. C. A.), 36 F.2d 559, 281 U.S. 746.

Such provision for delivery of the process by the insured to the insurer is of the essence of the contract.

Heller v. Insurance Co., 118 Ohio St. 237, 160 N.E. 707; N. J. Fidelity, etc., Co. v. Love (C. C. A.), 43 F.2d 72.

The injured person in such case is not subrogated to the rights of the insured, at law or in equity, in the absence of contract or statute.

Lundblad v. Casualty Co., 265 Mass. 158, 163 N.E. 874; Miller v. Casualty Co., 50 R. I. 166, 146 A. 412.

Even under a statute giving the injured party a right of action against the insurer, it has been repeatedly held that he has no greater right than the insured had as against the insurer.

Solomon v. Ins. Co., 229 N.Y.S. 257, 132 Misc. 134; Weiss v. N. J. Fidelity, etc., Co., 228 N.Y.S. 314, 131 Misc. 836; Casualty Co. v. Breese, 21 Ohio App. 521, 153 N.E. 206; Clements v. Ins. Co., C. C. A., 41 F.2d 470; N. J. Fidelity, etc., Co. v. Love, 43 F.2d 72; Seltzer v. Indemnity Co., 252 N.Y. 330, 169 N.E. 403; Strausky v. Kousek, 199 Wis. 59, 225 N.W. 401; Bachhuber v. Boosalis, 200 Wis. 574, 229 N.W. 117; Lorando v. Gethro, 228 Mass. 181, 117 N.E. 185; Hermance v. Indemnity Co., 223 N.Y.S. 93, 221 A.D. 394.

Where the policy of insurance gives the injured person a right of action against the insurer in event of insolvency of the insured, such injured person is bound by the provisions of the policy, in the absence of collusion between the insurer and the insured.

Metropolitan Casualty Co. v. Colthurst, 36 F.2d 559, 281 U.S. 746; Seltzer v. Indemnity Co., 252 N.Y. 330, 169 N.E. 403; Royal Indemnity Co. v. Morris, C. C. A., 37 F.2d 90.

Failure of the insured to give the insurer notice of the suit by the injured person, bars such injured person as against the insurer, in the absence of collusion.

Weiss v. N. J. Fidelity, etc., Co., 228 N.Y.S. 314, 131 Misc. 836; Casualty Co. v. Breese, 21 Ohio App. 521, 153 N.E. 206; Clements v. Insurance Co., 41 F.2d 470; Bachhuber v. Boosalis, 200 Wis. 574, 229 N.W. 117; Chapin v. Ocean A. & G. Co., 96 Neb. 213, 147 N.W. 465; Peeler v. U. S. Casualty Co., 197 N.C. 286, 148 S.E. 261; Bartels Brew. Co. v. Indemnity Co., 251 Pa. 63, 95 A. 919; Indemnity Co. v. Bollas, 223 Ala. 239, 135 So. 174; Miller v. Casualty Co., 50 R. I. 166, 146 A. 412.

The demurrer of the appellee was properly sustained.

Argued orally by W. A. Shipman, for appellant, and by E. L. Trenholm, for appellee.

OPINION

Ethridge, P. J.

Prior to the bringing of this suit, the appellant, M. D. Downing, brought suit against the Central Cotton Oil Company for personal injuries received as an employee of said company, and secured a judgment for five thousand seven hundred fifty dollars, upon which execution was issued and returned nulla bona. Thereafter this suit was filed against the Home Indemnity Company of New York, which had written a policy for the Central Cotton Oil Company in an amount not to exceed five thousand dollars, for injuries to employees.

The declaration alleged the recovery of said judgment, and that said policy was in force at the time of the recovery of the judgment and at the time the injury was received, and filed a copy of the policy as an exhibit to the declaration. It was also alleged that the execution issued in the suit against the Central Cotton Oil Company was returned nulla bona, and that at the time the suit was brought, the Home Indemnity Company was doing business in the state of Mississippi. It was further alleged that the Central Cotton Oil Company was insolvent, and had been from the time of the rendition of the judgment to the trial of this suit, and that, by virtue of Condition G of the policy, the benefit of the policy inured to the plaintiff to the extent of the amount thereof. This Condition G reads as follows: "G. The insolvency or bankruptcy of the assured shall not relieve the company of any of its obligations hereunder. If any person or his legal representatives shall obtain final judgment against the assured because of injuries or death covered hereby, and execution thereon is...