Ducommun v. Strong

• Decision Date: 08 February 1927
• Citation: 212 N.W. 289,193 Wis. 179
• Parties: DUCOMMUN v. STRONG ET AL.
• Court: Wisconsin Supreme Court

193 Wis. 179

212 N.W. 289

DUCOMMUN

v.STRONG ET AL.

Supreme Court of Wisconsin.

Feb. 8, 1927.

Appeal from Circuit Court, Barron County; W. R. Foley, Judge.

Action by Robert Ducommun against William Strong and the Interstate Exchange to recover for injuries to person and damage to property sustained in an automobile accident. From an order overruling its demurrer to plaintiff's complaint, defendant Interstate Exchange appeals. Affirmed.--[By Editorial Staff.]

Action by Robert Ducommun against William Strong and the Interstate Exchange to recover for injuries to person and damage to property sustained in an automobile accident. The Interstate Exchange appeals from an order overruling its demurrer to plaintiff's complaint.Coe Bros., of Barron (Schoetz, Williams & Gandrey, of Milwaukee, of counsel), for appellant.

Thomas & Hass, of Ladysmith (Olin & Butler and R. M. Rieser, all of Madison, of counsel), for respondent.

Leon B. Lamfrom, of Milwaukee, and Richmond, Jackman, Wilkie & Toebaas and Quarles, Spence & Quarles, all of Madison, as amicus curiæ.

STEVENS, J.

(1) The Interstate Exchange bases its demurrer on the ground that the policy of insurance which it issued to the defendant Strong was one of indemnity only which imposed no direct liability.

The policy issued by the Interstate Exchange provides that the defendant Strong, “the person shown on the face hereof, is insured for the kinds and amounts of automobile insurance indicated upon this policy, and against the losses and liabilities as shown herein which are more fully described by appropriate riders to be attached hereto.” These riders provide that “the insured is insured against actual loss or damage to the automobile or automobiles described in said policy,” and that “the insured or a member of his family is insured against money loss by reason of his legal liability to others for bodily injuries accidentally sustained.”

The policy contained the usual provisions that immediate notice of loss by the insured or of claim against insured be given to the home office of the Exchange; that any summons or other process served upon the insured should be immediately forwarded to the Exchange, which is given full control of all actions under the policy with full power to determine what claims shall be compromised and what shall be contested. “The insured reserves no right to make or negotiate for settlement, that matter being placed entirely in the hands of the Exchange.”

[1] The fact that the policy contains a recital that the Exchange is created pursuant to section 1915m (now section 201.39) of the Statutes does not change the nature of the obligation assumed when the policy was issued. The complaint alleges and the demurrer admits that the “Interstate Exchange was and is an insurance corporation, duly organized and existing under and by virtue of the laws of Wisconsin,” and that defendant Strong was insured by it. It is apparent that appellant construed section 201.39 of the Statutes as a grant of power to corporations organized under its provisions to issue policies of insurance which create a direct liability. Otherwise it would not have issued a policy imposing direct liability, but would have issued one merely imposing liability to indemnify the insured. While the policy gives the appellant Exchange the right to act as attorney in fact for the insured under this policy, there is nothing in the complaint to suggest that any act has been performed by appellant as such attorney in fact. Even if the appellant had seen fit to exercise its right to exchange policies, the exercise of such power would not relieve appellant from the direct liability to the insured which it assumed when it issued its policy of insurance to plaintiff.

[2] There is nothing in the policy to suggest that appellant's liability is confined to indemnity, except the use of the word “indemnity” in the personal injury and property damage rider. The use of this word cannot relieve the appellant from the direct liability which it assumed when it issued the policy. The situation is not unlike that which was considered in Ehlers v. Automobile Liability Co., 166 Wis. 185, 164 N. W. 845, where the suit was upon an “indemnity contract,” but direct liability was imposed by statute, as it is imposed by the insurance contract and by section 85.25 of the Statutes in this case. It was there held upon demurrer that the insurance company was a proper party and that a cause of action was stated against the company. The nature of the liability of the appellant Exchange is to be determined from the entire policy viewed in the light of the statutes, not by the consideration of a single word contained in the policy.

[3] It is significant that the policy contains no provision limiting liability to the repayment of sums paid by the insured to satisfy a judgment after trial as was the case in Glatz v. General Acc. Corp., 175 Wis. 42, 183 N. W. 683. On the contrary, the policy contains an unqualified agreement to insure the defendant Strong “for the kinds and amounts of automobile insurance indicated upon this policy.” Furthermore the policy reserves to the appellant full and complete control over the adjustment of all claims that may arise under the policy. Irrespective of the liability imposed by the Statutes enacted in 1925, hereafter considered, these provisions of the policy give the appellant Exchange such an interest in this action to enforce liability for injury to person and damage to property as to make the Exchange a proper party to the action, whose right to participate in the defense of this action is found in its interest in the controversy--in its...