Eisenbarth v. Equity Mut. Ins. Co.

• Decision Date: 03 July 1945
• Docket Number: 26786
• Parties: EISENBARTH v. EQUITY MUT. INS. CO. et al
• Court: Missouri Court of Appeals

189 S.W.2d 168

EISENBARTH
v.
EQUITY MUT. INS. CO. et al

No. 26786

Court of Appeals of Missouri, St. Louis

July 3, 1945

'Not to be reported in State Reports.'

Moser, Marsalek & Dearing, of St. Louis, for appellant.

Paul J. Kaveney and Francis R. Stout, both of St. Louis, for respondent.

OPINION

HUGHES

In the course of this opinion Powell Brothers Truck Lines, Inc., will be referred to as Powell Brothers; Equity Mutual Insurance Company as Equity Mutual, and Casualty Reciprocal Exchange as Reciprocal Exchange.

On August 9, 1935, Mrs. Minerva Eisenbarth was injured in a collision between an automobile in which she was riding and a truck operated by Powell Brothers, and by reason thereof brought suit for her damages in the sum of $ 7500 against Powell Brothers. Powell Brothers at the time carried a policy of insurance in Reciprocal Exchange covering its trucks. The insurer's limit of liability on account of injury to one person was $ 10,000. The policy contained provisions that the insured, termed the 'subscriber,' should not voluntarily assume any liability nor settle any claim except at its own cost, nor interfere in any negotiations or settlements or any legal proceeding, and should, when requested by the exchange, cooperate in the defense of any suit and furnish any bond necessary for prosecuting an appeal; that the subscriber give immediate notice to the exchange of any accident, claim or loss covered by its contract of insurance, and in case suit resulted immediately forward to the Exchange any process served upon the subscriber, and that the Exchange would at its own cost defend the suit in the name and on behalf of the subscriber.

Under its policy of insurance Reciprocal Exchange assumed full charge of the defense of Mrs. Eisenbarth's damage suit, and Powell Brothers cooperated in the defense of the suit. The case was tried and resulted in a verdict and judgment for the defendant, which was reversed by this Court on March 7, 1939 (235 Mo.App. 442, 125 S.W.2d 899), on the ground of error in defendant's instructions. Thereafter the plaintiff amended her petition and raised her prayer for damages from $ 7500 to $ 18,000. The second trial of the case in May, 1940, resulted in a verdict and judgment in plaintiff's favor and against Powell Borthers in the sum of $ 13,500. After motion for new trial was overruled and judgment entered against Powell Brothers, an appeal was taken to the Supreme Court, [189 S.W.2d 169] and an appeal bond in the sum of $ 20,000 was executed and filed in the circuit clerk's office, Powell Brothers signing the same as principal and Equity Mutual signing it as surety more of which will be said in the course of the opinion. On December 16, 1941, the Supreme Court handed down its opinion affirming the judgment (161 S.W.2d 263).

After the affirmance of the judgment in the damage suit Reciprocal Exchange offered to deposit in court, and be released from further liability, the full amount of its coverage in its insurance contract with Powell Brothers, to-wit, $ 10,000, plus interest and costs, but plaintiff declined to accept less than full payment of her judgment, interest and costs, and brought this suit on the appeal bond against Powell Brothers, as principal, and Equity Mutual, as surety, which suit resulted in a judgment in plaintiff's favor, after which Reciprocal Exchange paid its full coverage of $ 10,000, with interest, and the costs of suit, and the surety on the appeal bond, Equity Mutual, paid the balance of the judgment in the sum of $ 4074.88 and on December 11, 1942, plaintiff in open court acknowledged satisfaction of her judgment.

Thereafter, on January 11, 1943, the defendant Equity Mutual, seeking the benefits under Section 3328, R.S.1939, Mo.R.S.A. § 3328, filed its motion for judgment against Powell Brothers for $ 4074.88. Such statute provides that in all cases where judgment is given upon any bond, bill or note against the principal debtor and any surety therein, and such surety shall pay the judgment or any part thereof, he shall be entitled, upon motion, to a judgment in the same court against the principal debtor for the amount he has paid, with ten percent interest thereon from the time of payment, together with costs.

Powell Brothers filed a motion and demand for a trial by jury of the motion for judgment, which was overruled on April 30, 1943. On November 12, 1943, Powell Brothers filed an amended answer to the motion of Equity Mutual, the salient allegations being:

That the Reciprocal Exchange undertook the defense of the Eisenbarth case under the terms of its policy issued to Powell Brothers, and had exclusive control of the conduct of the defense, and as part and parcel thereof appealed from the judgment of the circuit court to the Supreme Court and arranged for the appeal bond, and the bond was signed by the Equity Mutual at the request of and for the benefit and credit of Reciprocal Exchange, which paid the premium thereon, and that the Reciprocal Exchange agreed to indemnify Equity Mutual.

The amended answer further alleged that when the appeal bond was signed by Equity Mutual, the judgment could have been settled for $ 10,000 and that Powell Brothers desired and notified Reciprocal Exchange to settle the judgment, and that Reciprocal Exchange was, in good faith, required to do so and agreed to do so but that Reciprocal Exchange failed to settle the judgment...