Employers' Liability Assur. Corp. v. Perkins

• Decision Date: 21 November 1935
• Docket Number: 21,22.
• Citation: 181 A. 436,169 Md. 269
• Parties: EMPLOYERS' LIABILITY ASSUR. CORPORATION, LIMITED, ET AL. v. PERKINS (TWO CASES).
• Court: Maryland Court of Appeals

181 A. 436

169 Md. 269

EMPLOYERS' LIABILITY ASSUR. CORPORATION, LIMITED, ET AL. v. PERKINS (TWO CASES).

Nos. 21, 22.

Court of Appeals of Maryland

November 21, 1935

Appeals from Baltimore Court of Common Pleas; Joseph N. Ulman, Judge.

Actions by Helen R. Perkins and by Rody P. Perkins against John P Martin and others, wherein the Employers' Liability Assurance Corporation, Limited, was garnishee. From adverse judgments, the garnishee and others appeal. The appeals were consolidated.

Judgments reversed without awarding a new trial.

Argued together before BOND, C.J., and OFFUTT, PARKE, SLOAN MITCHELL, SHEHAN, and JOHNSON, JJ.

James Morfit Mullen and R. Contee Rose, both of Baltimore (John H Filler, of Baltimore, on the briefs), for appellants in both cases.

William L. Marbury, Jr., and G. Van Velsor Wolf, both of Baltimore (Marbury, Gosnell & Williams, of Baltimore, on the brief), for appellees in both cases.

PARKE Judge.

On September 1, 1931, Helen R. Perkins and Rody P. Perkins were traveling in an automobile on a public highway in Maryland. The automobile was driven by its owner, Helen R. Perkins, and a collision occurred with an automobile which was owned and operated by John P. Martin, a nonresident of Maryland. The occupants of the automobile, which was operated by Mrs. Perkins, were injured and the automobile damaged.

At the time of the accident, Martin carried an operative insurance policy with the Employers' Liability Assurance Corporation, Limited, under which, subject to the limitations and conditions of the policy, the assurer agreed: (a) To settle or to defend against claims resulting from the liability imposed upon the assured by law for damages on account of either bodily injuries and death accidentally sustained by a third party or accidental injury, destruction, and loss of use of the property of another. (b) To pay the assured for loss or damage to his automobile that resulted from specified injuries which were recovered in an accidental collision or by an upset. (c) To pay and satisfy judgments rendered against the assured in legal proceedings which had been defended by the assurer, and to protect the assured against the levy of executions issued against the assured on such judgments. (d) To pay all the expenses incurred by the assurer for investigation, negotiation, and defense of claims or proceedings; the expenses incurred by the assured for immediate and imperative medical or surgical relief; all premiums on attachment and appeal bonds; and the costs taxed against the assured in any such proceedings, and the interest accruing before or after the entry of judgment until the payment by the assurer of its share of the judgment. (e) To investigate injuries and to settle or defend any resulting claims or suits for damages that may be instituted against the assured for such injuries. It was further agreed that the insolvency or bankruptcy of the assured should not release the assurer from the payment of the damages for injuries sustained or loss occasioned during the life of the policy, and, in case execution against the assured is returned unsatisfied in an action brought by the injured, because of such insolvency or bankruptcy, then an action may be brought by the injured person or his personal representative against the assurer under the terms of the policy for the amount of the judgment that is not in excess of the limits of the policy.

The agreements thus summarized are subject to certain conditions, which cannot be waived or altered except by an indorsement which is attached to the policy and is signed by a designated executive officer. There was no such indorsement, and, so, full force and effect must be accorded to the conditions that, upon the occurrence of an accident covered by the policy, the assured shall give written notice of it to the assurer, and of the full particulars of any claim made because of the accident; and, if any suit be brought against the assured on account of the accident, the assured shall immediately forward to the corporation or its duly authorized agent every notice, summons, or other process served upon the assured.

After the accident, the assured forthwith gave the required notice under the policy of the happening of the accident, and a representative of the assurer attended, on September 27, in Maryland, a trial before a justice of the peace, of the assured on criminal charges growing out of the accident. On November 3, 1931, separate actions on titling for personal injury and for injury to property, which were alike caused by the accident, were brought in Maryland by Helen R. Perkins and Rody P. Perkins against the assured, who was a resident of the District of Columbia and who had no place of business or of residence within the state of Maryland. The collision of the two automobiles had, however, happened on a highway of the state, and the actions were accordingly brought pursuant to the terms of the Acts of 1931, c. 70 (Code, art. 56, § 190A).

On the day the actions were begun, the attorney for the several plaintiffs wrote to the assured that he had instituted proceedings in the superior court of Baltimore City to recover damages for the injuries sustained by the plaintiffs through the negligent operation of the assured's automobile, and requested the assured to advise him if the assured would accept service of process, and, if not, that the plaintiffs would proceed to file the suits in the District of Columbia.

Upon the receipt by mail of this communication the assured delivered the letter to the assurer by leaving it with the assurer's agent in Washington. The defendant, however, never accepted service of process in connection with these actions, but no actions were ever filed in the District of Columbia.

On November 18, 1931, an attorney for the assurer wrote to the attorney for the plaintiffs stating that the matter had been referred to him and that he would discuss the cases with the plaintiffs' attorney. Some negotiations followed with respect to a settlement, and in April, 1932, a medical examination of Mrs. Perkins was made by a doctor of the assured.

Meanwhile nothing further seems to have been done in the pending actions until a lapse of six months, when, under the provisions of the Acts of 1931, c. 70, process was issued and served on the secretary of state on May 8, 1932, and notice of such service and copies of the declarations were forthwith sent by registered mail by the attorney for the plaintiffs to the defendant John P. Martin. The registered envelopes were delivered to the wife of John P. Martin, who signed the defendant's return receipts, which were filed in the respective proceedings, with the affidavits of either the plaintiffs or their attorney that these provisions of the statute had been complied with. After the receipt of these envelopes, Mrs. Martin delivered the notices and the copies of the declarations to John P. Martin, her husband and the defendant, but John P. Martin never delivered these notices of the service of process upon the secretary of state and the copies of the declarations to the assurer, which did not learn of the service in the cases and the receipt by the assured of the notices and declarations until after October 11, 1932, when the judgments by default for want of pleas were extended, after inquisitions had, in favor of Helen R. Perkins for $3,750, and of Rody P. Perkins for $1,250.

After the assurer was informed of the two judgments, its attorney wrote to the defendant that although the notices and copies of the declarations had been sent to him by registered mail and had been received by him or by some one in his behalf on May 11, 1932, he had made no appearance in either case and judgments had been entered. The letter further stated that the defendant had been requested by the assurer immediately to refer to its representative in Washington all papers that he might receive, and that, because of his breach of the condition of the policy requiring him "to refer to us (the assurer) the declarations and the notices which were sent to you (the assured) by registered mail * * * you are hereby notified that we cannot relieve you of the payment of these judgments or accept any responsibility under our policy."

On November 11, 1932, the attorney for the plaintiffs called by telephone the attorney for the assurer and notified him of the recovery of the two judgments against Martin, and was informed of the breach of the conditions of the policy by Martin. Four days later a letter was sent in behalf of the plaintiffs to the defendant advising him that steps would be taken to collect the judgments, if they were not paid by November 23. At the same time, the attorney for the plaintiffs inclosed a copy of this letter in one to the attorney for the insurance company and stated that if the latter desired to plead on behalf of the defendant, and would so advise counsel for the plaintiffs before November 23, he would consent to strike out the judgments, but that if the offer were not accepted by the time limited, the plaintiffs would proceed without further notice. In reply to this communication, the assurer promptly replied and reiterated its position that the breach of condition by the assured had relieved the company of any liability under the policy, and that, therefore, it had no right to object to any action contemplated by the plaintiffs.

The attorney, who had represented the plaintiffs, withdrew from the cases, and he was succeeded by another, who requested the court to strike out the judgments of October 11, which was done on December 8, 1932. On this date, the new attorney renewed the original proceedings under chapter 70 of the Acts of 1931, and the proceedings were, at first, similar except...