Floyd v. American Employers' Ins. Co. of Boston, Mass.

• Decision Date: 26 May 1938
• Docket Number: 14691.
• Parties: FLOYD v. AMERICAN EMPLOYERS' INS. CO. OF BOSTON, MASS.
• Court: South Carolina Supreme Court

197 S.E. 385

187 S.C. 344

FLOYD v. AMERICAN EMPLOYERS' INS. CO. OF BOSTON, MASS.

No. 14691.

Supreme Court of South Carolina

May 26, 1938

Appeal from Spartanburg County Court; Arnold R. Merchant, Judge.

Action upon an automobile policy covering public liability and property damage by Mrs. Leita R. Floyd, as executrix of the estate of John F. Floyd, deceased, doing business under the name of the J. F. Floyd Mortuary, against the American Employers' Insurance Company of Boston, Mass. From a judgment for the plaintiff, defendant appeals.

Reversed.

Johnson & Johnson, of Spartanburg, for appellant.

E. W Johnson and Lyles & Daniel, all of Spartanburg, for respondent.

FISHBURNE Justice.

On February 2, 1934, the appellant, American Employers' Insurance Company of Boston, Massachusetts, issued to Floyd's Mortuary, a corporation, a policy of liability insurance on a fleet of fourteen automobiles consisting of three hearses, two ambulances, five sedans, and other motor vehicles,-all of which were used in the respondent's business of funeral director and undertaker. A separate insurance premium was charged for each of these motor vehicles, the aggregate of the premiums amounting to $556.49.

On June 27, 1934, one of the respondent's automobiles, a Cadillac sedan, described in the policy, while being operated by one of respondent's employees in connection with the conduct of a funeral and interment, overturned while returning from the place of interment, as a result of which accident six of the occupants of the car claimed to have sustained bodily injuries. Thereafter each of these persons brought a separate suit against the respondent for damages alleged to have been sustained by them severally on account of the negligent and wanton operation of the automobile. Notice of such suits was promptly given to the appellant, which denied liability under the terms of the policy. By agreement all of the cases were tried together. The respondent defended the actions, and the trial resulted in a verdict in favor of five of the claimants in varying amounts. Judgments were entered on the verdicts adverse to the respondent, on June 14, 1935.

On August 28, 1935, the respondent, having satisfied three of the judgments, brought an action against the appellant for the reformation of the policy so as to correctly name the respondent as the insured, and for the recovery under the policy of the amount alleged to have been paid by the respondent in satisfying the judgments and in defending the actions. This action was tried on November 19, 1935, and resulted in a verdict in favor of the respondent for $1,130.30. This judgment was paid by the appellant, and was satisfied.

During the pendency of the aforementioned action, the respondent commenced the action at bar against the appellant, on November 1, 1935. The complaint purported to allege three causes of action: (1) For reformation of the policy so as to name the respondent as the assured; (2) To recover damages for appellant's alleged breach of the policy by failing to pay the remaining two judgments, to wit: a judgment of $300.00, and costs, obtained against the plaintiff by J. E. Bailey, one of the occupants of the Cadillac Sedan, together with legal expenses incurred by the respondent in defense of such action; and (3) For the alleged breach of the policy by failing to pay a judgment for $1,800.00, and costs, obtained against the respondent by James Stafford, resulting from the same accident, together with legal expenses incurred by the respondent in defense of that action.

The two judgments referred to in the foregoing complaint were obtained in the same trial and at the same time as were the three to which we have already referred.

Later the respondent filed an amended complaint, setting up as additional elements of damage certain medical and hospital expenses guaranteed or paid by her in caring for Bailey and Stafford immediately following the accident, which she claimed were covered by the policy. These additional elements of damage were not stated as a separate cause of action, but were incorporated in the second and third causes of action to which we have just made reference.

As a defense to this last mentioned action, the appellant pleaded the former judgment as a bar, alleging that the damages claimed by the respondent in the case at bar, are damages which taken singly or collectively could and should have been included in her action for reimbursement, commenced August 28, 1935, inasmuch as any right which she may have had to recover such damages had fully accrued at the time of the commencement of that action. It was further alleged that the respondent improperly split her alleged cause of action into two separate suits. Other defenses were pleaded, but in our view of the case it is not necessary to consider them.

The trial Judge overruled the appellant's plea in bar, and the trial resulted in a verdict against it in favor of the plaintiff.

The appeal presents several issues, but in our opinion we need only consider whether the trial judge erred in refusing to sustain the appellant's plea in bar.

The insurance policy contains the following provision (Sec. II), pertinent here: "(a) To pay and satisfy judgments rendered against the Assured in legal proceedings defended by the Corporation and to protect the Assured against the levy of executions issued against the Assured upon the same, all subject to the limits expressed in Item 5 of the Declarations; and, in addition (b) to pay all expenses incurred by the Corporation for investigation, negotiation, and defense of any such claims or proceedings; the expense incurred by the Assured for such immediate medical or surgical relief as shall be imperative at the time any such injuries are sustained * * *."

Under this section of the policy the appellant denied all liability, and so notified the respondent several months prior to the institution of the respondent's action of August 28, 1935.

The appellant contends that the respondent split her cause of action into two separate suits, and that judgment having been rendered on the merits in the action of August 28, 1935, such judgment constituted a bar to any recovery in the instant case, which is based upon damages flowing from the same breach of the contract.

It is manifest from the record that every element of damage now sought to be recovered by the respondent in the case at bar, had fully accrued at the time she brought her prior action of August 28, 1935. Prior to the commencement of that action, all liability of the respondent to the persons injured in the accident had finally been determined and adjudicated; all legal expenses of the respondent in defense of the actions arising out of the accident had been fixed and agreed upon; and the amount and the extent of all hospital and medical bills incurred by the respondent for Bailey and Stafford, had long since been ascertained. There is no element of damage claimed in the instant case which had not fully accrued at the time of the commencement of the plaintiff's prior action.

The legal proposition that a judgment for a part of one entire demand is a conclusive bar to any other suit for another part of the same demand, is everywhere inflexibly maintained. No formula has been devised which furnishes a test for determining in all cases what contracts are severable and what are entire. The primary criterion for determining the question is the intention of the parties as determined by a fair construction of the terms and provisions of the contract itself, by the subject matter to which it has reference, and by the circumstances of the particular transaction giving rise to the question. 12 Am.Jur., Contracts, Sec. 315.

The question of whether a contract is entire or divisible is ordinarily determined by inquiring whether the contract embraces one subject matter or more, whether the obligation is due at the same time to the same person, and whether the consideration is entire or apportioned. If the consideration to be paid is single and entire the contract must be held to be entire, although the subject thereof may consist of several distinct and wholly independent items. 12 Am.Jur., Contracts, Sec. 317.

It has been said that "the courts and authorities can do nothing more than lay down general rules concerning this question, and such rules are seldom determinative of the questions arising under a particular contract. Whether a contract is divisible or indivisible must be determined upon the bare facts of that contract." Helsley v. American Mineral Production Company, 118 Wash. 571, 204 P. 190, 191; 1 C.J.S., Actions, § 103, p. 1317.

In United States v. Throckmorton, 98 U.S. 61, 25 L.Ed 93, it is said by the Federal Court that (page 65) "There are no maxims of the law more firmly established, or of more value in the administration of justice, than the two which are designed to prevent repeated litigation between the same parties in regard to the same subject of controversy, namely, interest rei publicae ut sit finis litium, and nemo debet bis vexari pro una et eadam causa." Hence the principle is uniformly and inflexibly maintained that a judgment for a part of an entire demand is a bar to any other suit for another part of the same demand. A claim which is in its nature entire cannot be split up into several causes of action, and if suit is brought for a part only of the items constituting an entire claim, recovery for that part will bar recovery in any subsequent suit for the residue or any other items of the same demand. Pomeroy v. Prescott, 106...