Friedman v. Maryland Cas. Co.

• Decision Date: 19 February 1934
• Docket Number: No. 17978.,17978.
• Parties: SAM FRIEDMAN, RESPONDENT, v. MARYLAND CASUALTY CO., APPELLANT.
• Court: Missouri Court of Appeals

71 S.W.2d 491

SAM FRIEDMAN, RESPONDENT, v. MARYLAND CASUALTY CO., APPELLANT.

No. 17978.

Kansas City Court of Appeals. Missouri.

February 19, 1934.

Appeal from Circuit Court of Jackson County. — Hon. Daniel E. Bird, Judge.

AFFIRMED.

Trusty & Pugh for respondent.

Harris & Koontz for appellant.

TRIMBLE, J.

Respondent sued defendant on a policy of indemnity insurance.

The case was submitted on an amended petition which, after the usual formal allegations as to the incorporation and business of defendant and its authority to carry it on in Missouri, alleged, in substance, that in May, 1925, defendant insured plaintiff to the extent of $5000 against liability and damages resulting to him from the operation of a 1924 one-ton Ford truck during the remainder of the year 1925 and until June 20, 1926; that plaintiff paid the premium, and the policy was in force at the time complained of; and said policy insured plaintiff for damages and loss sustained by him by reason of the accident thereinafter complained of, to-wit:

"On or about July 21, 1925, said automobile truck was being driven for and in the operation of plaintiff's business and while the same was passing over an intersection in Kansas City, Missouri, at Benton Boulevard and Forty-fourth Street, it was involved in a collision with a motorcycle being driven by one Herschel Bates and said Bates was injured;"

That said collision was reported to defendant and all conditions of the policy were complied with; that said Herschel Bates presented his claim against plaintiff for damages; that the claim was turned over to and accepted by defendant and was thereafter handled and controlled by defendant; that Bates filed suit against plaintiff, and petition and summons were turned over to and accepted by defendant and thereafter the defense thereof was handled and controlled by defendant, and the right `to settle said cause of action was controlled by it;

That after said collision and injury to said Bates, defendant learned that the driver of plaintiff's said truck was under eighteen and over sixteen years of age, and defendant then contended that, as said driver was acting as a chauffeur and was under eighteen years of age, at the time of said accident, he could not become a licensed chauffeur, and for that reason defendant could not be held liable under the policy;

That if defendant had any such defense, it was waived and abandoned by taking charge of the defense of said suit and the control thereof, and estopped itself to assert that it was not liable;

That defendant, after it knew plaintiff's driver was under eighteen years of age, continued to control the defense of said suit, the preparation for trial thereof and the question of settlement under the provisions of the policy; and defendant told plaintiff that it would do so, and that it would assume the responsibility of the preparation and trial and the result thereof, and prevented the plaintiff herein from settling the Bates suit for $500 or for any other sum, and told plaintiff that, under the terms of the policy, defendant had the right to deny liability if plaintiff made any settlement of the Bates case without the insurer, defendant's consent; and continued to control the defense and prevent any settlement of said claim, until plaintiff was compelled to pay the judgment rendered thereon in order to avoid an execution and further damages and loss, and save his property; and plaintiff was thereby damaged to the amount stated herein;

That there was, and is, no consideration for the claim of defendant that it is not liable under the policy because said driver was under eighteen years of age;

That said Bates' lawsuit was tried and judgment for $2500 and costs was rendered against plaintiff, defendant in that suit, and an appeal was taken by defendant therein (plaintiff herein) from said judgment, but the same was affirmed in the appellate court and said judgment became final, and plaintiff called upon defendant to pay said judgment and costs, but defendant repudiated its indemnity insurance contract and refused, and now refuses, to pay said judgment;

That plaintiff paid out the sum of $2792.70, in satisfying said judgment and costs, on July 30, 1928; and by reason of defendant's refusal, it has been guilty of vexatious delay.

Wherefore, judgment was prayed for $207 attorney's fees and for $2792.70 with interest from said July 30, 1928.

Defendant, in its amended answer to the above petition, admitted its incorporation and license to do business in Missouri, admitted the issuance of the policy sued on, and that it was duly in force, according to its terms, at the times alleged; admitted the collision with Bates of plaintiff's truck (driven in the operation of plaintiff's business); admitted that said Bates was injured and that he obtained a judgment therefor for $2500 and costs; but denied generally every other allegation.

Defendant's amended answer then set up two provisions of the policy, as follows, to-wit:

"This policy does not cover while the said Automobile or Automobiles are (a) being used for ..., or (b) being operated by any person under the age limit fixed by law, or under the age of sixteen years in any event, ..."

"The Company is not responsible for any settlements made nor for any expense incurred by the Assured unless such settlements or expenditures are first specifically authorized in writing by the Company, ..."

"An agent has no authority to change this Policy or to waive any of its provisions, ... and no waiver of its provisions, shall be valid unless an endorsement be added hereto, signed by the President or Vice-president, and the Secretary or an Assistant Secretary of the Company, expressing such ... waiver."

Said amended answer further set up that at the time of the injury to Herschel Bates, plaintiff's automobile —

"Was being operated by an employee of plaintiff who was under the age limit fixed by law, in that such employee was a chauffeur and at the time under the age of eighteen years, and that by reason thereof defendant was not and is not responsible to plaintiff by reason of the injury to the said Herschel Bates, or by reason of the judgment referred to in plaintiff's petition."

Defendant's said answer also admitted that the Bates petition and summons were sent to it by plaintiff, and defendant was requested to assume the defense of said Bates' suit and assume liability to the amount of the policy. But said answer set up that it thereupon denied liability on the ground that, as the operator of plaintiff's automobile, at the time of the collision, was under the age required by the laws of Missouri, liability under such circumstances was expressly exempted from the coverage provided by said policy.

That, heretofore, plaintiff brought suit against this defendant in the Circuit Court of Jackson (Grundy?) County, Missouri, upon the exact cause of action herein, which suit was removed by defendant to the District Court of the United States for the Western Division of the Western District of Missouri; that both of said courts were courts of competent jurisdiction and each of them had jurisdiction of the parties and of the subject-matter, and that a copy of the first amended petition, in said United States District Court, and on which the case was therein tried, is attached hereto as Exhibit A;

That this defendant filed in said United States District Court an answer in which it set up the same defense as in this answer raised, namely, that the policy of insurance did not cover the accident for the reason that the operation of plaintiff's truck, at the time of the collision, was in violation of the Missouri law in the particular hereinabove set out, by reason of which plaintiff was not entitled to recover in said action in the said United States District Court, a copy of which answer is attached marked B That the issues in said case in the United States District Court and the issues herein are exactly the same, and the legal question presented in that court and in this, is whether or not an operator, over sixteen and under eighteen years of age, being a hired operator or chauffeur, was operating in violation of the law; that in the United States District Court it was held that the statutes of the State of Missouri governing the operation of automobiles by hired operator or chauffeur did not apply to the facts of the case, and a judgment for plaintiff was entered;

That an appeal was taken by defendant from this judgment to the United States Circuit Court of Appeals for the Eighth Circuit which last named court decided that the Missouri statutes hereinbefore referred to, governing the operation of motor cars by hired operators or chauffeurs, did apply to the facts in this case as pleaded and presented, and therefore the judgment of said United States Appellate Court is a final determination of that question and adjudicated finally all of the rights of the plaintiff in this case (the case at bar) to recover upon the cause of action as set out in the pleadings herein.

Defendant, in its amended answer herein, also denied that it ever waived or abandoned any defense it had, or has, to this action, under the provisions of said policy; and defendant further set up that after said collision was reported to defendant, it learned that the operator in charge of plaintiff's car was a chauffeur within the meaning of the Missouri law and was under the age of eighteen years at the time of the said injury to Herschel Bates, by reason whereof the automobile of plaintiff was being operated in violation of law, which condition is not covered by the policy, and the defendant denied any liability under said policy to accept the Bates case, or to defend the same, or to proceed further therein.

Defendant, in said amended answer, further set up that on September 25, 1925, plaintiff entered into a written agreement with defendant whereby it was agreed that defendant would accept the...