Globe Indemnity Co. v. Martin

• Decision Date: 27 May 1926
• Docket Number: 6 Div. 683
• Citation: 108 So. 761,214 Ala. 646
• Parties: GLOBE INDEMNITY CO. v. MARTIN.
• Court: Alabama Supreme Court

108 So. 761

214 Ala. 646

GLOBE INDEMNITY CO. v. MARTIN.

6 Div. 683

Supreme Court of Alabama

May 27, 1926

Appeal from Circuit Court, Jefferson County; W.M. Walker, Judge.

Bill in equity by H. Clay Martin against the Globe Indemnity Company and Mrs. C.H. Gates. From a decree overruling demurrer to the bill, defendant insurance company appeals. Reversed and remanded.

London Yancey & Brower and Frank Bainbridge, all of Birmingham, for appellant.

Ralph W. Quinn and William F. Spencer, both of Birmingham, for appellee.

GARDNER J.

This bill was filed by appellee against appellants Globe Indemnity Company and Mrs. C.H. Gates, seeking satisfaction of a judgment obtained by complainant against respondent Mrs. C.H Gates. From a decree overruling demurrer to the bill, the Globe Indemnity Company has prosecuted this appeal.

The bill disclosed that on December 20, 1923, complainant sustained injuries by reason of being struck by an automobile belonging to respondent Mrs. C.H. Gates; that in October 1924, complainant brought suit against Mrs. Gates to recover damages for such injuries, and in April, 1925, recovered a judgment therefor against her in the sum of $1,500, which judgment has not been satisfied; that at the time such injuries were received (December 20, 1923), the Globe Indemnity Company had in force and effect with Mrs. Gates a "contract of insurance *** indemnifying her against loss from liability imposed by law upon her on account of bodily injury, suffered by any person by reason of the ownership maintenance, or use of her automobile." The bill does not make the insurance policy an exhibit thereto, nor are the provisions as to liability set out therein. The words above quoted from the bill are susceptible of the construction that the policy was one of indemnity (as distinguished from liability only) against actual pecuniary loss suffered by the insured, evidenced, by way of illustration in the instant case, by the payment of the judgment rendered.

Construing the bill most strongly against the pleader, we think the contract therein referred to is to be so interpreted and within the character of insurance policies considered in Goodman v. Georgia Life Ins. Co., 189 Ala. 130, 66 So. 649, and Hollings v. Brown, 202 Ala. 504, 80 So. 792.

In these cases the equity of a bill of the character here in question was denied, and it was held that the insurance contract imposed no obligation upon the company, "except for liabilities actually discharged by the payment of money." Speaking further to the argument as to the right of the injured party (a stranger to the contract), the court, in the Goodman Case, supra, said:

"Courts cannot tamper with and change the terms of contracts, nor can they substitute as beneficiaries thereunder unnamed and unintended strangers who have nothing whatever to do with either the contracts or the contractors."

Under these authorities it is therefore clear that the bill, as here construed, is without equity.

Evidently to meet the situation arising from the binding language of these insurance policies, as held in the above-cited authorities, sections 8376 and 8377 were embodied in and adopted as a part of the Code of 1923. These sections appear to be substantial reproductions of the statute of the state of Massachusetts as found set out in Lorando v. Gethro, 228 Mass. 181, 117 N.E. 185, 1 A.L.R. 1374, in original reference note 1.

Counsel for appellee lay stress upon section 8377, our Code, which treats of the remedy, but this section is to be construed in the light of its corollary, the preceding section, and the legislative intent evolved from a consideration of the entire subject-matter as embraced in the two sections, which read as follows:

"8376. Liability of Insurance Companies on Casualty Risks; When Absolute.--In respect to every contract of insurance made between an insurance company and any person, firm or corporation, by which such person, firm or corporation is insured against loss or damage on account of the bodily injury or death by accident of any person, for which loss or damage such person, firm or corporation is responsible, whenever a loss occurs on account of a casualty covered by such contract of insurance, the liability of the insurance company shall become absolute, and the payment of said loss shall not depend upon the satisfaction by the assured of a final judgment against him for loss, or damage, or death, occasioned by said casualty. No such contract of insurance shall be canceled or annulled by any agreement between the insurance company and the assured after the assured has become responsible for such loss or damage, and any such cancellation or annulment shall be void.

"8377. Remedy of Injured Party after Recovering Judgment.--Upon the recovery of a final judgment against any person, firm, or corporation by any person, including administrators or executors, for loss or damage on account of bodily injury or death, if the defendant in such action was insured against said loss or damage at the time when the right of action arose, the judgment creditor shall be entitled to have the insurance money provided for in the contract of insurance between the insurance company and the defendant, applied to the satisfaction of the judgment, and if the judgment is not satisfied within thirty days after the date when it is rendered, the judgment creditor may proceed in equity against the defendant and the insurance company to reach and apply the insurance money to the satisfaction of the judgment."

The argument for appellee is that the latter section deals only with the remedy, and is...