Goodman v. Georgia Life Ins. Co.

• Decision Date: 11 June 1914
• Docket Number: 717
• Citation: 66 So. 649,189 Ala. 130
• Parties: GOODMAN v. GEORGIA LIFE INS. CO. et al.
• Court: Alabama Supreme Court

66 So. 649

189 Ala. 130

GOODMAN v. GEORGIA LIFE INS. CO. et al.

No. 717

Supreme Court of Alabama

June 11, 1914

On Application for Rehearing, November 7, 1914

Appeal from City Court of Birmingham; H.A. Sharpe, Judge.

Bill by N. Goodman against the Georgia Life Insurance Company and others to enforce the payment of a judgment. Decree on demurrer for respondents, and complainant appeals. Affirmed.

The bill shows the following facts: In July 1911, complainant was injured by an automobile operated by the Birmingham Auto Company, and in November, 1912, recovered a judgment therefor in the sum of $1,500. Said auto company was protected by a policy of indemnity insurance issued by the Georgia Life Insurance Company. This policy contains the following provisions:

D. No action shall lie against the company to recover for any loss or expenses under this policy, unless it shall be brought by the assured for loss or expense actually sustained and paid in money by him after actual trial of the is sues nor unless such action is brought within two years after payment of such loss or expense.

Said auto company went into the hands of the receiver some time in 1911. No part of the judgment has ever been paid to complainant, although he has demanded payment from such receiver, and has also requested said receiver to bring suit on said insurance policy, and offer to indemnify him for any cost incurred in that behalf. It is alleged that said insurance company's attorney, at its instance, defended the said suit against said auto company for a time, but finally withdrew and suffered a judgment by default. The prayer is for a decree against said insurance company for $1,500, with interest and costs; also prayer for general relief.

Hugo L Black, Samuel B. Stern, and David J. Davis, all of Birmingham, for appellant.

Charles A. Calhoun and Percy, Benners & Burr, all of Birmingham, for appellees.

SOMERVILLE J.

The bill is wholly wanting in equity.

Under the express provisions of the policy of insurance, the assured, the auto company, had no right of action against the insurance company, except for liabilities actually discharged by the payment of money. Not having met this essential condition of the indemnity contract, the auto company could not itself maintain any action on the policy. Certainly a stranger to the contract cannot do so either directly or indirectly.

Complainant's theory is that a court of equity may treat the contract as made for the benefit of any person injured by the auto company, and this without regard to its terms and limitations. This theory can find no support in any principle of law or equity, and is too untenable for serious discussion. 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. To exercise such powers would be to usurp despotic authority.

If the insurance company received the funds of the auto company in payment of the policy premium under circumstances which make their diversion from the coffers of the auto company a material fraud upon complainant, he might recover the amount of the premium in a proper proceeding; but he cannot claim the fruits of the contract.

The demurrers were properly sustained.

Affirmed.

ANDERSON C.J., and MAYFIELD and GARDNER, JJ.,...