Hoosier Cas. Co. v. Miers

• Decision Date: 29 May 1940
• Docket Number: 27408.
• Parties: HOOSIER CASUALTY CO. v. MIERS et al.
• Court: Indiana Supreme Court

27 N.E.2d 342

217 Ind. 400

HOOSIER CASUALTY CO. v. MIERS et al.

No. 27408.

Supreme Court of Indiana

May 29, 1940

Frank A. Symmes and Owen S. Boling, both of Indianapolis, and Bagot, Free & Morrow, of Anderson, for appellant.

Charles B. Salyer, Samuel E. Johnson, and Sid M. Cleveland, all of Anderson, for appellee.

TREMAIN Judge.

This action was filed by appellee Miers against the appellant to recover on an indemnity insurance contract issued by the appellant to the appellee Peterson. The cause was tried by the court upon a stipulation of facts resulting in a judgment for the appellee. The single error assigned on appeal is the overruling of appellant's motion for a new trial.

The stipulation of facts discloses that on the 30th day of November, 1934, while the policy issued by the appellant was in full force and effect, the appellee Miers was an employee of his coappellee as a bartender at a salary of eighteen dollars per week; that Miers worked from 4 o'clock P. M. to 11 o'clock P. M., and was on the payroll of Peterson at the time; that Peterson invited Miers to be his guest on a hunting trip on that day, and used his Ford automobile as a means of transportation; that, in returning that afternoon about 2 o'clock, Peterson carelessly, negligently, and wantonly drove his automobile from the highway and against a telephone pole, whereby Miers sustained injuries for which he recovered damages; that under the terms of the policy the appellant was required to and did furnish attorneys to make the defense for Peterson; that after Miers recovered judgment he caused execution to be issued against Peterson, which was returned 'no property found', and thereafter filed this suit against the appellant and his coappellee, based upon said insurance policy.

The stipulation of facts is quite lengthy, and recites all the details in connection with the trial of the original cause of action and subsequent proceedings, as well as containing a copy of the policy of insurance. It recites that notwithstanding the fact that Miers filed his action upon the theory that he was a guest of Peterson at the time he sustained the injury, nevertheless, the appellant knew that in fact Miers was an employee of Peterson.

The liability clause of the policy provides coverage as follows 'Loss directly resulting to Assured herein by reason of the liability imposed by law upon the Assured for damages on account of bodily injuries (including death resulting therefrom) accidentally inflicted upon any person or persons, during the policy period * * * the Company will also pay the costs and expense attendant upon the investigation, adjustment and settlement of claims, all costs taxed against the Insured in any legal proceedings defended by the Company as provided herein, and all interest accruing after entry of judgment upon such part thereof as shall not be in excess of the Company's liability as herein expressed; * * * and to defend in the name and on behalf of the Assured all suits thereon, whether groundless or not.'

This provision is followed by the extended omnibus coverage clause. The policy contains the following exclusion clause: '4-A Under clause V pertaining to liability any employees of the assured and/or his family or members of his household are excluded.'

It is stipulated that the appellant denied liability upon the ground that the appellee Miers was an employee of his coappellee at the time, and for that reason it was not answerable to the appellee for the amount of judgment recovered. It is further stipulated that it is appellee's contention that he was employed to work from 4 o'clock P. M. to 11 o'clock P. M.; that at all other times he was free to go and pursue any business or pleasure he chose; that he was not under the control or subject to the orders of Peterson; that the injury did not arise out of his employment; that, when his employer invited him as a guest to ride in the automobile covered by the insurance policy, he was in no wise bound as an employee, but was a mere guest.

Whether Miers was an employee of his coappellee at the time of injury so as to relieve the appellant from liability under the policy is the principal question to be decided. It is asserted that, by reason of the fact that appellant appeared and defended the cause filed against Peterson, it thereby was estopped from defending against this action, and that the question of its liability was adjudicated in the first action. It is true ordinarily that one who is required to protect another from liability is bound by the result of the litigation to which such other is a party, provided the former had notice of such litigation and an opportunity to control its proceedings. A judgment against a party indemnified is conclusive in a suit against his indemnitor only as to the facts therein established. The estoppel created by the first judgment cannot be extended beyond the issues necessarily determined by it. The appellant defended the first action on behalf of the insured on the theory that Miers was his guest. Even if the appellant had notice of the employment of Miers by Peterson, nevertheless, under the terms of the policy, it was bound to make the defense whether the action was 'groundless or not'. Appellant is not estopped from making a defense to this action. 14 R.C.L. 62, Indemnity § 21; State Farm Mutual Automobile Ins. Co. v. Phillips, 1936, 210 Ind. 561, 2 N.E.2d 989.

Neither the appellant nor the appellee has directed attention to any authority defining the word 'employee' when used in the sense and in the connection in which it is used in the insurance contract which forms the basis of this...