Illinois Automobile Ins. Exch. v. Braun

• Decision Date: 19 May 1924
• Docket Number: 25
• Citation: 124 A. 691,280 Pa. 550
• Parties: Illinois Automobile Insurance Exchange v. Braun et al., Appellants
• Court: Pennsylvania Supreme Court

124 A. 691

280 Pa. 550

Illinois Automobile Insurance Exchange v. Braun et al., Appellants

No. 25

Supreme Court of Pennsylvania

May 19, 1924

Argued April 21, 1924

Appeal, No. 25, Jan. T., 1925, by defendants, from judgment of C.P. No. 3, Phila. Co., Dec. T., 1922, No. 2759, on verdict for plaintiffs, in case of Illinois Automobile Insurance Exchange v. Nickolaus Braun and Joseph Siegl trading as Braun & Siegl. Affirmed.

Assumpsit to recover back money paid for loss of truck. Before FERGUSON, J.

The paper, referred to in the opinion, which was signed by the attorneys for appellants and appellee at the time the verdict recovered by appellants was paid, was as follows:

"Philadelphia June 12, 1922.

"Received of Johnson, Gilkyson & Freeman defendant's check in the above matter in the sum of $2,794, being the amount of the verdict rendered for plaintiffs in the above case.

"An order to satisfy the judgment is given to Johnson, Gilkyson & Freeman, with the understanding that same shall remain in their possession and shall not be used until the court costs due in the above case by defendant are paid.

"Plaintiffs above named have instituted an action in trespass against the Baltimore & Ohio Railroad Company in the District Court of the United States for the Eastern District of Pennsylvania, as of September Session, 1921, No. 8722. Plaintiffs have in said last named suit already expended the sum of $130.00, exclusive of counsel fees. Defendant above named, an insurance exchange, insured the truck which was damaged in the collision with the railroad train, which collision forms the basis for said last named suit in the District Court. It is agreed that if plaintiffs recover a verdict and receive payment thereof in said suit against the railroad company, that the Illinois Automobile Insurance Exchange shall receive out of the money so recovered from said railroad company by plaintiffs the amount of the judgment in C.P. No. 4 paid by the insurance exchange to plaintiffs, subject to the conditions hereinafter set forth.

"The insurance exchange agrees to advance to Braun & Siegl the sum of $130.00, being expenses to date incurred in plaintiffs' suit against the B. & O. Railroad, exclusive of counsel fee. In the event that said suit be won, the first $1000 recovered is to go toward costs and then toward counsel fee. The balance is to go to the insurance exchange up to the amount paid by them in the C.P. No. 4 suit. The remainder is to go to Braun & Siegl. If no recovery is had against the B. & O. Railroad the insurance exchange is to pay two-thirds of a reasonable insurance exchange is to pay two-thirds of a reasonable counsel fee, which fee shall not exceed $500.

"Plaintiffs above named will render all reasonable assistance to their counsel in said suit in the District Court.

"G. Von Phul Jones, Attorney for Braun & Siegl.

"Approved by -- Johnson, Gilkyson & Freeman

By Paul Freeman.

"Subject to Confirmation of Illinois Auto Ins. Exchange."

This paper was not signed by the Insurance Exchange. It was offered in evidence on the trial, but not admitted.

Other facts appear by the opinion of the Supreme Court.

Judgment on directed verdict for plaintiff for $2,767.02. Defendants appealed.

Error assigned was direction for plaintiff, quoting record.

The assignments of error are overruled and the judgment is affirmed.

G. Von Phul Jones, with him Owen J. Roberts, for appellants. -- There was no right of subrogation: Forest Oil Co.'s App., 118 Pa. 138.

Assuming that plaintiff had a right of subrogation, it waived such right by its actions.

Assuming there was a right of subrogation, there was no right to recover the amount of the verdict previously paid: Nat. F. Ins. Co. v. McLaren, 12 Ont. Rep. 682; Shawnee Ins. Co. v. Cosgrove, 85 Kans. 296.

Plaintiff cannot recover money paid by it and due on a judgment because of an alleged subsequent violation of its rights: Finnell v. Brew, 81 Pa. 362; Herring v. Adams, 5 W. & S. 459.

Francis Chapman, with him Thomas E. Comber, Jr., for appellee. -- Where a creditor has the means of compelling payment from the principal debtor, and by his own act gives it up, he thereby discharges the surety, and if the surety has paid the loss to the creditor he is entitled to recover the moneys paid: Highlands v. Fire Ins. Co., 203 Pa. 134; Cathcart's App., 13 Pa. 416, 420; Holt v. Bodey, 18 Pa. 207, 212; Templeton v. Shakley, 107 Pa. 370; Niagara Fire Ins. Co. v. Fidelity, etc., Co., 123 Pa. 516; Fidelity T. & T. v. Gas Co., 150 Pa. 8; Darrell v. Tibbitts, 2 Q.B. 560; West of England Fire Ins. Co. v. Isaacs, 1 Q.B. 226.

Before MOSCHZISKER, C.J., WALLING, SIMPSON, SADLER and SCHAFFER, JJ.

OPINION

MR. JUSTICE SCHAFFER:

Defendants appeal from a judgment obtained in an action brought by the Illinois Automobile Insurance Exchange to recover back the amount it had paid to them for the loss of a truck destroyed in a collision with a train of the Baltimore & Ohio Railroad Company. The trial judge gave binding instructions in plaintiff's favor.

Following the loss of the truck, suits were simultaneously brought against the insurance exchange and the railroad company. The exchange defended the action brought against it, on the ground, that the policy was void, because the insured had violated a provision forbidding the transportation of intoxicating liquor in the truck. The trial of that issue resulted in a verdict against the insurance exchange, the amount of which it subsequently paid to appellants. The suit brought against the railroad company comprehended not only a claim for damage done to the truck, but in addition, for the destruction of its contents; so far as the latter was concerned, the policy did not cover it.

The subrogation clause reads: "Upon the payment of loss, damage and/or expense under this policy, the exchange shall be subrogated to all rights of the assured against any person, firm or corporation, as respects such loss, damage and/or expense to the amount of such payment and the assured shall execute all papers required and shall cooperate with the exchange to secure the exchange such rights."

After appellants had been paid the amount of their recovery against the insurance exchange, they proceeded with the suit against the railroad company. Although the exchange knew this action was pending, it was not aware of any negotiations for settlement between the insured and the railroad company. Prior to trial and without notice to or the acquiescence of the exchange, the action was settled for $750. The insured received that sum and a verdict was rendered by agreement in favor of the railroad company. Upon learning of the outcome of this litigation, the appellee brought this action against appellants to recover the amount paid on the policy, and acting under the court's instructions, the jury found against them.

Had the insured made settlement with the railroad company before claiming from their insurer, they could not have compelled the latter to respond (Niagara Fire Ins. Co. v. Fidelity, etc., Co., 123 Pa. 516; Highlands v. Cumberland Valley Farmers' Mutual Fire Ins. Co., 203 Pa. 134), and it is difficult to state a satisfying reason why, having without the acquiescence of the exchange released the tort feasor, which caused the loss, after receiving the insurer's money, they should be in better case than they would have been had the release been before receiving the money, as they have put it beyond the power of the insurer to obtain anything from the causer of the loss.

Appellants contend there is no right of subrogation because the property covered by the policy and that represented in the suit against the railroad company was not the same. We are not impressed with this argument, first, for the reason that when appellants received the exchange's money, they recognized its right to be subrogated to the amount paid, by a paper signed by their attorney, stating the terms on which they would prosecute the suit against the railroad company, which terms were not satisfactory to the exchange, and, secondly because, when they settled with the railroad company, no separation of the items of damage was made and therefore the part of the gross sum representing loss on the truck could not be ascertained. Appellants could not be permitted to jeopard appellee's position by mixing up the claims and making a lump settlement and then set up this as a reason against appellee's recovery. "Where a loss partially...