Kinnan v. Charles B. Hurst Co.

• Decision Date: 05 June 1925
• Docket Number: No. 16263.,16263.
• Citation: 148 N.E. 12,317 Ill. 251
• Parties: KINNAN v. CHARLES B. HURST CO. et al.
• Court: Illinois Supreme Court

317 Ill. 251

148 N.E. 12

KINNAN

v.CHARLES B. HURST CO. et al.

No. 16263.

Supreme Court of Illinois.

April 24, 1925.

Rehearing Denied June 5, 1925.

Error to Appellate Court, First District, on Appeal from Superior Court, Cook County; Denis E. Sullivan, Judge.

Suit by John Kinnan against the Charles B. Hurst Company and the Globe Indemnity Company of New York. From a judgment of the Appellate Court, First District, reversing a decree for plaintiff, he brings error.

Judgment of Appellate Court reversed, and decree below affirmed.

See, also, 301 Ill. 597, 134 N. E. 72.

S. P. Douthart, Ossian Cameron, and Edward H. S. Martin, all of Chicago, for plaintiff in error.

Cassels, Potter & Bentley, of Chicago (Ralph F. Potter and Kenneth B. Hawkins, both of Chicago, of counsel), for defendant in error.

DUNN, J.

The Appellate Court for the First District reversed a decree of the superior court of Cook county requiring the Globe Indemnity Company of New York to pay $5,966.59 to John Kinnan and awarding execution therefor. The cause was remanded to the superior court, with directions to dismiss the bill, and a writ of certiorari has been allowed to Kinnan for a review of the record.

The litigation had its origin in an accidental injury which Kinnan received on September 4, 1912, while engaged in the construction of a silo for the Charles B. Hurst Company as a servant of that company, for which he brought suit and recovered a judgment against that company on April 12, 1919, for $12,625 and costs. The Hurst Company was insolvent. Executions issued against it were returned not satisfied, and no part of the judgment has been paid. The Globe Indemnity Company had issued a liability policy to the Hurst Company which was in force September 4, 1912, and Kinnan filed his creditor's bill setting forth the foregoing facts, alleging that upon the recovery of his judgment against the Hurst Company, the Globe Indemnity Company, by reason of its policy, became liable to the Hurst Company for $5,000 and interest from the date of the judgment, and praying, among other things, that the debt so due from the Globe Indemnity Company to the Hurst Company be applied to the payment of the judgment against the Hurst Company. The defendant in error, though notified of the accident and the suit, denied that the accident was covered by its policy, and refused and failed to defend the suit.

The question on which the case turns is the liability imposed by the policy on the defendant in error, the Globe Indemnity Company. The contention of the defendant in error, as stated in its brief, is that there can be no recovery against it because it never became indebted to the Hurst Company, the assured; that the policy ‘was an indemnity contract against loss or damage from liability, and, until the assured paid the loss or in some manner became damnified, no liability under the terms of the policy attached, and that the policy was solely for the benefit of the assured and was not for the benefit of any third party.’ The following are the provisions of the policy material to this controversy:

‘Globe Indemnity Company (herein called the company) in consideration of the premium herein provided and of the statements forming a part hereof, does hereby agree:

‘I. To indemnify the assured against loss from the liability imposed by law upon the assured for damages on account of bodily injuries, including death at any time resulting therefrom, accidentally suffered or alleged to have been suffered during the policy period defined in statement 6, by any employé or employés of the assured, while at the places designated in statement 4, by reason of the work therein described.

‘II. To make such investigation of all accidents reported to the company, and to which this policy applies, and to undertake such negotiations for settlement or to make such settlements of any claims for damages made against the assured, as the company may deem advisable, and, in the event that suit is brought against the assured, to defend such suit, even if groundless, in the name and on behalf of the assured, unless or until the company shall elect to effect settlement thereof.

‘III. To pay all expense of the company's investigation and adjustment of claim, all costs taxed against the assured in any legal proceeding defended by the company, and all intertest accruing after entry of judgment upon such part thereof as shall not be in excess of the company's limit of liability as appears in this policy, and

‘IV. To pay for such immediate surgical relief as shall be imperative at the time of the accident. The foregoing agreements are subject to the following conditions:

‘A. The company's liability under this policy, whether it be issued in the name of one assured or of more than one assured, shall be limited to the sum of $5,000 on account of bodily injuries to or the death of one employé, and subject to the same limit for each employé the company's liability shall be limited to the sum of $10,000 on account of bodily injuries to or the death of more than one employé as the result of one accident, but in addition to these limits the company will pay all sums for which the company may be liable under insuring agreements III and IV.

* * *

‘G. The assured, upon the occurrence of an accident, shall give immediate written notice thereof, with the fullest information obtainable at the time, to the home office of the company or to its duly authorized representative. The assured shall give like notice will full particulars of any claim made on account of such accident. If any suit is brought against the assured to enforce such claim, the assured shall immediately forward to the home office of the company every summons or other process that may be served upon the assured.

‘H. The assured shall not voluntarily assume any liability, nor incur any expense other than for immediate surgical relief, nor settle any claim, except at the assured's own cost. The assured shall not interfere in any negotiation for settlement, nor in any legal proceeding, but, whenever requested by the company, the assured shall aid in securing information and evidence and the attendance of witnesses, and shall co-operate with the company, except in a pecuniary way, in all matters which the company may deem necessary in the defense of any suit or in the prosecution of any appeal.

‘I. No action for the indemnity against loss provided for in insuring agreement I of this policy shall lie against the company, except for reimbursement of the amount of loss actually sustained and paid in money by the assured in full satisfaction of a judgment duly recovered against the assured after trial of the issue, nor unless brought within two years after such judgment shall have been paid. No action to recover under any other insuring agreement shall lie against the company unless brought within twelve months after the right of action accrues.’

[1][2]The agreement in paragraph I of the policy, ‘to indemnify the assured against loss from the liability imposed by law upon the assured for damages on account of bodily injuries,’ etc., together with the condition contained in subdivision I of paragraph IV of the policy, that ‘no action for the indemnity against loss provided for in insuring agreement I of this policy shall lie against the company, except for reimbursement of the amount of loss actually sustained and paid in money by the assured in full satisfaction of a judgment duly recovered against the assured after trial of the issue,’ etc., clearly provides only for the reimbursement of money actually paid in satisfaction of a judgment recovered against the assured after the trial of the issue, in an action for bodily injuries alleged to have been accidentally suffered within the terms of the policy. Davison v. Maryland Casualty Co., 197 Mass. 167, 83 N. E. 407;Connolly v. Bolster, 187 Mass. 266, 72 N. E. 981;Cushman v. Carbondale Fuel Co., 122 Iowa, 656, 98 N. W. 509;Puget Sound Improvement Co. v. Frankfort Ins. Co., 52 Wash. 124, 100 P. 190;Coast Lumber Co. v. AEtna Life Ins. Co., 22 Idaho, 264, 125 P. 185;Frye v. Bath Gas & Electric Co., 97 Me. 241, 54 A. 395,59 L. R. A. 444, 94 Am. St. Rep. 500;Finley v. United States Casualty Co., 113 Tenn. 592, 83 S. W. 2, 3 Ann. Cas. 962; Stenbom v. Brown-Corliss Engine Co., 137 Wis. 564, 119 N. W. 308,20 L. R. A. (N. S.) 956. The Hurst Company, the assured in the policy, could not maintain an action on this agreement until it had sustained a loss for which a judgment had been recovered and which it had paid. The plaintiff in error had no connection with the policy, which was not issued for his benefit, and could under no circumstances maintain an action on it. Connolly v. Bolster, supra; Cushman v. Carbondale Fuel Co., supra; Finley v. United States Casualty Co., supra; Stenbom v. Brown-Corliss Engine Co., supra. If, however, the Hurst Company had a cause of action which it could enforce against the defendant in error, whether upon this policy or for some other cause, the plaintiff in error had a right, in equity, to compel the application of the proceeds of such cause of action to the payment of his judgment against the Hurst Company.

[3] The policy, however, contained other agreements on the part of the defendant in error to which the condition of actual payment in satisfaction of a judgment did not apply. By paragraph II of the policy the defendant in error greed ‘to make such investigation of all accidents reported to the company and to which this policy applies, and to undertake such negotiations for settlement or to make such settlements of any claims for damages made against the assured, as the company may deem advisable, and, in the event that suit is brought against the assured, to defend such suit, even if groundless, in the name and on behalf of the assured, unless or until the company shall elect to effect settlement thereof.’ Conditions H and I of paragraph IV prohibited the...