Leaksville Light & Power Co v. Ga. Cas. Co

• Decision Date: 27 April 1927
• Docket Number: (No. 362.)
• Citation: 137 S.E. 817
• Court: North Carolina Supreme Court
• Parties: LEAKSVILLE LIGHT & POWER CO. v. GEORGIA CASUALTY CO.

(193 N.C. 618)

137 S.E. 817

LEAKSVILLE LIGHT & POWER CO.

v.GEORGIA CASUALTY CO.

(No. 362.)

Supreme Court of North Carolina.

April 27, 1927.

Appeal from Superior Court, Rockingham County; Oglesby, Judge.

Suit by the Leaksville Light & Power Company against the Georgia Casualty Company. Prom a judgment on the pleadings for defendant, plaintiff appeals. Affirmed.

Civil action to reform a contract of insurance and to recover upon it as, if, and when reformed.

On May 24, 1921, the defendant, a Georgia corporation, issued to the plaintiff at Leaksville, N. C, a policy of insurance indemnifying the assured against claims for bodily injuries, etc., suffered by any one, not an employee of the plaintiff, by reason of the operation of its light and power plant. The policy provides that it "does not cover loss arising from injuries or death, caused by any draft or any driving animal or any vehicle or by any person while in charge thereof."

While said policy was in force, one John J. Robertson, not an employee of the plaintiff, was injured by the negligent operation of one of plaintiff's trucks, which was being driven along a public highway, loaded with electric light poles intended for use in plaintiff's business.

Suit was brought by the said John J. Robertson against the plaintiff and finally set tled by compromise judgment for $5,000, agreed by all to be a fair settlement.

Thereafter the plaintiff brought suit against the defendant in the superior court of Rockingham county to recover the amount paid Robertson in settlement of his claim for personal injuries, the plaintiff contending that the policy covered the injury to Robertson, while the defendant contended that it did not. The facts not being in dispute, a jury trial was waived and the matter submitted to the court on facts agreed,. among which appears the following:

"It is agreed between the plaintiff and defendant that the liability of the defendant and the right of the plaintiff to recover of it in this action depends upon the construction which the court shall give to the contractors' public liability policy herein sued upon, a copy of which is hereto attached, marked Exhibit A, and made a part of this statement of facts."

Judgment was rendered in that case, holding that the policy did not cover the injuries sustained by Robertson. This was affirmed on appeal. Power Co. v. Casualty Co., 188 N. C. 597, 125 S. E. 123.

Later, the plaintiff instituted this action to reform the policy, alleging that it was intended to cover claims for injuries such as those sustained by Robertson, and seeks to recover upon the policy as thus reformed. The defendant pleads res adjudicata and estoppel by judgment, or estoppel by election of remedies made with full knowledge of the facts.

From a judgment on the pleadings in favor of defendant, the plaintiff appeals, assigning errors.

King, Sapp & King and Brooks, Parker, Smith & Hayes, all of Greensboro, for appellant.

John N. Wilson, of Greensboro, for appellee.

STACY, C. J. (after stating the facts as above). The appeal presents, for the first time in this jurisdiction, the single question as to whether a party, with full knowledge of his rights, who brings an action to recover on a policy of insurance as it is written and loses in said action, may thereafter maintain a suit in equity to reform the contract and recover upon it as, if, and when reformed.

According to the clear weight of authority in other jurisdictions, where the question has been considered, the rule is that when a party brings an action at law to recover on a contract as written, and proceeds to trial, verdict, and judgment in that suit, he cannot thereafter, while said judgment is still in force, institute proceedings in equity to reform the contract and recover upon it as reformed. It is generally held that one whoelects to sue on an instrument as it is written, and fails in such suit, is bound by the election which he thus makes to stand by the contract, and he cannot thereafter maintain an action to reform the contract and recover upon it as reformed. The two remedies are inconsistent, since the one affirms and the other seeks to disaffirm the contract. Royal Ins. Co. v. Stewart, 190 Ind. 444, 129 N. E. 853; Washburn v. Ins. Co., 114 Mass. 175; Thwing v. Ins. Co., 111 Mass. 93; Steinbach v. Ins. Co., 77 N. Y. 498, 33 Am. Rep. 655; Thomas v. Ins. Co., 108 Ill. App. 278; Thomas v. Joslin, 36 Minn. 1, 29 N. W. 344. 1 Am. St. Rep. 624; 2 Black on...