Liberty Mut. Ins. Co. v. Alsco Const., Inc., 54861

• Court: United States Court of Appeals (Georgia)
• Writing for the Court: WEBB; DEEN, P. J., and BIRDSONG
• Citation: 144 Ga.App. 307,240 S.E.2d 899
• Parties: LIBERTY MUTUAL INSURANCE COMPANY v. ALSCO CONSTRUCTION INC. et al
• Docket Number: No. 54861,No. 3,54861,3
• Decision Date: 16 November 1977

Page 899

240 S.E.2d 899 144 Ga.App. 307 LIBERTY MUTUAL INSURANCE COMPANY
v.
ALSCO CONSTRUCTION INC. et al. No. 54861. Court of Appeals of Georgia, Division No. 3. Nov. 16, 1977.
Rehearing Denied Dec. 7, 1977.

Page 901

[144 Ga.App. 312] Bennett, Gilbert, Gilbert, Whittle, Harrell & Gayner, Wallace E. Harrell, William R. Waldrop, Brunswick, for appellant.

James G. Williams, Fendig, Dickey, Fendig & Whelchel, J. Thomas Whelchel, Brunswick, for appellees.

[144 Ga.App. 307] WEBB, Judge.

Hendry Corporation in doing certain road construction rented from Alsco Construction, Inc. and John W. Alford some equipment. The latter also furnished the operating personnel for the equipment, who were paid, however, by Hendry. As a part of the rental and personnel arrangement, Alford executed and delivered to Hendry the following agreement: "I, John Alford, title Pres. of Alsco Construction, acknowledge that the operators, oilers and any other of my people you are carrying on your payroll while they are operating, serving and attending my equipment are my own personnel and I assume full responsibility for all their actions while on Hendry Corporation, I-95-Bryan County, Ga. work and especially as regards safe working conditions and the safety, protection, maintenance, care and general operation of my equipment. I accordingly hold Hendry Corporation and all other persons, firms or corporations harmless and free of liability for injury to or death of any person or persons and for loss of or damage to my equipment while working for you on above project under our equipment rental agreement even though my personnel are carried on Hendry Corporation payroll which I agree is for administrative purposes only."

While operating Alsco's equipment for Hendry, two workers were killed and Liberty Mutual as insurer for Hendry was required to pay workmen's compensation benefits to their dependents. There was no contention that the deaths were brought about by any negligent or wrongful acts of Hendry. Liberty Mutual, contending that it was subrogated to the rights of Hendry, seeks indemnity from Alsco and Alford based upon the foregoing "hold harmless" agreement. The case was submitted to the trial court on a "stipulation of facts" and the court entered judgment for Alsco and Hendry. Upon [144 Ga.App. 308] appeal we remanded "with direction that the trial court vacate the judgment, cause appropriate findings of fact and conclusions of law to be made, and enter a new judgment . . ." Liberty Mutual Ins. Co. v. Alsco Construction Co., 139 Ga.App. 786, 229 S.E.2d 559 (1976).

On remand the judgment was vacated, the case was again tried without a jury, and the court entered its judgment for Alsco and Alford. The trial court in denying Liberty Mutual's claim concluded that (1) the insurer had no right to subrogation; (2) a "stipulation" entered into before the Workmen's Compensation Board was a settlement of all claims between Liberty Mutual on the one part and Alsco and Alford on the other part as to the dependents of one of the deceased operators; and (3) the indemnity agreement was to be strictly construed in favor of the indemnitor. Liberty Mutual excepts to each of these three grounds, and on appeal enumerates them as errors.

1. Did Liberty Mutual have the right to be subrogated to the position of its insured, Hendry?

The trial court concluded, "Here the plaintiff's liability for benefits to the dependents of the deceased employees of Hendry Corporation was based on the policy of insurance and the Workmen's Compensation Act, the death of the employees being merely one of several conditions precedent to that contractual liability. Strictly speaking,

Page 902

the plaintiff was not liable 'for injury to or death of any person' within the terms of the indemnity agreement, but was liable only upon its own purely contractual undertaking to pay certain benefits pursuant to the policy and the Act."

Subrogation is a legal as well as an equitable right. It is "the substitution of another person in the place of a creditor, so that the person in whose favor it is exercised succeeds to the rights of the creditor. The substitute is put in all respects in the place of the party to whose rights he is subrogated. The doctrine is of equitable origin and benevolence. It is founded upon the dictates of refined justice. Its basis is the doing of complete, essential, and perfect justice between all the parties, without regard to form, and its object is the prevention of injustice. This right does not necessarily rest on contract or privity, but upon principles of natural equity, and does not depend [144 Ga.App. 309]...