Lowe v. Fidelity & Cas. Co. of N. Y.

• Decision Date: 15 December 1915
• Docket Number: 516.
• Citation: 87 S.E. 250,170 N.C. 445
• Parties: LOWE v. FIDELITY & CASUALTY CO. OF NEW YORK.
• Court: North Carolina Supreme Court

87 S.E. 250

170 N.C. 445

LOWE v. FIDELITY & CASUALTY CO. OF NEW YORK.

No. 516.

Supreme Court of North Carolina

December 15, 1915

Appeal from Superior Court, Avery County; Harding, Judge.

Action by J. R. Lowe, receiver of the Linville Bobbin Company against the Fidelity & Casualty Company of New York. Judgment on agreed statement of facts, and plaintiff and defendant both appeal. Affirmed on each appeal.

Clark C.J., dissenting.

An insurer, which on notice of the death of the insured's employee and of action for damages denied its liability on the contract to the insured, could not thereafter require notice as to when the action was begun.

L. D Lowe, of Banner's Elk, W. C. Newland, of Lenoir, and S. J. Ervin, of Morganton, for plaintiff.

Harrison Baird, of Elk Park, and Lee F. Miller, of Elizabethtown, Tenn., for defendant.

Plaintiff's Appeal.

BROWN J.

This action is brought on an indemnity bond to recover the amount of a judgment, rendered against the bobbin company in favor of Mary Marcus, administratrix of Harlan Marcus, for the negligent killing of her intestate, for the sum of $6,650; the limitation in the bond sued on being $5,000. The defense is: (1) That the insured failed to forward to defendant the summons and process served on insured when the action was commenced; (2) that the contract sued on is one of indemnity against loss, and not against liability, and that plaintiff has not paid the judgment.

In regard to the first defense, the facts are: That upon the death of the said Harlan Marcus the Linville Bobbin Company notified the defendant of the death of the said Harlan Marcus and demanded that said company comply with the terms of its contract evidenced by said policy, notifying the defendant that a suit was about to be instituted for the recovery of damages, and the said defendant disclaimed any liability under the terms of said policy, declaring, as its reason for declining to recognize any liability imposed upon it under the terms of said policy, that under the statute of North Carolina they were not liable under the terms of said policy on account of the death of said Harlan Marcus on the ground that, as it contended, the said Harlan Marcus was under the age of 14 years. That thereafter, when the said action was begun against the Linville Bobbin Company for the recovery of damages on account of his alleged negligent killing, the Linville Bobbin Company gave no notice of the institution of said action to the defendant; said failure to give said notice being due to the fact that the said defendant had theretofore refused and declined to recognize any liability under the terms of said policy. That the said suit was defended by the counsel employed by J. R. Lowe, receiver of the Linville Bobbin Company, to conduct said defense, without the aid or assistance of the defendant. It is contended by defendant that this was not intended as a denial of all liability to the insured upon the contract, but only a denial of the liability of the insured for the death of the employé. The language of the finding does not support the contention. In our opinion the defendant denied its liability on the contract to the insured.

Consequently, the insured was relieved from the duty of forwarding the process served on it. An insurance company cannot deny all liability under a contract of insurance, and then be heard to say, after it has repudiated the contract, that assured should have given it notice when the action was instituted, so that it could have defended the action, in accordance with the terms of the contract. Having denied any liability under the policy, it was neither necessary nor proper to notify defendant again. Gerringer v. Insurance Co., 133 N.C. 407, 45 S.E. 773; Lanier v. Insurance Co., 142 N.C. 14, at page 18, 54 S.E. 786; Higson v. Insurance Co., 152 N.C. 206, 67 S.E. 509; Jordan v. Insurance Co., 151 N.C. 341, 66 S.E. 206.

Upon the second ground of defense, we are of opinion that plaintiff is not entitled to recover the $5,000. The contract does not indemnify the assured against liability, but only against actual loss. It is admitted that the judgment has not been paid. That being so, the plaintiff has suffered no loss and cannot recover.

It is held by this and other courts that:

"When a contract of indemnity is clearly against loss, no action will lie in favor of the insured until some damage has been sustained, either by the payment of the whole or some part of the employé's claim." Clark v. Bonsal, 157 N.C. 270, 72 S.E. 954, 48 L. R. A. (N. S.) 191; Hensley v. Furniture Co., 164 N.C. 151, 80 S.E. 154; Finley v. Casualty Co., 113 Tenn. 598,

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