Miholevich v. Mid-W. Mut. Auto Ins. Co.

• Decision Date: 03 January 1933
• Docket Number: No. 163.,163.
• Citation: 246 N.W. 202,261 Mich. 495
• Parties: MIHOLEVICH v. MID-WEST MUT. AUTO INS. CO.
• Court: Michigan Supreme Court

261 Mich. 495

246 N.W. 202

MIHOLEVICH

v.MID-WEST MUT. AUTO INS. CO.

No. 163.

Supreme Court of Michigan.

Jan. 3, 1933.

Appeal from Circuit Court, Wayne County; Theodore Richter, Judge.

Action by Tom Miholevich against the Mid-West Mutual Auto Insurance Company. Judgment for plaintiff, and defendant appeals.

Affirmed.

Argued before the Full Bench.

Stewart A. Richard, of Detroit, for appellant.

Peter P. Boyle, of Detroit, for appellee.

SHARPE, J.

The following ‘statement of facts' appears in the brief of the appellant:

‘The above cause has reached this court on case made. Briefly stated, the essential facts are:

‘Plaintiff procured of the defendant a policy of insurance which defendant admits is a liability coverage rather than indemnity. A judgment was rendered against the plaintiff, within the limits of the policy of insurance, while he was represented in court by the defendant, such action arising out of an automobile collision during the life of the said policy of insurance. The defendant later caused payment of the judgment to be made in full and obtained a release from the judgment creditor. Payment to the judgment creditor, however, was not made until after the plaintiff had been confined in the county jail by virtue of a body execution.’

We add thereto, from the facts as agreed upon: ‘Defendant admitted the allegations of the declaration and that it had wilfully neglected to satisfy the judgment. Plaintiff testified he had had no means with which to satisfy said judgment.’

The plaintiff was confined in the jail from June 1 until June 6, 1931, and after his release he brought this action for breach of the contract on the part of the defendant, claiming damages in the amount of the judgment recovered against him and for his arrest and imprisonment. Pending the hearing, the defendant satisfied the judgment. The case proceeded to trial before the court without a jury, and resulted in a judgment for the plaintiff for $1,000, of which the defendant here seeks review by appeal.

The question involved, as stated by defendant's counsel, is: ‘Has the assured a right of action against the company for anything other than the face value of the policy together with interest upon its failure to seasonably satisfy judgment against the assured?’

Counsel rely upon the holding in Clark v. Craig, 29 Mich. 398, 402, that: ‘For any mere delay in payment, interest is in law regarded as a sufficient compensation.’

That this is the general rule admits of no doubt, but it will be observed that in that case the court said: ‘There is no evidence which shows culpable delay. * * *’

In Alderton v. Williams, 139 Mich. 296, 300, 102 N. W. 753, 755, it was said: ‘In such cases the law presumes that the borrower can obtain money elsewhere, and the increased rate of interest therefore furnishes full compensation for his damages.’

But, in that case, where a party defaulted in contributing to a joint adventure, it was held that ‘he is liable for substantial damages.’

As stated by defendant's counsel, the coverage was liability and not indemnity. When the judgment was recovered against the plaintiff, a liability to satisfy it was imposed upon him by law. If unable to pay it, as it is conceded he was, the plaintiff in that action had the right to, and did, resort to a writ of capias ad satisfaciendum or body execution in an effort to enforce payment, and, as a result thereof, plaintiff was incarcerated for several days.

Under such a policy, when judgment was recovered against the insured, the amount thereof became due and payable from the insurer to him ‘and it was the legal duty of the company to pay it.’ Voss v. Stranahan, 248 Mich. 390, 392, 227 N. W. 542, 543. Until payment was made, it might have been garnisheed by the judgment creditor. Kipkey v. Casualty Association, 255 Mich. 408, 409, 238 N. W. 239.

In Anoka Lumber Co. v. Fidelity & Casualty Co., 63 Minn. 286, 65 N. W. 353, 355,30 L. R. A. 689, where an action was brought by the insured against the...