Newton v. Seeley

• Decision Date: 27 May 1919
• Docket Number: (No. 589.)
• Parties: NEWTON v. SEELEY et al.
• Court: North Carolina Supreme Court

99 S.E. 347

NEWTON

v.SEELEY et al.

(No. 589.)

Supreme Court of North Carolina.

May 27, 1919.

Appeal from Superior Court, Cherokee County; McElroy, Judge.

Action by Joe Newton against P. R. Seeley and the Maryland Casualty Company. From an order overruling demurrer to the complaint, the Casualty Company appeals. Reversed, and action directed to be dismissed as to the Company.

The plaintiff, who was employed by defendant F. R. Seeley, alleges that he was injured by the negligence of his employer, as set forth in the complaint. The negligence, as alleged, consisted in the failure to prop or secure in some way the sides of the cut or pit at the bottom of which the plaintiff was digging for iron ore, which caused the side wall of the pit to cave in and injure the plaintiff.

Defendant Seeley was insured by the defendant Maryland Casualty Company, and by the terms of the policy it was agreed to indemnify the assured against loss from the liability imposed by law upon it for damages on account of bodily injuries accidentally suffered by any employe, etc.

The casualty company was made a party, as a defendant, with Seeley, and the complaint alleges that Seeley is insolvent, has left the state, has no property therein, and by reason thereof the plaintin is entitled to make the casualty company a party defendant; that the contract of insurance constitutes an equitable asset of Seeley, which by an order of the court should be sequestered and applied to the satisfaction of the plaintiff's demands against him.

The casualty company demurred to the complaint, and from an order overruling it this appeal is prosecuted.

Merrimon, Adams & Johnston, of Asheville, for appellant.

Witherspoon & Witherspoon, of Murphy, for appellee.

WALKER, J. (after stating the facts as above). This case is clearly governed by Clark v. Bonsai, 157 N. C. 270, 72 S. E. 954, 48 L. R. A. (N. S.) 191, and Hensley v. Furniture Co., 164 N. C. 148, 80 S. E. 154, which were actions upon identical policies issued by the same company. In Clark v. Bonsai, supra, Justice Hoke says:

"In construing contracts of this character, the courts have generally held that, if the indemnity is clearly one against loss or damage, no action will lie in favor of the insured till some damage has been sustained, either by payment of the whole sum or some part of an employe's claim; but, if the stipulation is, in effect, one indemnifying against liability, a right of action accrues when the injury occurs, or, in some instances, when the amount and rightfulness of the claim have been established by judgment of some court having jurisdiction— this according to the terms of the policy; but, unless the contract expressly provides that it is taken out for the benefit of the injured employes and the payment of recoveries by them, none of the cases holds that an injured employe may, in the first instance, proceed directly against the insurance company."

He then adds that in all the cases upon the subject, so far as examined, a right of action arising on the policy is treated and dealt with as an asset of the insured employer, and, in the absence of an assignment from him, the employe cannot appropriate it to his claim, except by attachment, or by a bill in the nature of an equitable fieri facias, or some action in the nature of final process, incident to bankruptcy or insolvency, to subject the "right of action" to the payment of the plaintiff's claim.

We presume, and must do so, that the plaintiff's assumption that he can recover, where there has been no judgment against the assured by the employe, and no payment by it of the latter's claim, or any part thereof, is based upon the last words we have taken from the opinion in Clark v. Bonsai, supra, as to the attachment or sequestration of the assured's claim against the indemnity company. But such an inference from that language is manifestly not warranted. Before any claim can be sequestered, it must take the form of a right to sue the indemnity company, because of a loss sustained by the assured, and this right does not accrue to the assured "until some damage has been sustained, either by...