Ohio Cas. Ins. Co. v. Gantt

• Decision Date: 11 October 1951
• Docket Number: 6 Div. 192
• Citation: 256 Ala. 262,54 So.2d 595
• Parties: OHIO CAS. INS. CO. v. GANTT.
• Court: Alabama Supreme Court

Page 595

54 So.2d 595

256 Ala. 262

OHIO CAS. INS. CO. v.GANTT.

6 Div. 192.

Supreme Court of Alabama.

Oct. 11, 1951.

London & Yancey and Chas. W. Greer, Birmingham, for appellant.

Taylor, Higgins, Windham & Perdue, Birmingham, for appellee.

FOSTER, Justice.

The question on this appeal is whether or not a judgment will support an equity suit by the plaintiff against defendant's liability insurance carrier when the judgment was rendered in the trial court for a fixed sum against the insured in the policy, but an appeal had been taken without supersedeas when this suit in equity was filed by plaintiff in the judgment under authority of section 12,Title 28, Code.

That statute makes a statutory hypothecation of the claim of the defendant against his insurer to protect him against liability to the extent of the coverage.George v. Employers' Liability Assur. Corp., 219 Ala. 307, 122 So. 175, 72 A.L.R. 1438;Employers' Ins. Co. of Alabama v. Johnston, 238 Ala. 26, 189 So. 58;Lorando v. Gethro, 228 Mass. 181, 117 N.E. 185, 1 A.L.R. 1374.

Section 12, supra, confers upon the injured person a right to recover against defendant's liability insurance carrier 'the insurance money provided for in the contract of insurance''upon the recovery of a final judgment against any person' if he was insured against loss or damage at the time the right of action arose.

The policy bound insurer 'To pay on behalf of insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law for damages, including damages for care and loss of services, because of bodily injury, including death at any time resulting therefrom, sustained by any person or persons, other than passengers, caused by accident and arising out of the ownership, maintenance or use of the aircraft.'

And it further provided that: 'No action shall lie against the company unless, as a condition precedent thereof, the insured shall have fully complied with all of the terms of this policy, nor until the amount of insured's obligation to pay shall have been finally determined either by judgment against insured after actual trial or by written agreement of the insured, the claimant and the company.Any person or his legal representative who has secured such judgment or written agreement shall thereafter be entitled to recover under the terms of this policy in the same manner and to the same extent as the insured.Nothing contained in this policy shall give any person or organization any right to join the company as codefendant in any action against insured to determine insured's liability.'(Italics ours.)

Plaintiff in the judgment is not seeking to enforce the assignment provided for in this clause, but only the equitable remedy and right provided in section 12,Title 28, Code.So that according to the terms of the policy defendant insured can sue the insurer who has become obligated to pay insured by reason of the liability imposed by law for damages and death because of bodily injury sustained by plaintiff arising out of the ownership, maintenance or use of the aircraft, if plaintiff was not a passenger, to the limit of $25,000, and if insured had complied with the terms of the policy, and the amount of his obligation to pay shall have been finally determined by judgment against insured after actual trial.

The policy also provided that insurer shall defend any suit against insured for damages on account of such injury and pay all premiums on appeal bonds required in any such defended suit, but without obligation to apply for or furnish such bonds.So that whether insured, against whom a judgment is rendered, shall appeal is within his discretion.And if he appeals whether he will supersede the judgment is also in his discretion.It does not appear that the insurer offered to supersede the judgment on appeal or to pay the premium on a supersedeas appeal bond.It cannot therefore complain that insured in taking the appeal did not give a supersedeas bond.If defendant, insured, had not appealed at all, there is no question but that the judgment finally fixed the obligation of insured and fastened the amount of it on insurer, if it was within the coverage.

The question now to be considered is whether there was a final judgment within the meaning of the statute, and whether the liability of the insurer to the insured had accrued.

Section 792,Title 7, Code, authorizes an appeal without supersedeas.When such an appeal is taken by defendant the right of plaintiff to collect the amount of the judgment is not suspended pending the appeal, and he has a right to have execution issued to force its payment.Montgomery Gaslight Co. v. Merrick, 61 Ala. 534;Garrett v. Mayfield Woolen Mills, 153 Ala. 602, 44 So. 1026.At common law security for costs had the effect of a supersedeas.Ex parte Cudd, 195 Ala. 80, 70 So. 721.But we have several statutes which change that rule.Sections 793,794and795,Title 7, Code.

So that pending such an appeal, taken only by giving security for costs, 'Whatever measures are necessary for the execution of the decree, it is the duty of the [trial] court, on the application of a party in interest, to pursue as if the appeal had not been taken.'Ex parte Hood, 107 Ala. 520, 18 So. 176, 177;Garrett v. Mayfield Woolen Mills, supra.

By virtue of the statuteplaintiff in the judgment had the right to condemn in equity to its satisfaction any matured claim which defendant as insured had by reason of his policy against the insurer, this appellant.So that the instant question is controlled by whether after such appeal without supersedeas, defendant in that suit could have immediately sued on a claim against appellant by reason of its liability under the policy.If defendant could have done so, plaintiff's right to subject that claim to the satisfaction of his judgment was not suspended by the appeal.But if the liability of the insurer to the insured did not mature by the terms of the policy until there was a decision on the appeal favorable to plaintiff in the judgment, it necessarily follows that plaintiff could not condemn it to satisfy his judgment pending the appeal.In that event, there would be no matured liability to condemn.

The appellate court of Illinois treated that question in a garnishment proceeding in Ancateau for Use of Trust Co. of Chicago v. Commercial Casualty Ins. Co., 318 Ill.App. 553, 48 N.E.2d 440, 445.It was held that the rights of the insurer not a party to the suit at law should not 'be measured by the same yard-stick during the pendency of an appeal as the rights of the litigants against each other,' and that during such appeal the insured could not have maintained a suit on the policy by reason of its terms and, therefore, plaintiff could not enforce such claim pending the appeal.

In Roberts v. Central Mutual Ins. Co., 285 Ill.App. 408, 2 N.E.2d 132, plaintiff had recovered a judgment against a taxicab operator for injuries.The defendant had made liability bond pursuant to law.Plaintiff sued on the bond pending an appeal by the tort defendant.The condition of the bond was that the defendant would pay all final judgments recovered against such owner for any injury to or death of any person resulting from negligence of such owner.An appeal was taken from the judgment before suit on the bond was begun.It does not appear whether there was a supersedeas.But the statute provided that an appeal 'shall constitute a continuation of the proceeding in the court below.'S.H.A.Ill. ch. 110, § 198.The court held that a final judgment in the meaning of the bond meant the judgment made final on appeal, and that the suit was prematurely begun, and reversed the judgment for that reason, although the appellate court had affirmed the judgment in the tort action.

It is apparent that much effect was given to the statute which made an appeal a continuation of the proceeding in the court below.Such is not the effect of an appeal in this State.But it is the institution of a new statutory proceeding whose object is to reverse the judgment below.Anders Bros. v. Latimer, 198 Ala. 573, 73 So. 925;Ex parte Ide, 228 Ala. 452, 153 So. 887.It was said in the Idecase, supra, that there is a conflict of authority on that question.But this Court in the Anders Case, supra, took a distinct stand on it, so that the theory which supported the Robertscase, supra, has not been adopted but repudiated by our cases.

It is interesting to note the conflicting opinions on the subject and the variety of views expressed.Some of them relate to the inquiry of whether pending the appeal from a judgment in the tort action, when there is no supersedeas, the defendant in the tort judgment could sue the insurer on the policy and whether he was liable then and there for the immediate payment of the judgment which he had insured.That seems to us to be the appropriate inquiry.It depends upon the terms of the policy.If its effect is not to prohibit such suit it can be maintained pending an appeal without supersedeas.Montgomery Gaslight Co. v. Merrick, supra.

In the case of Consolidated Underwriters v. Richards, 276 Ky. 275, 124 S.W.2d 54, it was held that the defendant could sue pending the appeal by reason of the terms of the policy, which required the insurer not only to defend the suit against the insured but also to pay all necessary premiums on the appeal bond; and that the insolvency or bankruptcy of insured would not affect the liability of the insurer.Therefore, a suit by plaintiff in judgment against the insurer on a policy, in all...