Philadelphia Fire & Marine Ins. Co. v. City of Grandview, 32179

Decision Date02 April 1953
Docket NumberNo. 32179,32179
Citation42 Wn.2d 357,255 P.2d 540
CourtWashington Supreme Court

Rode, Cook, Watkins & Orth and Richard D. Hamilton, Seattle, for plaintiff.

Walter V. Swanson and Douglas A. Wilson, Yakima, Gavin, Robinson & Kendrick, Yakima, for defendants.

WEAVER, Justice.

This action is a garnishment.

Respondent, Royal Insurance Company, Ltd., has an unsatisfied judgment against defendants, the city of Grandview and Earle Bugge, the superintendent of its water department. Respondent seeks to recover the amount of the judgment from appellant, Northwest Casualty Company as garnishee defendant. The action is based upon a comprehensive public liability insurance policy written by appellant for the city of Grandview. The policy was in effect at the time of the occurrence, an explosion in the home of Frank C. Russell in Grandview, which gave rise to the judgment.

Respondent insured the home of William Hunt against the hazards of fire and explosion. The Hunt residence was adjacent to the Russell house. The explosion in the Russell house damaged the Hunt residence.

An action by respondent, as assignee of William Hunt (and others), resulted in a judgment against the city and Earle Bugge. This judgment was affirmed on appeal. Russell v. City of Grandview, 39 Wash.2d 551, 236 P.2d 1061.

Appellant answered the writ of garnishment. It denied any indebtedness to the city. Respondent controverted the answer by reply, setting forth the policy of public liability insurance.

The basis of the judgment against the city and Earle Bugge is summarized in finding of fact No. 8 of the instant case. No error is assigned to it. We accept it as setting forth established facts.

'8. That prior to the explosion of October 26, 1949 the defendants [city of Grandview, a municipal corporation, and Earle Bugge] negligently and carelessly permitted a highly inflammable and explosive methane gas to be continuously introduced, pumped into, and carried through the pipes of its water system to dwellings within the city of Grandview and including the dwelling of Frank Russell, and the defendants, by and through the acts and conduct of Earle Bugge, negligently and carelessly directed said Russells to open their faucets and permit said gas to enter into and fill the Russell residence, when they, the defendants, knew, or should have known that it would be ignited and would explode and cause damage, and that it did do so, thereby damaging the adjacent Hunt residence. That for approximately two and one-half hours on the morning of October 26, 1949, said gas entered the Russell home from the pipes of the water system of the City of Grandview, and that it was this accumulation of gas which exploded and caused the damage. That liability in this case arises out of the active negligence of the city and not by reason of failure to act after having actual or constructive notice of the existence of a danger.'

At the trial, the court admitted in evidence, over objections of appellant, the entire record of the proceedings and testimony in the principal action, to which appellant had not been a party.

The comprehensive public liability insurance policy issued by appellant to the city of Grandview provided:

'Northwest Casualty Company * * * hereby agrees: I. To Pay on behalf of the Insured, all sums which the Insured shall become obligated to pay by reason of the liability imposed upon him [it] by law * * * (c) for damages because of injury to or destruction of property, including the loss of use thereof, caused by accident.'

Appellant refused to defend the principal action and denied any indebtedness to the city under the writ of garnishment because the insurance policy contained an endorsement reading as follows:

'Exclusion of Product Liability. Exclusions (A) and (B) below are applicable only when checked.

x (A) Bodily Injury

'It is agreed that the policy does not apply to bodily injury, sickness or disease, including death at any time resulting therefrom;

x (B) Property Damage

'It is agreed that the policy does not apply to injury to or destruction of property (including loss of use of such property); if caused by the handling or use of, or the existence of any condition in goods or products manufactured, sold, handled or distributed by the Insured when the occurrence takes place away from premises owned, rented or controlled by the Insured, and after the Insured has relinquished possession of such goods or products to others or after the operations have been completed or abandoned at the place of occurrence (other than pick up and delivery, and the existence of tools, uninstalled equipment, and abandoned or unused material).

'Subject otherwise, to all the terms and conditions of the policy * * *.'

Appellant appeals from a judgment against it as garnishee defendant.

We consider first appellant's assignment of error directed to the admission in evidence of the entire record of the proceedings and trial in the principal tort action. The record admitted included pleadings, orders, cost bills, briefs, proposed instructions to the jury, jury instructions given various exhibits--including numerous photographs of the results of the explosion, verdicts of the jury, judgments on the verdicts, and the statement of facts.

Respondent, as garnisher, has no greater rights against the appellant garnishee than the city has. Holthe v. Iskowitz, 31 Wash.2d 533, 197 P.2d 999, and cases cited. Were the city (the insured) maintaining an action against appellant, it would have to bring itself within the terms of the policy by competent evidence before it could establish appellant's liability thereon. Isaacson Iron Works v. Ocean Acc. Etc. Corp., 191 Wash. 221, 70 P.2d 1026.

In order to establish its right to recover under the insurance policy, respondent must prove: (a) that a liability has been imposed upon the city by law; (b) that the facts upon which liability was based established a situation within the terms of the policy; and (c) the amount of the judgment.

Appellant concedes that the 'judgment roll' of the principal action is admissible in evidence. It limits its argument to the inadmisibility of the statement of facts. Hence, we consider only that part of the assignment of error which is argued. The assignment of error does not raise the question of res judicata or the doctrine of collateral estoppel, and we do not discuss them.

If it were impossible to determine the scope of the issues in the principal action from the judgment roll, or if the judgment roll did not disclose the ultimate facts and the theory upon which liability was based, then testimony given in the principal action would be admissible only for that purpose. It could not be used to establish a fact which must be proved in the present action. It has no intrinsic proving power. Spokane v. Costello, 42 Wash. 182, 84 P. 652; 5 Wigmore on Evidence (3d ed.) 94, § 1387(2).

In this instance, however, the judgment roll contains sufficient documents to disclose that the liability imposed upon the city arose from a situation within the terms of the public liability policy. The statement of facts was not necessary to determine the scope of the principal action; it was not necessary to define the issues of the garnishment proceeding; it could not meet the requirements of Rem.Rev.Stat. § 1247, RCW 5.20.060, relating to prior testimony of a deceased or absent witness. Isaacson Iron Works v. Ocean Acc. Etc. Corp., supra, is not authority supporting its admissibility. A reference to the original record of that case in this court discloses that a portion of the statement of facts in the original action was offered in evidence but rejected.

It was error, under the facts of this record, to admit the statement of facts of the principal action in evidence.

However, there is a wealth of testimony, competent and relevant, tested by cross examination in the trial record upon the issues of fact raised by the controverted answer to the writ of garnishment. In part, the statement of facts of the principal action was merely corroborative of...

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