Spears v. Ritchey

• Decision Date: 12 March 1958
• Citation: 108 Ohio App. 358,161 N.E.2d 516
• Parties: , 9 O.O.2d 314 SPEARS, Appellant, v. RITCHEY et al., Appellees.
• Court: Ohio Court of Appeals

Page 358

108 Ohio App. 358

161 N.E.2d 516, 9 O.O.2d 314

SPEARS, Appellant, v. RITCHEY et al., Appellees.

Court of Appeals of Ohio, Summit County.

March 12, 1958.

Syllabus by the Court

1. The notice of an accident or claim need not be given by the insured himself, but may, under certain circumstances, be given by other persons, among them the injured party.

2. When a statute permits a judgment creditor of an assured to sue the insurer when the assured has not paid the judgment, the injured party has such an interest in this asset of the assured that he may fulfill the assured's obligation by complying with the terms of a policy requiring the assured to make a report of the accident to the insurer.

Harry F. Clarke and D. W. Alexander, Akron, for appellant.

Wise, Roetzel, Maxon, Kelly & Andress, Akron, for appellee Century Indemnity Co.

HUNSICKER, Presiding Judge.

This is an appeal on questions of law from a judgment entered by the court after trial, a jury having been waived by the parties.

On June 30, 1951, James Spears, the appellant, was injured while riding as a passenger in an automobile owned by one James C. McMoore. The McMoore vehicle collided with a car bearing a Nevada license, driven by William M. Ritchey.

On March 20, 1952, James Spears brought an action against Ritchey to recover damages for the injuries suffered. Service of summons was made on Ritchey through the Secretary of State of Ohio, under favor of Sections 6308-1 and 6308-2, Ohio General Code, now Section 2703.20, Revised Code; and a copy of the summons was sent by registered letter to Ritchey, first addressed to him at Reno, Nevada, and later to Ritchey at Las Vegas, Nevada. Ritchey, at this time, was in the Oregon State Penitentiary at Salem, Oregon, having entered that institution on August 13, 1951.

James Spears obtained a default judgment against Ritchey and when, after a lapse of the required period, such judgment was not satisfied, Spears sued The Century Indemnity Company and The Standard Insurance Company of New York, claiming that such companies had insured Ritchey by policies of liability insurance covering the occurrence by which Spears suffered personal injuries. It afterwards developed that only Century carried the liability insurance.

Prior to any action being filed by Spears, his attorney, on September 22, 1951, notified both insurance companies, by letter, that he represented James Spears; and that their assured Ritchey, was involved in an automobile collision which caused personal injuries to James Spears.

The Century Indemnity Company, the only company that carried the liability coverage herein, by letter dated September 28, 1951, employed an independent insurance adjuster in Akron, Ohio, to investigate and report concerning the occurrence set out in the letter from counsel for James Spears. The adjuster made his investigation and report after contacting counsel for Spears, who gave to the adjuster full co-operation in the matter.

At the trial of the matter against The Century Indemnity Company, a judgment was entered against Spears and in favor of the indemnity company, and from that judgment an appeal has been perfected to this court.

The appellant, Spears, says the trial court erred: in that the judgment was against the manifest weight of the evidence; in that the judgment was contrary to law; in finding that notice of the accident had not been given to the defendant (appellee) The Century Indemnity Company. The appellant says there were other errors appearing in the record, but these claims were not specified in the assignments of error.

The question to which we first direct our attention concerns the effect of the notice given by counsel for James Spears to The Century Indemnity Company.

It is conceded herein that Ritchey never notified his insurer that there was a collision of his motor vehicle with the one in which Spears was riding.

The insurance contract which Ritchey entered into with The Century Indemnity Company contained, among many provisions, the following 'Condition:' '1. Notice of Accident--Coverages A, B and C. When an accident occurs written notice shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the insured and also reasonably obtainable information respecting the time, place and circumstances of the accident, the names and addresses of the injured and of available witnesses.'

Was it therefore necessary for Ritchey personally, or for someone acting in his behalf, to notify the insurer; or is notice by a third party to the contract sufficient compliance with this provision of the policy?

It has been the established rule in this state that contracts of insurance should be construed so as to give effect to the intention as expressed by the language of the parties. West v. Citizens' Ins. Co., 27 Ohio St. 1, 22 Am.Rep. 294; Travelers' Ins. Co. v. Myers & Co., 62 Ohio St. 529, 57 N.E. 458, 49 L.R.A. 760.

A court cannot extend or enlarge the contract by implication, so as to embrace an object distinct from that originally contemplated. Fidelity & Casualty Co. of New York v. Hartzell Bros. Co., 109 Ohio St. 566, at page 569, 143 N.E. 137.

In the case of Luntz v. Stern, 135 Ohio St. 225, at page 230, 20 N.E.2d 241, 244, the court said:

'* * * The indemnity policy is a contract in which there are mutual undertakings and obligations by the insurance company and the assured. The principle is well settled in cases of this character that the injured person is subrogated to the rights of the assured. He has no greater right than the assured and cannot recover from the insurance company if the assured, by reason of any breach of the conditions of the policy, could not recover.'

This is, and has been, the law of this and many other jurisdictions for many years.

Our question in this case, however, raises the problem of how far an injured person may go in complying with the conditions of the indemnity policy, with respect to notice to the insurer. We do not have here a question of lack of co-operation, for none was requested of the assured. The Century Indemnity Company chose to refuse any recognition of the action against Ritchey by relying on the provision regarding notice. It must be stressed, however, that it did have notice within a reasonable time after the accident, and that it did employ an investigator to search out the facts of the occurrence and keep it informed of the proceedings against Ritchey.

We do not discuss herein the question of lack of co-operation. The Century Indemnity Company learned that its assured was in the Oregon State Penitentiary. It could have requested his co-operation, but did not do so. In such a situation, the rule announced in Ermakora v. Daillakis, 90 Ohio App. 453, 107 N.E.2d 392, is dispositive of that issue herein. That rule is stated as follows:

'3. Where an automobile liability insurance policy provides that 'the insured shall co-operate with the company and, upon the company's request, shall attend hearings and trials and shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses,' and the insurance company, in a supplemental proceeding by a judgment creditor under Sections 9510-3 and 9510-4, General Code, in its answer raises the affirmative defense of lack of co-operation, such lack of co-operation is not established by mere absence of the insured from the trial, there being no evidence offered that the insured was ever requested to co-operate or that he refused to co-operate when requested.'

In this case, we are faced with cases wherein the Supreme Court of Ohio has made seemingly contrary, confusing and opposing statements on the subject before us. We refer specifically to the case of Stacey v. Fidelity & Casualty Co. of New York, 114 Ohio St. 633, 151 N.E. 718, and the case of Hartford Accident & Indemnity Co. v. Randall, 125 Ohio St. 581, at pages 585 and 586, 183 N.E. 433, at page 435, where the court said, in the latter case:

'* * * It must be held that by virtue of Section 9510-4, General Code, an injured person has a potential interest and a substantial right in the policy from the very moment of his injury, and, although it does not develop into a vested right until a judgment is secured, his rights are such, even before judgment, as to entitle him to comply with the terms and conditions of the policy, and thus make them effective in his behalf in the event the insured fails to discharge his duty under the policy.'

In the Luntz v. Stern case, supra, the court also reiterated the theory that 'the injured person is...