State Farm Mut. Auto Ins. Co. v. Hall

• Decision Date: 23 October 1942
• Citation: State Farm Mut. Auto Ins. Co. v. Hall, 292 Ky. 22, 165 S.W.2d 838 (Ky. 1942)
• Parties: State Farm Mut. Auto Ins. Co. v. Hall.
• Court: Supreme Court of Kentucky

292 Ky. 22

State Farm Mut. Auto Ins. Co. v.Hall.

Court of Appeals of Kentucky. Common Pleas Branch, First Division.

October 23, 1942.

1. Parties. — The correct manner in which to question by special demurrer a defect of parties not shown on the face of an adversary's pleadings is by allegations in the demurrant's pleadings (Civil Code of Practice, sec. 92).

2. Parties. — A person with whom an insurance company has settled a loss cannot maintain an action in his own name for the use and benefit of the insurance company (Civil Code of Practice, sec. 18).

3. Pleading. — In action by insured against his liability insurer to recover amount of judgment obtained against insured by third person, insurer's allegations that judgment was satisfied by a draft drawn on and signed by another insurer in consideration of insured permitting the other insurer to bring action against his insurer in his name, and that judgment was satisfied in full by the other insurer under pretense of a loan to insured under agreement that insured would not be liable for pretended loan in event action against his insurer terminated adversely to him, were properly stricken, as against insurer's contention that the other insurer was the "real party in interest" and that action could not be brought in insurer's name (Civil Code of Practice, secs. 18, 92, 118).

4. Insurance. — Insurer which issued an automobile liability policy with provision that the insurance was to be excess insurance over any valid and collectible insurance available to insured, and that it was to protect him while driving another's automobile,

with the other's permission, was not liable to insured for judgment against him as result of an accident in which insured was driving an automobile of another, if owner of automobile involved in accident had, as alleged, an automobile liability policy protecting not only the owner but any person driving the automobile with the owner's permission.

5. Pleading. — A general demurrer to answer admitted the truth of the allegations of the answer.

Appeal from Jefferson Circuit Court.

Edward J. Hogan and Edwin O. Davis for appellant.

Jones, Keith & Jones for appellee.

Before J.J. Hancock, Judge.

OPINION OF THE COURT BY SIMS, COMMISSIONER.

Reversing.

This action is an aftermath of a fatal automobile accident wherein the driver of the car was protected by one automobile indemnity insurance company, and the owner of the car by another.The driver's policy contained a provision insuring him while driving his own car and when driving another's car on business or pleasure with the owner's consent.The owner's policy contained a similar provision protecting not only the owner but any other person driving his car on business or pleasure with his consent.The real purpose of this litigation is to determine which of the two insurance companies is liable under the terms of their policies.

The circuit court sustained a motion to strike certain allegation from the answer; after which a general demurrer was sustained to the first and second paragraphs thereof; defendant declined to plead further; judgment was entered for the plaintiff; and defendant appeals.

The pleadings show these facts: Rex Hall had an automobile accident insurance policy with the State Farm Mutual Auto Insurance Company(hereinafter referred to as Mutual), and Ves Chancellor had a similar policy with the State Automobile Mutual Insurance Company(hereinafter referred to as State.)The State policy was issued to Chancellor on October 26, 1938, which not only protected him but also any person driving his car on business or pleasure with his permission.On May 29, 1939, the Mutual issued a rider to Hall's policy extending protection to him while driving another's car on business or pleasure with the owner's permission which provided:

"The insurance shall be excess insurance over any other valid and collectible insurance available to the insured, either as an insured under a policy applicable with respect to the automobile or otherwise, against a loss covered hereunder."

On September 3, 1939, while both policies were in force, Hall and Chancellor went on a business trip in the latter's car which Hall drove with his consent.The car struck and killed Patrick Smith, whose administrator sued both Hall and Chancellor for $25,000 and obtained judgment for $2,500.The State policy limited that company's liability for such an accident to $5,000, while the limit in the Mutual policy was $20,000.Mutual, believing that it was liable for any judgment against Hall in excess of $5,000, defended the action for him.After verdict was returned for $2,500 and motion for a new trial was overruled, Mutual notified Hall that the State policy protected him, and withdrew from the case.

An execution was issued against Hall and Chancellor to Jefferson County with an alias to Fayette County, both of which were returned "no property found."Thereupon, State advanced Hall $2,578.61 (the amount of the judgment, interest and cost) in the form of a loan with which he satisfied the judgment.Thereafter he brought this action against Mutual upon the...