State v. Trimble

• Decision Date: 03 March 1923
• Docket Number: No. 23369.,23369.
• Citation: 297 Mo. 659,249 S.W. 902
• Parties: STATE ex rel. WESTERN AUTOMOBILE INS. CO. v. TRIMBLE et al., Judges.
• Court: Missouri Supreme Court

249 S.W. 902

297 Mo. 659

STATE ex rel. WESTERN AUTOMOBILE INS. CO. v. TRIMBLE et al., Judges.

No. 23369.

Supreme Court of Missouri, in Banc.

March 3, 1923.

Motion for Rehearing Denied April 2, 1923.

Certiorari by the State, on the relation of the Western Automobile Insurance Company, directed to Francis H. Trimble, and others, judges. Record quashed.

M. D. Aber, of Warrensburg, for relator.

Nick M. Bradley and W. E. Suddath, both of Warrensburg, for respondents.

JAMES T. BLAIR, J.

Certiorari. The writ brings here the record of the Kansas City Court of Appeals in Ben Pickel v. Western Automobile Insurance Company. The question presented is whether the decision of the Court of Appeals conflicts with previous controlling decisions of this court respecting the construction of contracts of insurance.

It appears from the opinion of the Court of Appeals that the action before it is upon a contract of indemnity insurance issued to plaintiff by defendant, relator here. While driving the automobile covered by the policy, Pickel collided with another automobile and injured Hanna and Walker. Pickel notified relator and it later declined to "assume any liability in the case." Walker and Hanna sued Pickel and recovered judgment. Relator continued to deny liability and did not appear. The judgment for Walker was for $600 and $93.40 costs. Hanna's judgment was for $500 and $10.35 costs. The costs Pickel paid in cash. Attorney's fees in the sum of $300 "plaintiff paid by giving his unsecured promissory note," the Court of Appeals states. "In payment and satisfaction of the two judgments plaintiff gave to each of the respective holders thereof his promissory note for the amount of the judgment, which note was duly secured by deed of trust on land belonging to plaintiff, whereupon the two judgments were released upon the margin of the records thereof." Pickel then sued relator upon the indemnity policy' to recover the amounts of the judgments and expenses of litigation. There was a judgment for Pickel for the full amount. The company appealed.

The Court of Appeals held that the defense under the policy that Pickel was intoxicated when the collision occurred had been settled by the verdict rendered on conflicting evidence. The principal question in the Court of Appeals, and the one the decision upon which Is contended to have conflicted controlling decisions of this court, grew out of the refusal of the trial court to give an instruction in the nature of a demurrer to Pickers evidence. The company, the opinion states, contended in the Court of Appeals "that the policy is not one of indemnity for liability." The Court of Appeals held this was the correct construction of the policy. Of this holding relator does not complain. The Court of Appeals then took up the question whether the course pursued by Pickel gave him a right of action on the policy for "loss resulting from liability." It sustained Pickel's right to sue. This is the particular ruling said to be out of harmony with decisions of this court. In deciding this the Court of Appeals referred to and quoted freely from the policy and the by-laws of relator and founded its ruling upon their construction. Under the decisions (State ex rel. Kansas City v. Ellison, 281 Mo. loc. cit. 674 et seq., 220 S. W. 498, and cases cited; State ex rel. Raleigh Inv. Co. v. Allen et al. [Mo. Sup.] 242 S. W. loc. cit. 78; State ex rel. Natl. Council Knights and Ladies of Security v. Trimble [Mo. Sup.] 239 S. W. loc. cit. 468), the contract and by-laws are thereby drawn into the opinion by reference and are for consideration in this proceeding as if they had been written Into it in full. The Court of Appeals quotes nearly or quite all the pertinent provisions of the policy and by-laws and construes them to give a cause of action to Pickel, both for the amount of the judgments, the costs, and attorney's fees. No question is made concerning the costs, which were paid by Pickel in cash. In discussing the question which remains, i. e. whether Pickel had a cause of action against relator for anything except the actual cash he had paid out, the several provisions of the policy and by-laws relevant to that question will be considered In the order In which they appear. The principles applied by the Court of Appeals are that when an insurance policy is open to two constructions, the one most favorable to the insured will be adopted, as the language is that of the insurer; and conditions which narrow the range and limit the force of the principal obligation, or tend to defeat it altogether, should be construed against the company where there is room for contention. Matthews v. Modern Woodmen, 236 Mo. 326, 342, 343, 139 S. W. 151, Ann. Cas. 1912D, 483. The position of relator is that the language of the policy and by-laws is unambiguous and susceptible of but one construction; that in such case the rules adverted to by the Court of Appeals cannot be employed to give the contract a meaning its language does not warrant; that the Court of Appeals did give it such a meaning and thereby brought its decision into conflict with the principle of the decision of this court in State ex rel. v. Ellison, 269 Mo. loc. cit. 420, 190 S. W. 879, and other decisions cited.

As stated by the Court of Appeals, "The insurance contract is made up of the policy and * * * the by-laws." The part of the policy which is pertinent to the present question is:

"In consideration of the application * * * and admission fee paid, the * * * association does hereby receive the said Ben Pickel * * * as a member * * * and upon the consideration aforesaid and upon the further consideration and condition of the payment of all assessments * * * within the time provided for, * * * there shall be payable to said member * * * such sums of money as are guaranteed to said member by the by-laws of this association, by reason of any claim or demand made upon said member on account of bodily injuries or death, suffered or alleged to have been suffered, by any person or persons, through the ownership, maintenance or use of the automobile enumerated and described in the member's application. * * *" The policy also provides for losses resulting from damage to property. It limits liability for loss for causing death of any cue person to $2,500 and fixes $5,000 as the maximum Liability for "any one accident." Liability for loss by reason of damage to property in any one accident is limited to $500. Following this the following appears in the policy:

"And any and all of such payments, or liability to pay, shall be and are, in accordance with and subject to each and all of the provisions of the by-laws of said association, * * * which said by-laws are hereby referred to and made a part hereof as fully as if they were recited at length over the signatures hereto affixed, * * * and the said Ben Pickel hereby and by the acceptance hereof, agrees to abide, and be bound, by said by-laws, and each of them. * * *"

Sections 1 and 2 of article 1 of the by-laws state the name and place of business of relator. Section 3 of article 1 is to the effect that the "object of this association is to perfect and maintain a mutual association for the purpose of indemnifying and protecting its members against claims for loss and damage to persons and property of others arising from ownership, use and maintenance of an automobile." These three sections appear under an article title—"Name, location, Object." In article 3 of the bylaws are found the same provisions as to what constitutes the contract of indemnity and as to the limitations upon liability as appear in the policy or certificate. Article 8 of the by-laws is entitled "Indemnities or Benefits." Section 1 of that article of the by-laws provides that—

"Each member of this association will be indemnified for any sums paid by such member in satisfaction of any judgment imposed by law upon such member on account of bodily injuries or death suffered, or alleged to have been suffered, by any person or persons through the ownership, maintenance or use of the automobile enumerated," etc.

Section 2 of article 8 contains like provisions respecting damages to property. The section immediately following these two reads thus:

"Provided that in no event does liability accrue against this association in favor of a member until payment or payments within the terms of his membership have actually been made by said member. * * *"

Several other short sections follow which deal with the matter of indemnity, notice of suit, and duties of certificate holder. Section 14, the last section in article 8, reads as follows:

"Unless otherwise provided by law of the state within which this certificate is issued, no action shall lie against this association recover for any indemnity or benefit guaranteed by this certificate, until final judgment has been rendered against the member after an actual trial of the issues on the merits, ha a suit duly instituted within the period limited by the statute of limitation; and then only, provided such action against this association be brought by the member personally, for loss or expense actually paid in money by said member in satisfaction of such final judgment. * * *"

In holding that the settlement of the judgments by giving notes secured by deeds of trust constituted a payment within the contract and entitled Pickel to sue, the Court of Appeals said that—

If Pickel had "paid and satisfied the said judgments and thereby sustained such loss, it would seem that it should little concern defendant how or in what way it was paid, whether in cash or in property. However, it may be that defendants are entitled to require that payment be made in a particular manner. But before it should be exempted from liability under the policy on that ground, it should clearly and explicitly appear that such is the strict requirement specified in the insurance contract, and that no other meaning is...