Taxicab Motor Co. v. Pacific Coast Cas. Co. of San Francisco, Cal.

• Decision Date: 26 May 1913
• Citation: 73 Wash. 631,132 P. 393
• Parties: TAXICAB MOTOR CO. v. PACIFIC COAST CASUALTY CO. OF SAN FRANCISCO, CAL.
• Court: Washington Supreme Court

132 P. 393

73 Wash. 631

TAXICAB MOTOR CO. v. PACIFIC COAST CASUALTY CO. OF SAN FRANCISCO, CAL.

Supreme Court of Washington

May 26, 1913

Department 2. Appeal from Superior Court, Spokane County; Henry L Kennan, Judge.

Action by the Taxicab Motor Company against the Pacific Coast Casualty Company of San Francisco, Cal. Judgment for plaintiff, and defendant appeals. Affirmed.

Samuel R. Stern, of Spokane, for appellant.

McCarthy & Edge, Nuzum, Clarke & Nuzum, and Geo. H. Armitage, all of Spokane, for respondent.

FULLERTON J.

The respondent, Taxicab Motor Company, owns and operates a number of taxicabs within the city of Spokane in which it carries passengers for hire. The appellant is an insurance company making it a business to insure against losses from casualties resulting from the conduct of the various industries. On February 26, 1910, the appellant, for a premium of $625 issued to the respondent an insurance policy, insuring it for a period of one year 'against loss or expense resulting from claims upon the assured for damages on account of bodily injuries, or death, accidentally suffered while this policy is in force by any person or persons and caused by any of the' taxicabs operated by the respondent. The policy contained the following condition: 'No action shall lie against the company for any loss under this policy, unless it shall be brought by the assured to reimburse him for loss actually sustained and paid by him in satisfaction of a final judgment, within ninety days from the date of such judgment and after trial of the issue.' The policy also contained provisions requiring notice to be given the company of occurring accidents, and provided that, if any action be brought against the assured to enforce a claim for damages on account of any such accident, the service papers should be immediately forwarded to the company's office, or to its duly authorized local agent, and that the company would at its own cost defend such action.

On the night of May 17, 1910, while the policy was in force, an automobile of the respondent, while being driven by one of the respondent's employés, ran against one Frank Burger, an employé of the city of Spokane in the performance of his duties, and inflicted bruises and wounds upon him from which he died a few days later. Due notice of the accident was given the appellant. Thereafter an action was begun by the administratrix of Burger's estate against the respondent to recover damages for his death; the administratrix alleging that the death was caused by the negligence of the driver of the automobile. The summons and complaint were forwarded to the appellant, and the appellant thereupon took upon itself the defense of the action, employing its own counsel, who assumed full charge of the defense. Judgment went against the respondent for the sum of $4,975 and the costs of the action. An appeal was taken to this court by the company, wherein the judgment was affirmed. Burger v. Taxicab Motor Co., 66 Wash. 676, 120 P. 519. After the return of the remittitur in that case the insurance company refused to satisfy the judgment, whereupon the respondent procured the satisfaction of the same by executing and delivering to the administratrix its promissory note for the amount thereof, with the accumulated interest; the settlement and satisfaction being made by the administratrix after she had presented the matter to the judge sitting in probate of her intestate's estate, and received his consent and approval.

The present action is an action by the taxicab company against the insurance company upon the bond. In its complaint the taxicab company set forth the facts substantially as we have related them, and demanded judgment in accordance with the terms of the policy. The insurance company, for answer to the complaint, put in issue certain of its allegations and set up four separate affirmative defenses. In the first it alleged that the note purported to have been given in satisfaction of the judgment was not given in good faith, but on the faith and understanding that the same should not be a liability against the taxicab company, except in the event that the insurance company paid the judgment, and hence no damage or injury had resulted to the taxicab company by the judgment. For a second defense it alleged that the policy was issued and accepted on the express understanding and agreement that in no event should the insurance company be liable thereon if the taxicab company, in operating its automobiles, permitted its employés to run them at a rate of speed exceeding the speed limit prescribed by the ordinances of the city of Spokane, and that the automobile operated by the employé which ran down and killed Burger was at that time being run at a speed exceeding the speed limit provided by such ordinances. For a third defense it alleged that the death of Burger did not result from the injuries received by being run into by the taxicab company's automobile, but by the negligence and malpractice of the physician called in to attend him for his injuries. For a fourth affirmative defense it alleged that the respondent failed to lend such co-operation and assistance as lay in its power in the defense of the original action. The affirmative allegations in the answer were put in issue by a reply, and a trail had before the court sitting without a jury, which resulted in a judgment in favor of the taxicab company. The insurance company appeals.

The appellant first contends that the evidence is insufficient to show a loss actually sustained and paid by the respondent in satisfaction of a judgment, within the meaning of the conditions of the policy. It is not denied that a judgment may be paid and satisfied by a judgment debtor by the giving of a promissory note for the amount thereof to the judgment creditor, but the contention is that the note must be given in good faith, having in view the purpose and object of payment, with the intent that the note shall afterwards be paid, and that these elements are wanting in the instance before us. But we fail to discover in the evidence anything that seems to justify this conclusion. The direct evidence of the parties making the settlement is to the contrary, and it will be remembered that the terms of the proposed payment and satisfaction were made known by the administratrix to the judge sitting in probate and received his sanction and approval before the settlement was made. It seems to us that this latter fact is alone sufficient to dispel any idea of bad faith that might arise from the transaction itself, and sufficient to require some direct and cogent proof of bad faith before it can be held that the transaction is not what it purports to be. It is true that the note was not secured, and the respondent apparently had sufficient property out of which the judgment could be made. But the company's other liabilities were not shown, and to have levied upon the property would certainly have destroyed the respondent's...