Traders & General Ins. Co. v. West Texas Utilities Co.

• Decision Date: 14 October 1942
• Docket Number: No. 1913-7942.,1913-7942.
• Citation: 165 S.W.2d 713
• Parties: TRADERS & GENERAL INS. CO. v. WEST TEXAS UTILITIES CO. et al.
• Court: Texas Supreme Court

165 S.W.2d 713

TRADERS & GENERAL INS. CO. v. WEST TEXAS UTILITIES CO. et al.

No. 1913-7942.

Commission of Appeals of Texas, Section B.

October 14, 1942.

Rehearing Denied December 2, 1942.

Error to Court of Civil Appeals of Seventh Supreme Judicial District.

Suit by Charles Jones, Jr., against the West Texas Utilities Company and others for injuries sustained by plaintiff in an automobile collision. The Traders & General Insurance Company intervened, alleging that the suit was brought with its approval, and that it was entitled to the amount of compensation that it had paid to the plaintiff, together with expenses. The plaintiff and defendant made a compromise agreement, and the plaintiff thereupon dismissed his suit. From a judgment in favor of the defendant, the intervener appealed to the Court of Civil Appeals. To review a judgment of the Court of Civil Appeals, 156 S.W.2d 271, affirming the trial court's judgment, the intervener brings error.

Judgments of the trial court and the Court of Civil Appeals reversed, and cause remanded for new trial.

Lightfoot, Robertson & Gano, of Fort Worth, for petitioner.

Eskridge & Groce, of San Antonio, for Utilities Co., respondent.

Aldridge & Aldridge, of Farwell, and L. D. Ratliff, Jr., of Spur, for Jones, guardian, respondent.

Allen & Gambill, of Fort Worth, Andrews, Kelley, Kurth & Campbell and Baker, Botts, Andrews & Wharton, all of Houston, A. L. Burford, of Texarkana, J. D. Dodson, of San Antonio, Charles C. Huff, S. W. Lancaster, and Locke, Locke, Dyer & Purnell, all of Dallas, Terry, Cavin & Mills, of Galveston, and Thompson & Barwise, and Walker, Smith & Shannon, all of Fort Worth, amici curiae.

John N. Jackson, Robert B. Holland, and J. L. Goggans, all of Dallas, amici curiae on motion for rehearing.

TAYLOR, Commissioner.

Charles Jones, Jr., an employee whose employer carried compensation insurance, was injured in a truck accident in the course of his employment. He filed a claim with the industrial accident board, claiming he was an employee either of L. L. Massey, whose compensation insurance carrier was Traders & General Insurance Company, or of R. W. McKinney, whose compensation carrier was American Agency Lloyds. An award in the employee's favor was appealed from but before the case was tried the parties made a settlement of the claim whereby Lloyds paid the employee $2,000 and Traders & General paid him $850. It was stipulated in the settlement judgment that Lloyds waived its statutory right of subrogation under the Workmen's Compensation Act, Art. 8307, sec. 6a and relinquished same to the employee, but that Traders & General retained its subrogation rights. Further reference herein to Lloyds is therefore unnecessary. The insurance company will be referred to as Traders & General or the association and the utilities company as the company.

One of the trucks involved in the accident was owned by the company. After the compensation suit had been settled the injured employee sued the company as a third person tort feasor for $30,600 alleging that his injuries were caused by its negligence. He made Traders & General a party to the suit, alleging, among other things, the facts stated above with respect to the settlement of the appeal from the accident board's award. Traders & General filed its plea of intervention, setting up its rights of subrogation under the statute, sec. 6a, art. 8307, R.C.S.1925, and prayed for judgment against the utilities company and the injured employee for the amount of compensation it had wrongfully paid the employee, together with expenses. The case was tried and a judgment was awarded against the company and apportioned, $1,100 to Traders & General and $3,900 to the employee. The trial court, for reasons not material here, set aside the judgment on motion for a new trial; but before the cause was retried the alleged tort feasor and the injured employee, without the knowledge or participation of Traders & General, made a compromise settlement whereby the company paid the employee $1,500 for his claim of damages against it. Thereupon the employee, pursuant to the settlement agreement, dismissed his suit for damages against the company, the court reciting in the order of dismissal that it was without prejudice to the rights of Traders & General. Whereupon Traders & General amended its petition of intervention pleading the same negligence that was alleged in its and the employee's original petitions, and the same subrogation rights as alleged by it originally. Traders & General pleaded also as an additional ground of recovery the making of the settlement without its consent, participation or approval, and with the full knowledge of its right of subrogation, and prayed for judgment against both the company and the employee for the full amount due it under its subrogation rights. The case was tried before the court without a jury upon intervenor's alleged cause predicated on the settlement and release. No testimony relating to the alleged acts of negligence on the part of the utilities company was offered, the second alleged cause of action being relied upon wholly by the intervenor. The trial court rendered judgment in favor of the company which, upon appeal, was affirmed. Tex.Civ.App., 156 S.W.2d 271.

Writ of error was granted on application of Traders & General on the proposition that "when the utilities company paid, and the employee received, $1,500 in settlement of his claim for damages, with knowledge of Traders & General's right of subrogation, they thereby rendered themselves liable to Traders & General jointly and severally, to the extent of its subrogation rights."

We adhere to the view entertained when the writ was granted. The following is the subrogation section of the statute under which Traders & General's rights were alleged: "Where the injury for which...