Travelers' Indemnity Co. v. Holiman

• Decision Date: 11 November 1935
• Docket Number: 31892
• Citation: 174 Miss. 220,164 So. 36
• Parties: TRAVELERS' INDEMNITY CO. v. HOLIMAN
• Court: Mississippi Supreme Court

164 So. 36

174 Miss. 220

TRAVELERS' INDEMNITY CO. v. HOLIMAN

No. 31892

Supreme Court of Mississippi

November 11, 1935

Division B

1 INSURANCE.

Complaint in action by injured automobile guest against insurer of host, which failed to allege that host had complied with conditions of policy requiring assured to promptly notify insurer of accidents and to aid insurer in securing evidence and locating witnesses, held insufficient, since injured person stands in place of insured and has no greater rights than insured.

2 INSURANCE.

Automobile liability insurer, by defending insured in action brought against him by injured party, held not to have waived rights under policy to timely notice of accident and assistance of insured in ascertaining facts, where insurer in entering upon defense had reserved such rights, and all of the facts in the case had not been learned by insurer prior to action.

3. INSURANCE.

In action by injured automobile guest against liability insurer of host, refusal to permit insurer to introduce evidence as to conversations had between injured person and insured tending to prove an agreement between them that any amount recovered by injured person should be split with insured held prejudicial error.

HON. JNO. F. ALLEN, Judge.

APPEAL from the circuit court of Montgomery county HON. JNO. F. ALLEN, Judge.

Action by Allen Holiman against the Travelers' Indemnity Company. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

Reversed and remanded.

W. T. Knox, of Winona, and Emmett W. Braden, and Armstrong, McCadden, Allen, Braden & Goodman, of Memphis, Tenn., for appellant.

Before appellee is entitled to any proceeds of the policy sued on, he must show a compliance with its terms and conditions. He stands in the shoes of the insured, R. C. Wilson.

Downing v. Home Indemnity Co. of N. Y., 169 Miss. 13; Adams v. Maryland Casualty Co., 162 Miss. 237; 13-14 Huddy Cyc. Auto Law (9 Ed.), sec. 325, p. 432.

Where no written notice is given in compliance with Condition "H" of the policy, the appellant company is deprived of a valuable right and there can be no recovery by appellee.

Downing v. Home Indemnity Co. of N. Y., 169 Miss. 13.

The provision in the policy of liability insurance requiring written notice of an accident as soon as is reasonable thereafter, and especially where the provision is preceded by words expressly declaring the insurance "subject to the following conditions," among which is mentioned the provision in question, is of the essence of the contract.

Downing v. Home Indemnity Co. of N. Y., 169 Miss. 13; 76 A.L.R. Ann., pages 182-201.

Notwithstanding the insured's breach of condition requiring him to give written notice as soon as reasonably possible thereafter of an accident, the insurer may, with the insured's actual or implied consent, assume the defense of the action brought against the insured with the express reservation to itself of its rights under the terms and conditions of the policy in which case the assumption of the defense of the action does not amount to a waiver of the breach of the condition.

76 A.L.R. Ann., page 169; 13-14 Huddy Cyc. Auto. Law (9 Ed.), page 370.

Where a policy of insurance provides for written notice as soon as reasonably possible after the occurrence of an accident, a delay of eighty-five days in giving the notice is not a compliance therewith and as a matter of law the appellant should be relieved of liability.

Jones v. Shebee Ford Wagon & Harness Co., Inc., 160 So. 161; Howard v. Rowan, 154 So. 382; 76 A.L.R. Ann., page 66.

An insurance company in an action by the injured person may set up any defense which it might have against the insured. In such a case the injured person stands in the shoes of the insured and forfeits the insurance if there has been a breach of the policy conditions. Thus the insurer may defend on the ground that the insured had violated the clause of the policy requiring him to cooperate with the company. This being true, evidence of collusion or fraud on the part of the insured is admissible.

13-14, Huddy Cyc. Auto Law (9 Ed.), sec. 325, page 433; 72 A.L.R. Ann., pages 1499-1515.

A delay of eighty-five days in giving notice of an accident where the insured had full knowledge on the date the accident occurred, cannot be said, as a matter of law, to be a compliance with the conditions by the insured.

76 A.L.R. Ann., pages 61-66.

V. D. Rowe and J. W. Conger, both of Winona, for appellee.

We submit that the conduct of appellant in defending the original case of Holiman v. Watson in the circuit court and then prosecuting the appeal from the judgment therein to the Supreme Court, after Watson wrote the letter, amounted to a waiver of notice. Watson told appellant in that letter that he was unable to employ an attorney to defend him in the suit of Holiman, and stated emphatically his objection and protest or dissent to the proposition of the Indemnity Company's defending that case with proposed reservations, and thereafter the Indemnity Company took charge of the case and conducted Watson's defense without any attorney's aid for Watson, because Watson did not employ an attorney.

76 A.L.R., pages 172, 174 and 175; Miller v. Union Indemnity Co., 209 A.D. 455, 204 N.Y.S. 730; Di Francesco v. Zurich Gen. Acc. & Lia. Ins. Co., 105 Conn. 162, 134 A. 789; Farrell v. Merchants Mutual Auto Liability Ins. Co., 203 A.D. 118, 196 N.Y.S. 383; Canal Street Corp. v. Zurich Gen. Acc. & Lia. Ins. Co., 226 A.D. 516, 235 N.Y.S. 63; Vanderbilt v. Schreger, 91 N.Y. 392; 72 A.L.R. 1498 and 1506.

If there was any collusion in this case, that is, the original negligence case, it appears to be between Watson and appellant. The judgment in that case was rendered by the circuit court and affirmed by the Supreme Court.

Watson v. Holiman, 169 Miss. 585, 153 So. 669.

The Indemnity Company had a right to take over and control and conduct the defense therein, and it did this. Thereby it became a party to that cause, and it was concluded by the judgment therein just as much so as was Watson.

The rule forbidding the collateral impeachment of judgments applies to all persons who were parties to the action in which the judgment was rendered, and to all those who are in privity with them. The term "parties," in the sense of one who is concluded by a judgment, includes all those who had the right to control or defend the proceedings and appeal.

34 C. J. 525, sec. 831.

The judgment sued on is a judgment against Watson and the Indemnity Company, appellant, stands in the shoes of Watson as to such judgment.

34 C. J. 566, sec. 867.

The peremptory instruction for plaintiff was properly given by the trial court.

13-14 Huddy Cyc. of Auto Law (9 Ed.), 433-4.

OPINION

Ethridge, P. J.

The appellant issued to R. C. Watson an automobile liability policy on December 12, 1931, for a period of one year, which policy, among other things, provided as follows: "In consideration of the payment of the premiums and of the statements contained in the declaration and subject to the limits of liability, exclusions and other terms of this policy, . . . to pay on behalf of the assured all sums which the assured shall become obligated to pay by reason of the liability imposed upon him by law for damages because of bodily injury, including death at any time resulting therefrom, accidentally sustained by any person or persons, and caused by the ownership, maintenance or use of the automobile." And it further provided that the "Company further agrees (a) To serve the Assured upon notice of such injury or destruction by such investigation, or by such negotiation or settlement of any resulting claims, as may be deemed expedient by the Company; (b) To defend in his name and behalf any suit against the assured seeking damages on account of such injury or destruction, even if such suit is groundless, false or fraudulent." The policy also contained the following: "This agreement is subject to the following conditions: B. Assistance and Cooperation of the Assured. The Assured shall cooperate with the Company, and upon the Company's request, shall assist in effecting settlement, securing evidence, and obtaining the attendance of witnesses. The Assured shall not voluntarily make any payment, assume any obligation or incur any expense other than for immediate surgical relief, except at his own cost. . . . H. Notice of accident. In the event of accident written notice shall be (Coverage A and B) given by or on behalf of the Assured to the Company or any of its authorized agents as soon as is reasonable thereafter. Such notice should contain information respecting the time, place and circumstances of the accident, with the name and address of the injured and any available witnesses. If such information is not reasonably obtainable, particulars to identify the Assured shall constitute notice. The Assured shall keep the Company advised respecting further developments in the nature of claims or suits when and as they come to his knowledge." The limit of the policy for injuries to any one person was five thousand dollars.

The appellee, Holiman, a resident of Winona, Montgomery county Mississippi, was injured in an automobile accident occurring between Winona and Vaiden on September 29, 1931. The automobile in which he was riding was owned by R. C. Watson, and was being driven by Otis Brister. Watson, the assured, was notified immediately after the accident, and was present in the physician's office when Holiman was receiving first aid medical attention. Some time thereafter, Watson became involved financially, and employed an attorney to make settlement with his creditors. The appellee, Holiman, employed said attorney to...