Tyger River Pine Co. v. Maryland Cas. Co.

• Decision Date: 17 July 1933
• Docket Number: 13669.
• Citation: 170 S.E. 346,170 S.C. 286
• Parties: TYGER RIVER PINE CO. v. MARYLAND CASUALTY CO.
• Court: South Carolina Supreme Court

170 S.E. 346

170 S.C. 286

TYGER RIVER PINE CO. v. MARYLAND CASUALTY CO.

No. 13669.

Supreme Court of South Carolina

July 17, 1933

Appeal from Common Pleas Circuit Court of Union County; T. S. Sease Judge.

Action by Tyger River Pine Company against Maryland Casualty Company. From a judgment for plaintiff, defendant appeals.

Affirmed.

Osborne & Butler, of Spartanburg, for appellant.

J Gordon Hughes, of Union, and Donald Russell, of Spartanburg for respondent.

BONHAM Justice.

Erwin Chesser was, in January, 1928, in the employ of the respondent at its lumber mill in Union county, S.C. On the 18th day of January he suffered an injury while engaged in the duties of his employment which resulted in the permanent injury of one of his arms. The Tyger River Pine Company carried a policy in Maryland Casualty Company which insured it for any sum not exceeding $5,000 it might be called on to pay for injuries suffered by any of its employees Efforts at settlement of any claim Chesser might make against respondent failed of consummation. Whereupon he brought suit against the Tyger River Pine Company and recovered a verdict for $7,000 which was affirmed on appeal. See Chesser v. Tyger River Pine Co., 155 S.C. 356, 152 S.E. 646. Thereupon the respondent brought this action against the appellant. A demurrer was interposed by the defendant, the appellant here, which was heard on circuit, and overruled, by Judge Ramage. His order in the premises was affirmed by this court. See Tiger River Pine Co. v. Maryland Casualty Co., 163 S.C. 229, 161 S.E. 491, 492.

This action is brought to recover the sum of $2,162.20 which the Tyger River Pine Company alleges it was compelled to pay to Chesser on his judgment against it over and above the amount of $5,000 of the policy which the Tyger River Pine Company carried in the casualty company. The complaint alleges the issuance to plaintiff by the casualty company, in consideration of a stated premium, of a policy which undertook to insure it, for one year, against loss for any liability imposed by law upon Tyger River Pine Company for damages for any injuries, including death, resulting therefrom, accidentally suffered, or alleged to have been suffered, by any employee of the plaintiff, while engaged within his employment, limited to $5,000 for any one person. The complaint alleges, further, that the defendant, Maryland Casualty Company, by the terms of the policy contracted to defend, in the name and on behalf of the plaintiff, the defendant to have exclusive control of such defense, any suits or other proceedings which might at any time be instituted against the plaintiff on account of bodily injuries suffered, or alleged to be suffered, by any employee of the plaintiff, even though such claims and suits were wholly groundless and false or fraudulent, and to pay all costs taxed against plaintiff in such suits; that under the provisions of the policy the casualty company reserved to itself the exclusive right to compromise or settle all suits or claims, and the plaintiff was specifically prohibited from making any compromise or settlement, or making any expenditures in connection with any such injuries unless first authorized to do so by the defendant, in writing. The complaint then alleges that an accident befell one of its employees, Erwin Chesser, while in plaintiff's employ, by which he sustained serious bodily injuries; notice of which accident was immediately given to defendant; that for practically seven months thereafter the defendant dallied and delayed in making any investigation, and although plaintiff urged upon it the necessity to protect plaintiff's and its own interests by compromising and settling the claim, refused to make any proper investigation, and without thought of or regard to the rights of plaintiff, refused and neglected to make any honest effort to settle the claim, although Chesser was at all times willing and anxious to settle the claim at a small and reasonable figure which a person of ordinary prudence would have accepted; that defendant giving no thought to plaintiff's rights in the premises, recklessly, negligently, and in bad faith dallied with the offers of settlement for such unreasonable time that they were withdrawn and suit was brought by Chesser against the Tyger River Pine Company which resulted in a verdict for Chesser in the sum of $7,000. That after the rendition of this verdict Chesser, through his attorneys, offered to settle the judgment of $7,000 for the sum of $5,000, but the casualty company, thinking only of its own interests, and in disregard of the interests of this plaintiff, negligently, recklessly, contumaciously, fraudulently, and in bad faith refused to settle for the sum offered, which would have saved the plaintiff harmless, insisted upon taking an appeal from the judgment, although any prudent person would have known that the appeal was without merit; that the appeal was dismissed and in consequence thereof this plaintiff was compelled to pay in settlement of said judgment the sum of $2,162.20 over and above the sum of $5,000 paid by the casualty company under the policy of indemnity. That the loss thus suffered by plaintiff was due to the fact that the defendant, exercising its reserved rights under the policy of indemnity issued by it to plaintiff, took exclusive control and management of all negotiations for compromise and settlement of Chesser's claim and negligently, recklessly, willfully, contumaciously, and in bad faith, with a view to its own interests alone, and in disregard of plaintiff's rights and interests, neglected and refused to settle the claim before suit brought, and after judgment rendered continued to refuse to settle it, although such settlement was prudent and reasonable to be made.

The prayer is for the sum of $2,162.20 and interest and costs.

The defendant filed a demurrer, which was overruled, and on appeal the order dismissing the demurrer was affirmed as is hereinbefore stated.

The answer admits the execution of the policy of indemnity, but denies that its terms are correctly set forth in the complaint, and it sets out the exact language of the paragraphs pertinent to the issues offered by the complaint, and attaches a copy to the answer; it admits that Chesser suffered an injury while in the employ of the Tyger River Pine Company, and that negotiations and correspondence ensued with reference to a compromise settlement with him. That in all such negotiations and correspondence defendant acted in perfect good faith in the light of the information furnished by plaintiff. It admits that when notified of the suit by Chesser against the Tyger River Pine Company it took control and direction of the defense thereof. Admits the allegations of the appeal to the Supreme Court, that the appeal was dismissed and that plaintiff did pay on the judgment the sum of $2,000 and $162.20 interest thereon. It denies each and every allegation of the complaint not thus admitted.

The present action was heard by Judge T. S. Sease and a jury at the May, 1932, term of the court of common pleas for Union county and resulted in verdict...