Walker v. New Amsterdam Cas. Co.

• Decision Date: 15 July 1930
• Docket Number: 12950.
• Citation: 154 S.E. 221,157 S.C. 381
• Parties: WALKER v. NEW AMSTERDAM CASUALTY CO.
• Court: South Carolina Supreme Court

154 S.E. 221

157 S.C. 381

WALKER v. NEW AMSTERDAM CASUALTY CO.

No. 12950.

Supreme Court of South Carolina

July 15, 1930

Appeal from Richland County Court; M. S. Whaley, Judge.

Action by Harry F. P. Walker against the New Amsterdam Casualty Company. Judgment for plaintiff, and defendant appeals.

Reversed and remanded. Jas. B. Murphy, G. Duncan Bellinger, and Geo. H. Wittkowsky all of Columbia, for appellant.

C. T Graydon and Roger Heyward, both of Columbia, for respondent.

BLEASE J.

The complaint of the respondent alleged, and the appellant admitted the allegations, that on July 21, 1928, the respondent insured his Chrysler coach automobile with the appellant, and, in the contract of indemnity, the appellant "agreed to defend in behalf of the insured any claim or suit against the assured, even if groundless, brought on account of bodily injury or property damage covered by this policy and agreed by their policy or contract to pay any judgment recovered against this plaintiff up to the sum of Five Thousand ($5,000.00) Dollars as set forth in said policy"; that while the policy was of force, a suit was instituted in the court of common pleas for Richland county by Mrs. W. D. Love against the respondent and the automobile mentioned, covered by the policy, on account of an accident, occurring while the respondent was driving the said automobile, wherein Mrs. Love received injuries which suit the appellant failed to defend, and which resulted in a judgment against the respondent for the sum of $1,166.66 in favor of Mrs. Love, with court costs amounting to $10.15; that the respondent also incurred liability for attorneys' fees in the sum of $250; that the appellant had declined to pay the amount of the judgment to the respondent, and, accordingly, it had breached its contract with him. Judgment was demanded by the respondent against the appellant for the total sum of $1,426.81.

The respondent also set forth, which the appellant denied, allegations to the effect "that prior to the filing of said suit, due and timely notice had been given to the agents of the defendant (appellant) herein, and they knew of the existence of said claim which was covered by said policy."

In defense, the appellant alleged, and that allegation is admitted by the respondent, that the contract of insurance contained the following clause: "The assured shall give immediate written notice of any accident, and like notice of any claim or suit resulting therefrom, together with every summons or other process, to the Executive office of the company at Baltimore, Maryland, or to its authorized representative."

In connection with that clause of the contract, the appellant averred a violation thereof by the respondent, and set forth that the accident, wherein Mrs. Love was injured, occurred on or about August 14, 1928, and no written notice was given it by the respondent until on or about September 28, 1928; and that the appellant, upon receipt of that notice, given too late, had denied liability to the respondent, because there had been a forfeiture of the policy, according to its terms, for the failure of the respondent to "give immediately written notice" of the accident as required by the terms of the contract.

Along with the defense of failure to give the required notice, and not as separate defenses, the appellant set up what it now contends was the defense that the respondent did not make proper effort "to minimize his damages in every manner possible"; and the other defense that there was "collusion" on the part of Mrs. Love and the respondent to require the appellant to pay the alleged claim of Mrs. Love, without any intention that Mrs. Love should ever collect any damages from the respondent. The contention of the appellant that it set up the defense of collusion or fraud on the part of the respondent is contested by the respondent.

The case proceeded to trial in the county court of Richland county before Hon. M. S. Whaley, the judge of that court, and a jury. After making certain rulings as to the issues involved, and hearing the evidence in the case, which he decided was responsive to those issues, the trial judge refused to direct a verdict in favor of the appellant, and directed one in favor of the respondent for the sum of $1,166.66. The amount of this judgment was the amount of the judgment and costs obtained against the respondent by Mrs. Love. The question of the attorneys' fees, alleged by the respondent, and denied by the appellant, seems not to have been passed on by the county judge, and was reserved, it appears, for future determination. Because of the adverse judgment, the appellant has come to this court.

There are six exceptions. Perhaps all of them, with the exception of only one, are not in accord with the rules of this court, properly interpreted. The exceptions and the "Statement" have but one virtue--they are concise.

Appellant's first contention is that there was error on the part of the judge "in ruling out the question of collusion between Mrs. Love and the assured." We suppose appellant intends by the use of the word "collusion" to suggest that it set up a defense of fraud on account of the conduct of the respondent and Mrs. Love.

"Collusion in judicial proceedings is a secret agreement between two persons that the one should institute a suit against the other, in order to obtain the decision of a judicial tribunal for some sinister purpose. ***" 11 C.J. 1220.

"Collusion" is fraud. Id. If the appellant desired to plead fraud or collusion on the part of the respondent and Mrs. Love, the appellant had the right to do so, if it had the facts upon which to found that defense. We cannot find in the answer, however, any language which we can construe as setting up fraud or collusion. In connection with its rather indefinite effort to allege that the respondent did not minimize his damages, as he should have done, the appellant did say, in effect, that Mrs. Love had made statements that she would not hold the respondent liable for any damage which she might have suffered, and that her suit against the respondent was brought for the sole purpose of making the appellant pay such damages as might be awarded her, and that all these facts were well known to the respondent.

Said Mr. Justice Gage in Brookland Bank v. Martin, 105 S.C. 72, 89 S.E. 546, 547: "A complaint for fraud, like an indictment for crime, ought to signalize first the intent, and then the words spoken, and the acts done to carry out the intent." The same rule as to a complaint based on fraud should apply, of course, to an answer which seeks to allege fraud.

Referring to the quoted language of Mr. Justice Gage, Mr. Justice Stabler, speaking for our court, said this: "While the foregoing statement was not necessary to the decision of that case, it may be taken as an expression of the court's view that the fraudulent intent must be pleaded. We do not think, however, that the intent need be 'signalized' by express averment, but it is sufficient if it can be legitimately inferred from the allegations of the pleading." Smith v. Vandiver, 149 S.C. 540, 147 S.E. 645, 646.

Our courts are very liberal as to pleadings, but we cannot go too far with this liberality. A defendant ought to know from the language of the complaint of the plaintiff whether or not he is charged with fraud. Likewise, the plaintiff in an action should be plainly advised if the defendant in his answer intends to charge him with fraud. The language of the answer in this case was not sufficient to give the respondent notice that the appellant intended to charge any fraud or collusion. At most, the answer intimated or insinuated things; it did not allege. The trial judge was right in his ruling as to this matter.

Appellant's second exception charges error on the part of the court in not permitting it to go into the question of the respondent's liability to Mrs. Love de novo. The third exception questions the ruling of the court to the effect that the testimony of "Mrs. Love and others" would not be relevant on the question of minimizing damages. Both exceptions will be considered together. While in the answer the appellant did say "it was the duty of...