Wehrhahn v. Dearborn Casualty Underwriters

• Decision Date: 10 January 1928
• Docket Number: No. 19899.,19899.
• Citation: 1 S.W.2d 242
• Parties: CARL WEHRHAHN (PLAINTIFF-GARNISHEE), RESPONDENT, v. FORT DEARBORN CASUALTY UNDERWRITERS OF CHICAGO, ILLINOIS (GARNISHEE OF CORNELIUS D. MOYNIHAN), APPELLANT.<SMALL><SUP>*</SUP></SMALL>
• Court: Missouri Court of Appeals

1 S.W.2d 242

CARL WEHRHAHN (PLAINTIFF-GARNISHEE), RESPONDENT, v. FORT DEARBORN CASUALTY UNDERWRITERS OF CHICAGO, ILLINOIS (GARNISHEE OF CORNELIUS D. MOYNIHAN), APPELLANT.^*

No. 19899.

St. Louis Court of Appeals. Missouri.

Opinion filed January 10, 1928.

Appeal from the Circuit Court of the City of St. Louis. — Hon. H.A. Hamilton, Judge.

AFFIRMED.

Geers & Geers for appellant.

(1) The policy of insurance herein involved provides indemnity against loss by reason of the liability imposed by law upon the assured for damages on account of bodily injuries accidentally suffered by any person by reason of the ownership, maintenance or use of assured's automobile. This is a contract of indemnity against loss, as distinguished from a contract of indemnity against liability. There is a well-recognized difference between contracts of indemnity against loss and contracts of indemnity against liability. In the former the insurance company does not become liable until the assured has paid the loss, whereas, in the latter case, the obligation of the insurance company becomes fixed when the liability attaches to the assured. Klotzbach v. Bull Dog Auto Fire Ins. Assn., 267 S.W. 39; Conqueror Zinc & Lead Co. v. Aetna Life Ins Co., 133 S.W. 156; Van Reen v. Aetna Life Insurance Co., 209 Fed. 691; Aetna Life Ins. Co. v. Bowling Green Gaslight Co., 150 Ky. 732, 43 L.R.A. (N.S.) 1128, 150 S.W. 994. (2) The rule of construction against assured will govern these indemnity or insurance contracts, as the law does not favor forfeitures. Evansville Ice & Storage Co. v. Fidelity & Casualty Co. of N.Y., 61 Ind. App. 194; Aetna Life Ins. Co. v. Bowling Green Gaslight Co., supra. (3) Such construction should be given as to render effective all the various provisions of the contract. Aetna Life Ins. Co. v. Bowling Green Gaslight Co., supra. (4) No recovery can be had under the policy sued on until the assured sustains a loss by the payment of the liability, or until he has actually paid the amount of a judgment. Carter v. Aetna Life Ins. Co., 76 Kan. 275, 11 L.R.A. (N.S.) 1155; Cushman v. Carbondale Fuel Co., 122 Iowa, 656; Puget Sound Imp. Co. v. Frankfort Marine Accident & Plate Glass Co., 52 Wash. 124. (5) Payment of the judgment is essential before suit can be maintained upon a policy which is one of indemnity against loss. Stevens v. Pennsylvania Casualty Co., 135 Mich. 189; Georgia Casualty Co. v. Bowron, 233 Fed. 89; Bowron v. Georgia Casualty Co., 233 Fed. 673; Van Reen v. Aetna Life Insurance Co., 209 Fed. 691; Little Calaba Coal Co. v. Aetna Life Ins. Co., 192 Ala. 42; Goodman v. Georgia Life Insurance Co., 189 Ala. 130, citing authorities; Campbell v. Maryland Casualty Co., 52 Ind. App. 228; West Riverside Coal Co. v. Maryland Casualty Co., 155 Iowa, 161, 48 L.R.A. (N.S.) 145; Fidelity Casualty Co. of N.Y. v. Martin, 163 Ky. 12; Lowe v. Fidelity & Casualty Co. of New York, 170 N.C. 445; Ford v. Aetna Life Insurance Co., 70 Wash. 129.

Sterling P. Bond and James J. O'Donohoe for respondent.

(1) The policy in question insures against loss by reason of the liability imposed by law upon the assured for damages on account of bodily injuries accidentally suffered by any person by reason of the ownership, maintenance or use of assured's automobile, as distinguished from reimbursement for loss by reason of payment of judgment. Century Realty Co. v. Insurance Co., 179 Mo. App. 123; McManus v. Tralles, 253 S.W. 406; Swanson v. Georgia Casualty Co., 287 S.W. 455; Murgic v. Fort Dearborn Casualty Underwriters, 243 Ill. App. 650 (certiorari denied by Supreme Court). The appellant is a corporation of the State of Illinois and the doctrine of the Illinois courts is binding on all other courts under the full faith and credit clause of the National Constitution. Modern Woodmen of America v. Mixer, 267 U.S. 544. (2) The courts have decided that regardless of what is commonly called the "no action" clause, where an action is brought by a third party against the assured under an indemnity policy a judgment in the action becomes as between plaintiff, assured and the insurance company, a debt owing unconditionally by the company to assured, which may be reached by garnishment. Swanson v. Georgia Casualty Co., 287 S.W. 455; Reilly v. K. City Cas. Co., Garnishee, 151 Minn. 1; Anoka L. Co. v. Fid. & Cas. Co., 63 Minn. 286; Patterson v. Adan, Maryland Cas. Co., Garnishee, 119 Minn. 308; Mahr v. Maryland Cas. Co., 132 Minn. 336; Standard Printing Co. v. Fidelity & Deposit Co., 138 Minn. 304; Powers v. Wilson, Georgia Cas. Co., Garnishee, 139 Minn. 309; Blanton v. Cotton Mills Cas. Co., Garnishee, 103 Kans. 118; Capelle v. U.S. Fidelity & G. Co., 80 N.H. 481; Hoven v. Emp. L. & A. Corp., Garnishee, 93 Wis. 201; Illinois Surety Co. v. Maguire, 150 Wis. 544; Griffin v. Gen. Cas. & S. Co., 231 Mich. 642; Stephens v. Penn. Cas. Co., 135 Mich. 189; Ross v. Amer. Emp. L. Ins. Co., 56 N.J. Eq. 41; Pickett v. Cas. Co., 60 S.C. 477; Meyers v. Continental Cas. Co., 12 Fed. (2d) 53, 8th Circuit; American Indemnity v. Fellbaum, 114 Tex. 127; Amer. Emp., etc., v. Fordyce, 62 Ark. 162; Farmers H.W. Co. v. Cas. Co., 184 Iowa, 773; Davies v. Maryland Cas. Co., 89 Wash. 571; Fenton v. Poston, 114 Wash. 217; Fullers Acc. Emp. Liability Insurance, pp. 452-455; Maryland Cas. Co. v. Peppard, 53 Okl. 515; Fritchie v. Extract Co., 197 Pa. St. 401; Beasley v. Newell, 40 S.C. 16; Rood on Attachments and Garnishments (1901), 147; Fenton v. Fidelity & Cas. Co., 36 Or. 283; 14 R.C.L., p. 1322; 15 Cyc., p. 1036. (3) Appellant took full charge of the damage suit and "independently of any policy provision it is a rule that one who participates in litigation and openly and actively assumes and manages its prosecution or defense, although a stranger to it, is concluded by the judgment rendered therein.' Metropolitan Cas. Ins. Co. v. Albritton, 282 S.W. 187 (authorities cited); Strong v. The Phoenix Ins. Co., 62 Mo. 289; Authorities under point 2, supra. (4) The words "to defend," as used in the policy (Abs., p. 18), mean to pay the judgment. Sanders v. Ins. Co., 72 N.H. 485. (5) The policy stipulates that: "No suit or action on this policy for the recovery of any claim hereunder shall be sustainable in any court of law or equity unless the assured shall have fully complied with the foregoing requirements." The "foregoing requirements" do not require payment of judgment. Hence, the stipulation is tantamount to saying that if the "foregoing requirements" have been fully complied with, then the appellant is liable to assured for the judgment. Howell v. Ins. Co., 215 Mo. App. 386, certiorari quashed, 305 Mo. 607. (6) To hold that the policy in question is a reimbursing one would render the policy void because of want of insurable interest and in encouraging strife and promoting litigation between insurer, assured and injured third parties.

BECKER, J.

On July 19, 1923, the garnisher, as plaintiff, commenced an action in the circuit court of the city of St. Louis against Cornelius D. Moynihan, as defendant, for personal injuries sustained by him on May 11, 1923, when he was struck and injured by an automobile owned, controlled, maintained, used and operated by Moynihan.

Moynihan carried a policy of insurance with the garnishee, Fort Dearborn Casualty Underwriters, indemnifying him against any loss by reason of liability imposed by law upon the assured for damages on account of bodily injuries suffered by any person by reason of the ownership, maintenance or use of the automobile involved in the accident.

The policy also provided that the Underwriters would defend, in the name of Moynihan, any action brought against him to enforce a claim for bodily injuries, whether groundless or not, and under that clause of the policy the garnishee herein defended the suit. The trial in that case resulted in a verdict and judgment against the defendant Moynihan and in favor of the plaintiff for $1,797. A motion for new trial was in due course overruled. No appeal was taken.

Execution was issued on this judgment and returned nulla bona, and thereupon a summons in garnishment was issued and served upon the appellant, Fort Dearborn Casualty Underwriters, as garnishee.

The garnisher filed the conventional interrogatories to be answered by the garnishee, which answers in effect denied any indebtedness on the part of the garnishee to the defendant Moynihan. The reply of the garnisher was to the effect that at the time of the service of the writ of garnishment upon the garnishee, said garnishee was indebted to Moynihan, defendant, and the garnisher (judgment creditor) in the sum of $1,797, together with the costs in the damage suit in which the garnisher had judgment against the defendant Moynihan, by reason of an indemnity policy issued by the garnishee agreed to indemnify said Moynihan, by which policy the garnishee agreed to indemnify said Moynihan, defendant, against loss by reason of liability imposed by law upon the assured for damages on account of bodily injuries, etc.

It is conceded that the garnisher had judgment against the defendant Moynihan in a suit defended by the garnishee in the name of the defendant; that a liability policy had been issued by the garnishee which was in effect at the time plaintiff was injured, and that the said policy covered the automobile owned and operated by the defendant Moynihan at the time of said injury, and that no sum had been paid the defendant Moynihan by the garnishee on account of said policy.

On a trial of the case the jury returned a verdict finding that the garnishee was indebted to the defendant Moynihan in the sum of $2,116.36. From the resulting judgment the garnishee in due course brings this appeal.

It needs no citation of authorities to the general rule that in garnishment proceedings the plaintiff in the action acquires no greater rights against the garnishee than the defendant himself possesses. Service of the garnishment order does not...