West v. Monroe Bakery, 39316

Decision Date20 March 1950
Docket NumberNo. 39316,39316
Citation46 So.2d 122,217 La. 189
PartiesWEST et ux. v. MONROE BAKERY, Inc., et al.
CourtLouisiana Supreme Court

Thompson, Thompson & Sparks, Monroe, for applicants.

Theus, Grisham, Davis & Leigh, Monroe, for respondent.

MOISE, Justice.

We granted writs from a judgment of a divided Court of Appeal, Second Circuit, where an insurance company has been made by an act of the Legislature an obligor in solido to a third person who has been injured through the negligence of the insurance company's assured. The district court rendered judgment in solido against the Monroe Bakery Company, Inc., and the General Casualty Company of America for the sum of $5,000.00, with interest from judicial demand. The assured bakery company acquiesced in the allegation of negligence on which judgment was founded by not taking an appeal.

An analysis of our jurisprudence considered by the Appellate Court in reaching its conclusion discloses that with two exceptions Act 55 of 1930 has been treated consistently as conferring substantive rights on third parties to contracts of public liability insurance, which become vested at the moment of the accident in which they are injured, subject only to such defenses as the tort-feasor himself may legally interpose. The facts in each case may be different, but save for Howard v. Rowan, La.App., 154 So. 382, and State Farm Mutual Automobile Insurance Company v. Grimmer, D.C., 47 F.Supp. 458, the result has been the same--the upholding of the statutorily granted right against the insurer regardless of a stipulation to the contrary between the insurer and the insured in the policy contract and regardless of dilatory conduct on the insured's part in giving notice.

Bougon v. Volunteers of America, La.App.1934, 151 So. 797, involved an action brought against the employer of the tort-feasor and its liability insurance carrier. The insurance policy which had been issued contained a clause forbidding any action against the carrier by anyone until "the amount of loss shall have been fixed either by a final judgment against the assured by the court of last resort, after trial of the issue, or by agreement between the parties with the written consent of the company." 151 So. 797 at page 800.

The insurer contended that the direct right of action given to a third person under Act 55 of 1930 was limited to those cases in which the policy did not prohibit such actions. In rejecting this defense, the Court said, 151 So. at page 802:

'Considering both acts together, the act of 1918 and the act of 1930, it seems to us too plain for argument that it represents a determination upon the part of the Legislature to extend the rights of an injured party as against the insurer. In the beginning, an action could only be maintained in the event of the insolvency of the insured. Later this right of action was facilitated by a definition of insolvency and a conditional right of action conferred unrelated to the insolvency of the insured and capable of being exercised initially as against the insurer alone, or in conjunction with the insured as a solidary obligation.

* * *

* * *

'Much has been said during the oral argument of this case concerning the hardship to the insurer which the interpretation of the statute we have adopted would involve. If there be any injustice to the insurer as a result of this statute, the obvious relief is through legislative action. * * *'

While delayed notice was not the special issue presented in the Bougon case, the general issue was identical with the one in this case--whether the right of action conferred on an injured third person by Act 55 of 1930 vests immediately or whether it is contingent on and subordinate to any stipulation between the insurer and the insured, contained in the policy contract. As a matter of fact, the policy clause upon which the insurer in the Bougon case attempted to rely is practically verbatim with the clause contained in the General Casualty Company contract entitled '5. Action Against Company', above quoted.

In Duncan v. Pedare, La.App.1935, 161 So. 221, suit was brought against an automobile owner and his insurer by a third person invitee, who had been injured when the automobile (then being operated by another invitee) struck a deep rut. The insurer first received formal notice of the accident 8 months 7 days after its occurrence; and it claimed that delay in giving notice released it from liability, there having been a policy stipulation which provided:--"Immediate written notice of any accident with the fullest information obtainable at the time must be forwarded to the home office of the company or its authorized representative. If a claim is made on account of such accident the assured shall give like notice thereof, and if suit is brought to enforce such a claim the assured shall immediately forward to the company every summons or other process as soon as same shall be served on him." Quoted in 161 So. 221, 227.

The Court refused to permit the insurer to avail itself of that defense, saying:--'* * * the act (Act 55 of 1930) * * * does not impose on the injured party the duty to give the statutory notice of the accident which causes him injury. This duty under the policy and the statute which recognizes the policy contract is imposed on the assured only.' 161 So. 221, at page 228.

On rehearing of that case, Duncan v. Pedarre, La.App.1935, 164 So. 498, the Court of Appeal for the First Circuit reversed itself as to its prior finding of negligence on the part of the operator, and having found there was none, it naturally rejected the suit as to both defendants. It did say, what was obiter to the decision, that the owner's failure to notify the insurer released the latter from liability under the policy. The dissenting opinion adhered to the initial decision, and we quote therefrom a comment on the purpose of Act 55 of 1930 which summarizes the trend toward a liberal interpretation of remedial legislation, 164 So. 498, 501, 502:----

'The question in this case which was argued the considered at more length was as to the sufficiency of the notice given the defendant insurance company. The facts as to that are that Pedarre, the insured, gave the company notice as soon as a demand was made on him. I adhere to what we said in our first decision that this was a reasonable notice under the circumstances of the case. * * *

'I also believe the doctrine of Edwards v. Fidelity & Casualty Co., 11 La.App. 176, 123 So. 162, decided by the Court of Appeal for the Parish of Orleans, is sound. In that case, unlike the present, without any reason to justify such action, the assured did not notify his insurer until some eleven months after the accident. The Court of Appeal for the Parish of Orleans held that the immediate notice clause did not apply to the injured person who has a direct cause of action under Act No. 253 of 1918, § 1, now amended by Act No. 55 of 1930, § 2. The court said that clause in the policy applies only to cases where the insured has paid a damage claim and seeks to be reimbursed by his insurer, where the insured has failed to give reasonable notice. It is true that the Court of Appeal for North Louisiana has held differently in the case of Howard v. Rowan et al., [La.App.], 154 So. 382; but as we said in our first opinion, the doctrine of the Edwards case seems more reasonable, for if the injured person is cut off by failure of the insured to give a notice, or to give a reasonable notice, then the independent action which exists in favor of the injured person under Act No. 55 of 1930 would be wholly dependent on the will of another. The law does not require the registration of public liability policies and there's no way for the injured person to know if there is a policy, or where there is one, the name of the company, and nature of the policy. It would seem unreasonable to interpret Act No. 55 of 1930 to mean that the injured person has an independent, direct action against the insurance company, but that this action can be defeated by the failure of an immediate notice by the insured, where the injured person has to no way whatever to see that such notice is given; and particularly where the policy provides only for the giving of notice by the insured, not by the injured party. Such is apparently not the intention of the lawmakers.'

We now come to the case of Edwards v. Fidelity & Casualty Co., 11 La.App. 176, 123 So. 162. There the injured third party secured a judgment against the tort-feasor and, the execution thereon having been returned 'nulla bona', brought suit directly against the insurer of the tort-feasor, under Act 253 of 1918 (which was amended and re-enacted by Act 55 of 1930, a year after the Edwards decision.) One of the defenses urged by the insurer was a delay of 11 months in receiving notice of the accident. The policy also contained a provision that the assured "agreed and bound himself to give immediate written notice of any accident which might occur within the terms and conditions of said policy, at the same time giving to respondent the 'fullest information obtainable at the time' of all the details and circumstances of the accident." Quoted in 11 La.App. 176, 177; 123 So. 162, 163.

It further provided, 11 La.App. 177, 123 So. 162:--"The company shall not be liable to pay any loss nor shall any action be brought against the company to recover under this policy until a final judgment shall have been recovered against the assured in a suit covered hereby. If an execution on a judgment recovered in a suit against the assured covered by this policy is returned unsatisfied, the judgment creditor shall have a right of action to recover the amount of such judgment against the company to the same extent that the assured would have had to recover against the company had the assured paid the said judgment; but in no event shall the company's liability...

To continue reading

Request your trial
93 cases
  • Lewis v. Manufacturers Casualty Ins. Co.
    • United States
    • U.S. District Court — Western District of Louisiana
    • September 24, 1952
    ......Davies v. Consolidated Underwriters, 199 La. 459, 6 So.2d 351; West v. Monroe Bakery, 217 La. 189, 46 So. 2d 122; Buxton v. Midwestern Ins. ......
  • Collins v. American Automobile Insurance Company
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • February 14, 1956
    ......West v. Monroe Bakery, 217 La. 189, 46 So.2d 122; Jackson v. State Farm Mutual ......
  • Buxton v. Midwestern Ins. Co.
    • United States
    • U.S. District Court — Western District of Louisiana
    • January 11, 1952
    ......'" West v. Monroe Bakery, 217 La. 189, 46 So.2d 122, 130. (Emphasis by the Court.) ......
  • Wynn v. Philip Morris, Inc.
    • United States
    • U.S. District Court — Northern District of Alabama
    • April 28, 1999
    ...... West End v. State, 138 Ala. 295, 36 So. 423 [(1903)]. .         But ... West v. Monroe Bakery, 217 La. 189, 46 So.2d 122 [(1950)]; Jackson v. State Farm Mutual ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT