Wright v. Schick
| Decision Date | 20 July 1938 |
| Docket Number | 26917. |
| Citation | 134 Ohio St. 193,16 N.E.2d 321 |
| Parties | WRIGHT v. SCHICK et al. |
| Court | Ohio Supreme Court |
Syllabus by the Court.
SC21. Under the terms of Section 9510-4, General Code (108 Ohio Laws, pt. 1, 386), providing in effect that when one has recovered a final judgment against a defendant for damages on account of personal injuries, he may maintain an action against such defendant and his insurer to subject the proceeds of a liability insurance policy to the satisfaction of such judgment, the defendant, becoming a party to such an action, is privileged to participate in the proceedings for the protection of his interests.
2. If, in such an action, the defendant and the insurer were in reality adversaries on the controlling issue as to whether the insurance policy was in force at the time of the plaintiff's injuries, and such issue is in fact litigated and finally determined, it is res judicata as between defendant and the insurer in any subsequent action wherein the defendant and the insurer are aligned as adverse parties on such issue.
3. When the plaintiff recovers a final judgment against the insurer upon the sole basis that the insurance policy was in force at the time of the injuries, such adjudication is determinative of the result in an action brought under Section 9510-4, General Code (108 Ohio Laws, pt. 1, 386), by another plaintiff who was personally injured by the defendant at the same time and in the same occurrence as the plaintiff first mentioned, and in which latter action the defendant and the insurer are again opposing parties on the controlling issue as to whether the insurance policy was operative at the time of the injuries.
This case is here because the judges of the Court of Appeals of the Third Appellate District, sitting in Cuyahoga county certified the record, finding the judgment herein in conflict with the judgment of another Court of Appeals in the case of Althea Wright v. State Automobile Mutual Ins. Co., being cause No. 15015 on the docket of the Court of Appeals of Cuyahoga county.
About midnight of July 3, 1932, an automobile owned and driven by Karl W. Schick collided with another motor vehicle occupied by Althea and Bertie Wright, resulting in personal injuries to them. In May of 1932 Schick had been issued an automobile liability insurance policy by the State Automobile Mutual Insurance Company. He duly notified it of the injuries to the Wrights, but was advised that the policy was not in force when such injuries occurred because he had failed to pay the installment of the premium due on July 1, 1932, as stipulated in the policy.
Althea and Bertie Wright commenced separate damage suits against Schick in the Court of Common Pleas of Summit county. The insurance company declined to assume defense of the actions for the reason previously stated. Each of the Wrights secured a judgment against Schick.
Neither of the judgments being paid, the Wrights filed individual actions in the Court of Common Pleas of Cuyahoga county, under authority of Section 9510-4, General Code, as then in effect (108 Ohio Laws, pt. 1, 386), naming insurance company and Schick as defendants. In the Althea Wright Case Schick was not served with summons and filed no pleading. However, he appeared at the trial of the case and was cross-examined as a party defendant to the action, by Althea Wright's counsel. His testimony was favorable to her contention that the insurance was in force at the time of her injury, and she was successful in obtaining a verdict and judgment against the company.
Proceedings in error we prosecuted by the company to the Court of Appeals. Schick was designated a defendant in error in the petition in error, and served with summons. The Court of Appeals affirmed the judgment below, and a motion to require the Court of Appeals to certify its record was overruled by the Supreme Court.
Thereafter, the Bertie Wright Case, involving the identical issue, came on for hearing before the Court of Common Pleas of Cuyahoga county, in which both the insurance company and Schick had been served with summons. Schick filed an answer and cross-petition, admitting all of the allegations of the petition and alleging that the policy of insurance was in force when Bertie Wright was injured, and that such matter was res judicata by reason of the judgment in the Althea Wright case.
By consent, the pleadings, evidence and exhibits in the Althea Wright case were offered as evidence and exhibits in the Bertie Wright case, and constitute a part of the bill of exceptions.
During the pendency of the action Bertie Wright died, and the case was revived in the name of McFarren Wright, administrator of her estate.
After all the evidence was in, motions for a directed verdict by McFarren Wright, administrator, and by Schick on his cross-petition, were granted, and judgment was entered in favor of the administrator and against the insurance company on the theory of res judicata--that the judgment in the Althea Wright case had established its liability and was conclusive against it.
An appeal on questions of law was taken to the Court of Appeals, where the judgment of the trial court was reversed and final judgment entered for the insurance company on the grounds that the judgment in the Althea Wright case was not conclusive against the company under the doctrine of res judicata and that the company had not waived the provisions of the policy requiring payment of the second installment of the premium on Schick's liability policy by July 1, 1932, and hence, under the terms of the policy, he was not insured when the Wrights were injured.
Harrison & Marshman, of Cleveland, for appellant McFarren Wright, administrator.
Harry E. Nusbaum, of Canton, for appellant Karl W. Schick.
Squire, Sanders & Dempsey, of Cleveland, and H. F. Holscher and B. B. Bridge, both of Columbus, for appellee State Automobile Mut. Ins. Co.
The appellants seriously urge that the controlling issue in both the Althea Wright and Bertie Wright cases was whether the insurance policy was in force when they were injured and, that issue having been litigated and determined in the affirmative in the Althea Wright case wherein Schick and the insurance company were adverse parties, such adjudication is conclusive as to the Bertie Wright case and requires a judgment accordingly under the doctrine of res judicata. This contention is deserving of careful consideration.
After having secured judgments against Schick in their tort actions, Althea and Bertie Wright brought their respective actions against the insurance company under favor of Section 9510-4, General Code (108 Ohio Laws, pt. 1, 386), which then read as follows:
'Upon the recovery of a final judgment against any * * * person * * * by any person * * * for loss or damage on account of bodily injury, * * * if the defendant in such action was insured against loss or damage at the time when the right of action arose, the judgment creditor shall be entitled to have the insurance money provided for in the contract of insurance between the insurance company and the defendant applied to the satisfaction of the judgment, and if the judgment is not satisfied within thirty days after the date when it is rendered, the judgment creditor may proceed in a legal action against the defendant and the insurance company to reach and apply the insurance money to the satisfaction of the judgment.'
The only ground of defense interposed by the insurance company was that Schick's liability insurance policy was not in force on July 3, 1932, when the Wrights sustained their bodily injuries, because he had failed to pay the installment of the premium due on July 1, 1932, in accordance with the terms of the policy.
It was maintained by the Wrights that such insurance policy was operative when they were injured, for the reason that the company by its conduct and through the representations of its duly authorized agent had waived the provisions of the policy as to the payment of the second premium installment by the date specified.
This was an issue of vital concern to Schick. Substantial judgments had been rendered against him, for which he stood liable. It would be to his gain should the Wrights secure satisfaction of those judgments by their proceedings against the insurance company, his insurer.
Section 9510-4, General Code, made express provision that in an action by the judgment creditor, the tort-feasor against whom a judgment has been recovered and his insurer should be made parties defendant. In such an action it becomes necessary to prove the existence of insurance as a condition precedent to recovery. As a party to such an action, the judgment debtor has a right to participate and if the insurance company denies liability he may act to establish its responsibility in furtherance of his own pecuniary interests.
In the Althea Wright case the issue of insurance or no insurance was squarely raised and fully litigated. The decision was adverse to the company. Schick was named a party defendant in the petition. He appeared at the trial and was cross-examined as a party defendant. The testimony he gave was strongly against the company, and when the company prosecuted error to the Court of Appeals he was made a party to the proceedings.
Under these circumstances, is the doctrine of res judicata properly invocable in the Bertie Wright case?
'Briefly stated, the doctrine of res judicata is that an existing final judgment or decree, rendered upon the merits, and without fraud or collusion, by a court of competent jurisdiction, is conclusive of rights, questions, and facts in issue, as to the parties or their privies, in all other actions or suits in the same or any other...
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