Summary
In Commercial Cas. Ins. Co. v. Skinner, 190 Miss. 533, 1 So.2d 225, the point of decision was chiefly procedural but it is appropriate to notice that the liability of the indemnity company was recognized as arising out of a collision between the automobile of the appellee and that of appellant's insured.
Summary of this case from National Mut. Casualty Co. v. ClarkOpinion
No. 34444.
March 24, 1941.
1. GARNISHMENT.
If a policy is one of indemnity against liability as distinguished from indemnity against loss actually sustained, an insurer is subject to garnishment by an injured person who has recovered judgment on a claim which is within the protection of the policy.
2. GARNISHMENT. Insurance.
Where to comply with statute requiring operator of public bus to furnish public liability or indemnity insurance, insurer issued policy agreeing to indemnify the insured against loss from liability arising from claims against insured and agreeing to pay any final judgment for personal injuries, including death and damages to property, the policy provided "indemnity against liability" and not mere "indemnity against actual loss," and, therefore, injured party recovering unsatisfied judgment for personal injuries against insured could maintain garnishment proceeding against the insurer (Code 1930, sec. 7124).
3. INSURANCE.
The purpose of requiring operator of public bus to carry insurance was for protection of public, and applicable provisions of the statutes requiring insurance become part of policy issued thereunder (Code 1930, sec. 7124).
4. INSURANCE.
Insurer could not escape liability under public liability policy issued to operator of public bus because number of motor in bus was different from number in policy, where bus was properly described except as to number of motor, and during previous year old motor had been replaced with a reconditioned motor, and insurer in issuing policy involved took description of bus from old policy (Code 1930, sec. 7124).
5. GARNISHMENT.
In judgment creditor's garnishment proceeding against judgment debtor's public liability insurer, record did not disclose any lack of co-operation by insured debtor with insurer which sought to escape liability because of alleged lack of co-operation.
6. GARNISHMENT.
In garnishment proceeding by judgment creditor against insurer which had issued public liability policy to judgment debtor, an operator of public bus, admitting insurer's telegram to Railroad Commission, stating that telegram might be accepted as binding bodily injury and property damage liability insurance coverages conforming with commission's requirements, over objection that the telegram was superseded by policy was not error, since the telegram was a connecting, fundamental basis of liability of the insurer (Code 1930, sec. 7124).
APPEAL from the circuit court of Marion county, HON. J.C. SHIVERS, Judge.
Jackson, Young Friend, of Jackson, for appellant.
If the policy is treated as a contract of indemnity against loss actually sustained, ordinarily the insurer is not subject to garnishment by the injured party, since no amount is due to the insured until payment has been made by him, and this is true regardless of the fact that the insured is insolvent and has no property out of which a judgment may be satisfied.
4 Am. Jur. 751, sec. 315; 41 A.L.R. 516.
A contract of insurance in the language of the policy in the present case is a contract of indemnity against loss, and not a contract of indemnity against liability.
Transylvania Cas. Ins. Co. v. Williams (Ky.), 273 S.W. 536; Fid. Cas. Co. v. Martin, 163 Ky. 12, 173 S.W. 307, L.R.A., 1917F, 924; London Lancashire Ind. Co. v. Cosgriff, 144 Md. 660, 125 A. 529; U.S.F. G. Co. v. Williams (Md.), 129 A. 660; Luger v. New Amsterdam Cas. Co., 116 Wn. 345, 199 P. 760, 37 A.L.R. 641; Coombs v. Hunt, 140 Va. 627, 125 S.E. 661, 37 A.L.R. 621; Am. Auto Ins. Co. v. Cone (Tex.), 257 S.W. 961; Glatz v. General Acc. F. L. Assur. Corp., 175 Wis. 42, 183 N.W. 683; Allen v. Aetna L. Ins. Co. (3 C.C.A.), 145 F. 881, 7 L.R.A. (N.S.) 958; Edward R. McLean, Ex'or et al. v. Ragsdale, 31 Miss. 701; Bedford v. Blythe, 74 Miss. 720, 21 So. 919; Hough v. Perkins, 3 Miss. 724; Employer's Liability Assur. Corp., Ltd., of London, England, v. Bodron, 65 F.2d 539.
The rule that garnishment will not lie, if the policy is one of indemnity against loss, was recognized in the Mississippi case of Employers' Liability Assur. Corporation, Ltd., of London, England v. Bodron, 65 F.2d 539, cert. den. 54 S.Ct. 208, 290 U.S. 698, 78 L.Ed. 600.
Even if the court would consider this policy of insurance as a contract of indemnity against liability, the garnishee, appellant here, is not liable on the policy, because the insured violated the provisions and conditions of the contract.
If there is no liability to the insured, there is no liability to a person who was injured.
Adams et al. v. Md. Cas. Co., 162 Miss. 237, 139 So. 453; Traveler's Ind. Co. v. Holiman, 174 Miss. 220, 164 So. 36; Downing v. Home Ind. Co. of N.Y., 169 Miss. 13, 152 So. 841.
The bus which was in the accident was not enumerated in the policy. If no bus in the accident was covered by the policy, there would be no liability to the insured.
Ambs v. N.J. Mut. Cas. Ins. Co., 154 A. 236, 9 N.J. Misc 404; Drewek v. Milwaukee Automobile Ins. Co. (Wis.), 240 N.W. 881; Adams v. Md. Cas. Co., 162 Miss. 237, 139 So. 453; Continental Cas. Co. v. Pearce, 170 Miss. 67, 154 So. 279; Am. Cas. Co. v. Md. Cas. Co., (Pa.), 20 F. Supp. 561; Cooper v. Fraulka et al. (Wis.), 245 N.W. 154; Sheeren v. Gulf Ins. Co. of Dallas, Tex. (La.), 174 So. 380.
Where the motor in a truck described in an insurance policy was changed, it was a question for the jury to determine as to whether the truck involved in the accident was the same as the one described in the insurance policy.
33 C.J. 130, sec. 863, et seq.; W.I. Anderson Co. v. Am. Mut. Liability Ins. Co. of Boston, 188 S.E. 642, 211 N.C. 23; St. Paul Mercury Ind. Co. of St. Paul v. Long, 85 F.2d 848.
A co-operation clause in a liability insurance policy requires that there shall be a fair, frank, and substantially full disclosure of information reasonably demanded by the insurer to enable it to prepare for, or to determine whether there is, a genuine defense.
29 A.M. Jur. 600, sec. 790; 72 A.L.R. 1456, 1477, 1478; 98 A.L.R. 1470, 1478; 36 C.J. 1101, sec. 80; Travelers Ins. Co. v. Myers et al., 62 Ohio St. 529, 57 N.E. 458, 49 L.R.A. 760; Universal Automobile Ins. Co. v. Culbertson, 86 S.W.2d 727, affirming 54 S.W.2d 1061, Reh. Den., 87 S.W.2d 475; U.S.F. G. Co. v. Wyer (Okla.), 60 F.2d 856; Shafer v. Utica Mut. Ins. Co., 289 N.Y.S. 577, 248 App. Div. 279; Buckner v. Buckner (Wis.), 241 N.W. 342; Schoenfield v. N.J. Fid. Plate Glass Ins. Co., 203 App. Div. 796, 197 N.Y. Supp. 607; U.S.F. G. Co. v. Williams, 129 A. 660; Coleman v. New Amsterdam Cas. Co., 247 N.Y. 271, 160 N.E. 367, 72 A.L.R. 1443; Word v. Md. Cas. Co., 71 N.H. 262, 51 A. 900; Francis v. London Guaranty Acc. Co., 100 Vt. 425, 138 A. 750; Moran Bros. Co. v. Pac. Coast Co., 48 Wn. 592, 94 P. 106; Met. Cas. Ins. Co. of N.Y. v. Blue, 219 Ala. 371, 121 So. 25; Rohlf v. Great Am. M. Ind. Co., 27 Ohio App. 208, 161 N.E. 232; Traveler's Ind. Co. v. Holiman, 164 So. 36, 174 Miss. 220; State Mutual, etc., Ins. Co. v. Watkins, 181 Miss. 859, 180 So. 78; U.S.F. G. Co. v. Myer, 60 F.2d 856.
Under the representations, warranties and declaration, if the insured did not own a bus of the description of the one described in the policy of insured and contended to be the one to have been involved in the accident, there is no liability on the part of appellant, and the court erred in granting the peremptory instruction to the jury to find for the plaintiff.
Bess et al. v. Commonwealth Cas. Co. (N.J.), 128 A. 250; Coffin v. Northwestern Mutual Fire Ins. Ass., 43 Idaho 1, 249 P. 89, 48 A.L.R. 1225; Melcher v. Ins. Co. of Penn., 97 Me. 512, 55 A. 411; Farmers Merchants Ins. Co. v. Jensen, 56 Neb. 284, 44 L.R.A. 861, 76 N.W. 577.
The court erred in admitting in evidence a certified copy of a telegram from Commercial Casualty Insurance Company to Mississippi Railroad Commission dated January 4, 1938 and overruling the objection of the garnishee thereto, as the contest and answer of the plaintiff and Exhibit "A" thereto show that said telegram was superseded by the insurance policy.
22 C.J. page 1098, sec. 1459 and page 1112, sec. 1471; Herndon v. Henderson, 41 Miss. 584; Kerr v. Kuykendall, 44 Miss. 137; McInnis v. Manning, 131 Miss. 119, 95 So. 250; Red Snapper Sauce Co. v. Bolling, 50 So. 401, 95 Miss. 752; Goff v. Jacobs, 145 So. 728, 164 Miss. 817; Germania Life Ins. Co. v. Bouldin, 100 Miss. 660, 56 So. 609; Shivers v. Farmers' Mut. F. Ins. Co., 99 Miss. 744, 55 So. 965.
Hall Hall, of Columbia, and G.M. Milloy, of Prentiss, for appellee.
If under a policy the injured third party has no direct right of action against the insurance company, then the policy is an indemnity against loss because it indemnifies the insured only against a loss actually sustained and not against a liability incurred but not yet paid by him, but if the policy indemnifies the insured against liability and if the injured third party under the terms of the policy has the right to proceed directly against the insurance company, then the policy is considered an indemnity against liability and he may reach the insurance company by garnishment proceedings.
4 Am. Jur. 749-752, Secs. 312-315.
The policy was one of indemnity against liability and not one of indemnity against loss only, and a garnishment proceeding against the insurance company was the appellee's proper remedy.
4 Am. Jur. 749-752; Elliott v. Aetna Life Ins. Co. (Neb.), 161 N.W. 679 L.R.A. 1917C, 1061; Maryland Cas. Co. v. Peppard (Okla.), 157 P. 106, L.R.A. 1916E, 597; Travelers Ins. Co. v. Inman, 157 Miss. 810, 126 So. 399; Employers Liability Assur. Corp. v. Bodron, 65 F.2d 539.
That there was an error in the description of the property cannot be doubted, but such an error would not vitiate the policy if there is enough of description left in the policy to identify the property after discarding that part of the description which is incorrect.
Shivers v. Farmers Mutual Fire Ins. Co., 99 Miss. 744, 55 So. 965; Wyman v. Security Ins. Co. of Calif., 262 P. 329; White v. Home Mut. Ins. Assn., 189 Iowa 1051, 179 N.W. 315; Caldwell v. City of New York Ins. Co. (Mo.), 245 S.W. 602; Tomato Products Co. v. Manufacturers' Liability Ins. Co. of N.J., 203 App. Div. 678, 197 N.Y.S. 497; Douglas v. Ins. Co. of N.A., 215 Mich. 529, 184 N.W. 539; Moore v. North River Ins. Co., 111 Kan. 420, 207 P. 760; Giles v. Citizens' Ins. Co. of Mo., 32 Ga. App. 207, 122 S.E. 890.
Randall did not give the company the motor number shown in the policy. He merely applied and paid for insurance. He did not even receive or see a policy, but the company filed it with the Railroad Commission. The company's representatives had access to the bus at all times and regularly inspected it. The company was not interested in the motor number until a loss occurred. Then the motor number became very material in properly identifying the property, though it had never been material before then. When the company's agents wanted to identify the bus for inspection purposes, they merely looked for Randall's 19-passenger Chevrolet bus, which was a sufficient description for them, but after a loss occurred they couldn't identify it except by motor number. Such a position is wholly untenable.
White v. Home Mutual Ins. Assn. of Iowa, 179 N.W. 315.
Where there is no dispute as to the facts, the case becomes a question of law for the court because there is nothing for the jury to pass upon. In this case it is undisputed that the bus mentioned in the policy was the only 19-passenger Chevrolet bus that Randall ever owned and was the one which inflicted the injury complained of. If there had been some proof that he did not own such a bus, or that he had fraudulently concealed the correct number from the insurance company, then there might have been some question for the jury to pass upon.
Moore v. North River Ins. Co. (Kan.), 207 P. 760; Continental Ins. Co. v. Burns (Md.), 125 A. 232; Lorenz v. Bull Dog Automobile Ins. Assn. (Mo.), 277 S.W. 596; Whitcomb v. Automobile Ins. Co. of Hartford (Minn.), 209 N.W. 27; Douglas v. Ins. Co. of N.A. (Mich.), 184 N.W. 539; Sec. 7124, Code of 1930.
Under the terms of the policy itself the failure of Randall to co-operate with the company in defense of Skinner's original suit cannot be raised as a defense in this proceeding by Skinner against the insurance company, and, under the undisputed facts, Randall gave the insurance company every vestige of co-operation and assistance which the company desired.
29 Am. Jur. 177; Employers Liability Assur. Corp. v. Bodron, 65 F.2d 539; Employer Liability Assurance Corp. v. Nosser, 70 F.2d 516.
Appellant lastly contends that the trial court erred in admitting in evidence the telegram to the Commission and cites nine cases on the proposition that parol evidence of events and negotiations had prior to issuance of a policy are not admissible to vary the terms of the policy. We offered no parol evidence in this case. We offered a written telegram which in itself constitutes a complete, valid, and binding contract of insurance on the part of appellant. By this telegram the appellant obligated itself and then and there insured J.B. Randall against bodily injury and property damage liability "conforming with requirements your Commission." The insurance company knew what the requirements of the Commission were and obligated itself by written telegram to insure Randall in conformity with those requirements. The telegram therefore was competent and material for the purpose of reading into the contract the insurance company's agreement to insure any substituted motor vehicle, and the trial court committed no error in admitting it.
32 C.J., pages 1099-1101, pages 1117-1118, sec. 215, page 1122, sec. 222, page 1162, sec. 274; Robinson v. U.S. Benevolent Society, 132 Mich. 695, 94 N.W. 211, 102 A.S.R. 436; McMaster v. N Y Life Ins. Co., 183 U.S. 25, 22 S.Ct. 10, 46 L.Ed. 64.
Argued orally by Forrest B. Jackson, for appellant, and by Lee D. Hall, for appellee.
May 6, 1939, Skinner recovered a judgment for $1,500 in the circuit court of Marion County against one Randall for personal injuries sustained in a collision between his automobile and a passenger bus owned and operated by Randall.
That judgment was affirmed on appeal to this court. See Randall v. Skinner, 187 Miss. 602, 192 So. 341.
The judgment was not paid and Skinner had a writ of garnishment issued thereon against appellant as the insurer of Randall as a common carrier.
After extensive pleadings, not necessary here to consider, and upon hearing and proof, the court below instructed the jury peremptorily to find for the plaintiff, which was accordingly done, and judgment was thereupon entered for Skinner against the appellant for the amount of the original judgment, interest, cost, etc. From that judgment this appeal is prosecuted.
Appellant contends that its liability extended only to losses or damage actually sustained by the insured, and, since assured has suffered no loss or damage, the company even defending the original action, there is no liability. The case was tried below and is presented here on that theory. Both counsel admit that if the liability of the Insurance Company is only against loss actually sustained by Randall, the garnishment will not lie, and, conversely, if the obligation of the Insurance Company is more than that and amounts to insurance against liability, then the garnishment will lie. Both of these propositions are amply sustained by the authorities. The general rule is stated in 4 American Juris. p. 750, paragraph 314, as follows: "If a policy is treated as a contract of indemnity against liability, as distinguished from indemnity against loss actually sustained, the insurer is subject to garnishment by an injured person who has recovered judgment on a claim which is within the protection of the policy."
In the case of Employers' Liability Assurance Corporation v. Bodron, 5 Cir., 65 F.2d 539, 540, a case originating in Mississippi, Judge Bryan, speaking for the court, announced the rule as follows: "The policy was not one which provided for indemnity in case of loss. As the assured became liable by reason of the judgment against him, so did the insurer. If the policy be one of indemnity against liability as distinguished from indemnity against loss, the insurer is subject to garnishment by an injured person who has recovered judgment on a claim which is within the protection of the policy. 5 Couch on Insurance 4186; 28 C.J. 166."
Many other authorities could be, but are not, cited because there appears to be no material disagreement in the cases on these propositions. Randall, as the operator of a public bus, was required to furnish "public liability or indemnity insurance" under Section 7124 of the Code of 1930, "covering injuries and damages accruing to persons or property, arising out of its operations as such transportation company."
On his behalf appellant, under date January 4, 1938, sent a telegram to the Mississippi Railroad Commission, reading as follows: "Please Accept This Telegram As Binding Bodily Injury And Property Damage Liability Insurance Coverages Conforming With Requirements Your Commission for J.B. Randall DBA Varnado Bus Line Effective January First. Policy To Be Filed Shortly. Please Wire Confirmation. Commercial Casualty Ins. Co."
Following this telegram appellant, on February 9, 1938, issued the present policy, which is dated January 1, 1938, for a period of one year, containing these provisions:
"Commercial Casualty Insurance Company — (A Stock Insurance Company Herein Called the Company) — Agreements — does hereby agree to indemnify the Insured, named in the Declarations made a part hereof and herein called the Insured, in consideration of the premium herein provided and of the statements contained in the Declarations and subject to the limits of liability, exclusions, conditions and other terms of this policy, against loss from the liability imposed by law upon the Insured arising from claims against the Insured for damages caused by accident growing out of the ownership, maintenance or use of any of the automobiles enumerated and described in Item 4 of the Declarations only while owned, maintained, used and operated for the purposes stated and subject to the limitations in Items 1 and 5 of said Declarations . . ."
"The Company shall not be liable to pay any loss nor shall any action be brought against the Company until final judgment shall be recovered against the Insured in the court of last resort.
"The insolvency or bankruptcy of the Insured shall not release the Company for any payment for which it would be liable under this policy, and if such insolvency or bankruptcy shall occur and execution on a judgment recovered in a suit against the Insured 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 Insured would have had to recover against the Company had the Insured paid the said judgment; but in no event shall the liability of the Company exceed the limits expressed in this policy. In no event shall any action be maintained against the Company under this policy unless brought within one year after Right of Action accrues; provided, however, that the minimum time set by the statutes of the state in which the Insured resides shall govern.
"The Company does not prejudice by this condition any defenses against such action that it may be entitled to make under this policy."
". . . In consideration of the premium stated in the policy to which this endorsement is attached the insurer hereby insures the motor vehicles described in the policy and agrees to pay within the limits of the policy or any endorsement attached thereto any final judgment for personal injuries including death resulting therefrom (suffered by any persons other than the insured or his employees) and/or damages to property (including loss of, or damages to property of passengers, after receipt thereof by the motor transportation company and while carried on the motor vehicle), but excluding the property of the Insured or property (usually designated as `cargo') loaded for shipment or in transit, caused by the negligent operation of said motor vehicle operated by the insured pursuant to a certificate of public convenience and necessity issued in accordance with said Mississippi Motor Carrier Act of 1926, and further agrees that upon its failure to pay any such final judgment such judgment creditor may maintain an action in any court of competent jurisdiction to compel such payment."
". . . No condition, provision, stipulation or limitation, contained in the policy or any other endorsement thereon, nor the violation of any of the same by the insured shall affect in any way the right of any person injured in person or property by the negligence of the insured or relieve the insurer from the liability provided for in this endorsement, or from the payment to such person of any such judgment, to the extent and in the amounts set forth in the policy."
The last two provisions appear to have been endorsements to the regular policies to comply with the Mississippi Motor Carrier Act then in force.
A mere reading of the foregoing provisions demonstrates so clearly, we think, that this policy is more than indemnity against actual loss, it is not necessary for us to dwell upon or try to amplify them. 4 Am. Jur. 749-752; Elliott v. Aetna Life Ins. Co., 100 Neb. 833, 161 N.W. 579, L.R.A. 1917C, 1061; Maryland Casualty Co. v. Peppard, 53 Okla. 515, 157 P. 106, L.R.A. 1916E, 597; Travelers' Ins. Co. v. Inman, 157 Miss. 810, 126 So. 399, 128 So. 877; Employers Lia. Assur. Corp. v. Bodron, 5 Cir., 65 F.2d 539.
We might add that the very object and purpose of requiring Randall to carry insurance was for the protection of the public and the applicable provisions of the statutes would be written into and become a part of the policy.
Appellant next contends that it is released from liability because the number of the motor in the bus was different from the number in the policy. The policy covered three buses and described them by names and kinds of vehicles, motor numbers, year built and seating capacity. The bus in question was a 19-passenger Chevrolet bus and was properly described except as to number of the motor. In October the previous year the old motor was replaced with a reconditioned motor. Appellant carried the insurance the previous year, the policy containing the number of the old motor. Randall failed to notify the company of the change of motors. The company took the descriptions of the buses from the old policy. Randall did not give them the numbers for this policy.
These were all the buses owned or operated by Randall. It is not disputed that the 19-passenger bus was the one which caused the injury and that this was the bus insured.
The motor number was only a part of the description. The motor number might be entirely disregarded and the remainder of the description was sufficient to identify the bus. Shivers v. Farmers' Mutual Fire Insurance Co., 99 Miss. 744, 55 So. 965.
In Wyman v. Security Insurance Co. of California, 202 Cal. 743, 262 P. 329, 330, the motor had been changed without knowledge of the insurance company, but the company was not relieved of liability, the court saying, "There was no question but that the truck destroyed by the fire was the truck which the defendant insured. The motor number given in the policy of insurance was merely for the purpose of identifying the truck, and as the truck could be and was positively identified without resort to this number, this portion of the description became immaterial." See, also, Tomato Products Co., Inc., v. Manufacturers' Liability Ins. Co., 203 App. Div. 678, 197 N.Y.S. 497; Caldwell v. City of New York Ins. Co. (Mo. App.), 245 S.W. 602; White v. Home Mutual Ins. Ass'n of Iowa, 189 Iowa, 1051, 179 N.W. 315.
Again, under the terms of the policy the insurance company had the right to inspect these buses "whenever it so desired," and it did inspect them regularly.
The risk to the company was not increased by this change. The new motor naturally lessened the insurance risk.
In addition to the foregoing, Randall was required to carry insurance satisfactory to, and which complied with the regulations of, the Railroad Commission, and the company had telegraphed the Commission that its policy would meet the "requirements of your commission." The Commission had on its minutes the requirement that all insurance should carry this endorsement: "In consideration of the premium stated in the policy to which this endorsement is attached, the insurer hereby insures the motor vehicles described in the policy and any motor vehicle substituted therefor, but not additional motor vehicles . . ."
It might also be added that the policy was not sent to Randall but to the Railroad Commission and the policy itself was received only three days before the accident, allowing little time for its examination, if there was any duty to examine it.
The contention is not well taken.
Appellant says it is not liable because of lack of co-operation by Randall. It is very doubtful, even if these were the facts, that the company is relieved of liability to third persons under the terms of this policy, but a careful examination of the record does not disclose any lack of required co-operation by Randall.
Appellant next contends that Randall did not own the bus at the time of the accident. We think the testimony clearly shows he did own it at that time. In addition, the policy covered liability growing out of the "ownership, maintenance or use" of the bus. No one questions the fact that this bus was being used by Randall when the accident happened. This fact was also determined and concluded in the original trial.
Appellant assigns as error the admission in evidence of the telegram to the Commission. The objection is the telegram was superseded by the policy. The telegram was a connecting, fundamental basis of liability of appellant.
We find no error in this record, and the judgment is affirmed.
Affirmed.