Summary
applying § 8169, R.C.M., now §§ 28-11-316 and -317, MCA
Summary of this case from Draggin' Y Cattle Co. v. Junkermier, Clark, Campanella, Stevens, P.C.Opinion
No. 5,208
Submitted May 29, 1923
Decided June 30, 1923
Indemnity Insurance — Personal Injuries — Action Against Insured — Refusal of Insurer to Defend — Waiver — Liability of Insurer — Presumptions — Appeal and Error — Conflict in Evidence — Verdict Conclusive.
Indemnity Insurance — Refusal of Insurer to Defend Action Against Insured — Waiver.
1. Where an indemnity insurance company had agreed to indemnify plaintiff corporation against loss resulting from claims for personal injuries caused by the use of an autotruck by others than its employees, denied liability and refused to settle or defend an action against plaintiff as it had bound itself to do, it breached the contract and released the insured from its agreement not to settle the claim without written consent of the insurer and waived a clause in the policy under which actual trial of the issue was made a condition precedent to a recovery against it.
Same — Liability to Insured — Rebuttal of Statutory Presumption — Burden of Proof.
2. In an action on an indemnity policy of the nature of the above, the burden is upon the insurer to rebut the presumption provided for by section 8169, Revised Codes of 1921, that if after request the insurer neglects to defend the person indemnified, a recovery against the latter suffered by him in good faith is conclusive in his favor against the insurer.
Same — Liability of Insured to Person Injured may be Litigated in Action on Policy.
3. Where the insurer denies liability under an indemnity policy and refuses to defend an action by an injured person against the insured, the liability of the latter to such person and its extent may be litigated for the first time in an action on the policy between the insurance company and the insured.
Appeal — Conflict in Evidence — Verdict Conclusive.
4. A verdict and judgment supported by substantial evidence conflicting in character will not be disturbed on appeal.
Appeal from District Court, Silver Bow County; Wm. L. Carroll, Judge.
ACTION by the Independent Milk Cream Company against the Aetna Life Insurance Company. Judgment for plaintiff and defendant appeals. Affirmed. Messrs. Frank Gaines, for Appellant, submitted a brief; Mr. R. F. Gaines argued the cause orally.
The policy made the basis of this action, among others, contains the following clause: "Clause J. No action shall lie against the company to recover for any loss and/or expense covered by this policy arising or resulting from claims upon the assured for damages, unless it shall be brought by the assured for loss and/or expense actually sustained and paid in money by him after actual trial of the issue." It is the contention of appellant that the effect of the provision of the policy is that either where the facts disclosed by investigation or the nature of the claim as asserted leave it doubtful whether the instance is one covered by the policy, then the insured must observe the requirements of clause J; and that a denial of liability under such' circumstances does not amount to a waiver of the policy provisions. It likewise has been and now is the claim of appellant that when carefully considered, all cases which apparently sustain the contention of respondent, will show that their pronouncements, if justifiable, are so only because of the fact that in those cases, the claims made were clearly determined, either by their nature as a matter of law or by fact investigation, to be claims which were certainly covered by the policy. (See Brundy v. Canby, 50 Mont. 454, 148 Pac. 315; Sanders v. Frankfort Ins. Co., 72 N.H. 485, 101 Am. St. Rep. 688, 57 Atl. 655; White v. Casualty Co., 139 App. Div. 179, 123 N. Y. Supp. 840; Patterson v. Adan, 119 Minn. 308, 48 L.R.A. (n. s.) 184, 138 N. W. 281.)
Mr. W. D. Kyle and Mr. J. A. Poore, for Respondent, submitted a brief; Mr. Poore argued the cause orally.
It is our contention that when the appellant refused to defend the Ouimet suit and denied any liability under the contract by reason of the accident, it waived the provisions of the policy to the effect that the assured should not incur any expense, or settle any claim, except at his own expense, without the written consent of the appellant previously given, and that no action would lie against the appellant to recover for any loss or expense covered by the policy unless brought by the assured for loss or expense actually sustained and paid in money by the respondent after actual trial of the issue; and that after such refusal, the respondent was at liberty, acting prudently and in good faith, to make such settlement as might be fair and reasonable and considered for the best interests of both the assurer and assured, without waiving or forfeiting its right to indemnity under its contract with appellant. (See St. Louis Dressed Beef Provision Co. v. Maryland Casualty Co., 201 U. S. 173, 50 L. Ed. 712, 26 Sup. Ct. Rep. 400 [see, also, Rose's U. S. Notes]; Butler Bros. v. American Fidelity Co., 120 Minn. 157, 44 L.R.A. (n. s.) 609, 139 N. W. 355; Mayor Lane Co. v. Commercial Casualty Ins. Co., 169 App. Div. 772, 155 N. Y. Supp. 75; In re Empire State Surety Co., 214 N. Y. 553, 108 N. E. 825; South Knoxville Brick Co. v. Empire State Surety Co., 126 Tenn. 402, Ann. Cas. 1913E, 107, 150 S. W. 92; Fullerton v. United States Cas. Co., 184 Iowa, 219, 6 A. L. R. 367, 167 N. W. 700; Interstate Cas. Co. v. Wallins Creek Coal Co., 164 Ky. 778, L.R.A. 1915F, 958; 176 S. W. 217; Rieger v. London etc. Co., 202 Mo. App. 184, 215 S. W. 920-930; United States F. G. Co. v. Pressler (Tex.Civ.), 185 S. W. 326-329; Western Ind. Co. v. Walker-Smith Co. (Tex.Civ.) 203 S. W. 93-96.)