Summary
recognizing and approving adoption of lower court's reasoning by Kuntz v. Spence , 67 S.W.2d 254, 256–57 (Tex. Comm'n App. 1934, holding approved)
Summary of this case from In re State Farm Mut. Auto. Ins. Co.Opinion
No. 6465.
Decided April 3, 1935.
1. — Misjoinder of Parties — Indemnity Insurance.
Under an insurance policy of indemnity containing a "no action clause" the insurance company is not liable until a judgment has been obtained against the policy holder, and it would constitute a misjoinder of parties for an injured third party to sue said company as a co-defendant in an action for damages against the policy holder. Kuntz v. Spence, 67 S.W.2d 254, approved.
2. — Motor Carriers.
A policy of indemnity insurance issued to a bus operator under section 11, Article 911a (2 Vernon's Anno. Civ. Stat.), inures to the benefit of an injured third party only after he has secured a final judgment against the insured. Monzingo v. Jones, 34 S.W.2d 662, distinguished. Grasso v. Cannon Ball Motor Freight Lines, 125 Tex. 154, 81 S.W.2d 482, followed.
Error to the Court of Civil Appeals for the Seventh District, in an appeal from Howard County.
Suit by Le Roy Moxon, by his father as next friend, L. Moxon, against E. E. Ray and his surety, the Commercial Standard Insurance Company, to recover damages for personal injuries received in a collision between the plaintiff Le Roy Moxon, who was driving a motorcycle, and E. E. Ray, who was operating an automobile. Commercial Standard Insurance Company was joined as party defendant because of its having issued a policy of insurance which it was alleged guaranteed the payment of any judgment rendered against the insured Ray. Defendants filed pleas in abatement challenging the right of plaintiff to join said insurance company in a suit again defendant Ray. The trial court overruled the pleas in abatement and a judgment was rendered against said defendants Ray and the insurance company for $6,000.00. This judgment was reversed and remanded by the Court of Civil Appeals ( 56 S.W.2d 469) and Moxon brings error to the Supreme Court.
The case was referred to the Commission of Appeals, Section A, for their opinion thereon and the Supreme Court adopted same and ordered judgment entered in accordance therewith.
Judgment of Court of Civil Appeals is affirmed.
Thomas McDonald, of Big Springs, for plaintiffs in error.
Where the provisions of an insurance policy provides for the payment of any and all judgments rendered against the insured together with the provision wherein the company contracts to defend all suits on behalf of the assured, is a liability policy and the provisions with reference to "no action should lie against said company" will not prevent the maintenance of a suit against the assured and the insurance company in the same instance. Pickens v. Seaton, 51 S.W.2d 1050; American Ind. Co. v. Martin, 54 S.W.2d 543.
Touchstone, Wight, Gormley Price, of Dallas, for defendants in error.
The insurance policy being purely an indemnity policy, the insurance company could not be properly joined in a suit for damages against the policy holder who was only indemnified against loss or expense resulting for claims upon the insured for damages by reason of the ownership of the automobile. Tarbutton v. Ambriz, 259 S.W. 259; Lange v. Lawrence, 259 S.W. 261; American Automobile Ins. Co. v. Cone, 257 S.W. 961.
C. A. Leddy, Fullbright, Crooker Freeman, of Houston, filed argument as amicus curiae.
1 The opinion of the Court of Civil Appeals in this case is reported in 56 S.W.2d 469. In the case of Kuntz v. Spence, 67 S.W.2d 254, this Section of the Commission adopted Judge Martin's opinion in the instant case. The opinion in the Kuntz case, supra, settles the issue of misjoinder in this case in accordance with the views expressed by Judge Martin's opinion. No good can be accomplished by further discussion here.
It will be noted that the opinion of the Court of Civil Appeals in the instant case contains the following statement:
"The Monzingo v. Jones case, supra, construes a policy required by law to be taken out by motorbus operators and by statute is required to be so written as to give the injured party an affirmative right of action thereon."
2 Monzingo v. Jones (Civ. App.), 34 S.W.2d 662, holds that an insurance company which has issued an insurance policy to a bus operator under the provisions of Section 11 of Article 911a, Vernon's Annotated Civil Statutes of Texas, 1925, Vol. 2, can be sued on such policy in a damage suit for negligence against the insured. We do not construe the above-quoted portion of the opinion of the Court of Civil Appeals in the instant case as upholding that ruling. Volker Grasso v. Cannon Ball Motor Freight Lines et al, No. 6671, this day decided by this Section of the Commission, 125 Tex. 154, 81, S.W.2d 482. It is true that a policy written under the provisions of Section 11, supra, inures to the benefit of an injured third party, but his right of action thereon does not arise or accrue until he has obtained a final judgment against the insured. See Grasso v. Cannon Ball Motor Freight Lines, et al, supra, for a full discussion of this question.
The judgment of the Court of Civil Appeals, which reversed the judgment of the district court, is affirmed.
Opinion adopted by Supreme Court April 3, 1935.