Rochester Mining Co. v. Maryland Casualty Co.

COX, J. The contention of appellant is that the provision in the policy that no action should lie against it until final judgment should be rendered by a court of last resort and that judgment paid by plaintiff is an absolute one, and this contingency not having occurred, plaintiff’s suit is prematurely brought. Plaintiff contends that the failure of defendant to furnish appeal bond and stay execution upon the judgment in the circuit court forced the plaintiff to pay [561] the judgment before the determination of the appeal and by that act defendant is estopped to insist upon the enforcement of that provision. This entire controversy rests upon one proposition, vis.: whose duty was it to furnish the appeal bond and stay execution on the Gibson judgment against plaintiff? This question must be determined by a construction of the poiicy and the acts of the parties. We do not find that this precise question has ever been passed upon, but there have been some adjudications construing similar policies that will aid materially in the solution of this question, thus: • The right given to defendant to defend the action for damages against plaintiff on account of the death of the employee gave to defendant the right to appeal from the judgment. [Stephens v. Casualty Co., 97 N. W. 686.] In this case the terms of this policy not only permit defendant to conduct the defense of Martha Gibson against this plaintiff but require it to do so, and this provision of the policy robbed this plaintiff of any right or power to direct the defense in any particular, and left it powerless to do anything to protect its own interests without the express consent of the insurance company. [Davidson v. Casualty Co. (Mass.), 83 N. E. 407.] If there should be any doubt as to the proper construction to be given the terms of this policy it is our duty to construe them most strongly against the insurance company, for these provisions were put in the policy for its protection and benefit, and the policy was prepared by its direction, and it alone is responsible for the language used therein. [Grocery Co. v. Fidelity and Guaranty Co., 130 Mo. App. 421, l. c. 428-429, 100 S. W. 29; Fenton v. Fidelity Co. (Ore.), 48 L. R. A. 770; Lumber Co. v. Fidelity Co. (Minn.), 65 N. W. 353; Hoven v. Assur. Corp. (Wis.), 67 N. W. 46; Light & [562] Electric Co. v. Fidelity Co. (Mich.), 69 N. W. 249; Amer. Surety Co. v. Pauly, 170 U. S. 130.] Looking to the terms of the policy alone, we think a proper construction thereof made it the duty of defendant, if not satisfied with the judgment in the circuit court, not only to appeal the case, but to protect this plaintiff from injury while the appeal was pending. We note that the provisions of the policy defining plaintiff’s duty in case of suit are “Whenever requested by the company, the assured shall aid in securing information and evidence and the attendance of witnesses and in effecting settlements, and in prosecuting appeals . . . the assured shall not voluntarily assume any liability; nor shall the assured without the written consent of the company previously given, incur any expense or settle any claim, except at its own cost, or interfere in any negotiations for settlement or any legal proceedings.” Under the plain terms of these provisions plaintiff was not required to do anything to assist defendant in prosecuting the appeal until it was requested by defendant to do so; nor was plaintiff permitted to assume any liability or interfere in any legal proceeding without first having the written consent of defendant. The evidence in this case shows that plaintiff did its duty, under these provsions, to the letter; and as giving an appeal bond was incurring a liability it is clear that plantiff could not do so without first having had the written consent of defendant and this consent was not furnished until it was too late for plaintiff to furnish the bond. The provision that no action should be maintained against the defendant until the judgment against the plaintiff hád been affirmed by a court of last resort and paid by plaintiff was for defendant’s protection, and was inserted in the policy to prevent plaintiff from settling the claim, or paying the judgment, with the expectation of holding defendant liable therefor, until a court of last resort, had passed upon the validity of [563] the claim and defendant had been assured thereby that the claim was one covered by the policy for which defendant would be liable to reimburse plaintiff. While this provision protects defendant in that way, the other provisions of the policy which required defendant to defend the suit, at its own cost, when considered in connection with this provision, also required defendant ' to shield the plaintiff from liability while the case was beng prosecuted through the court of last resort. It would be manifestly unjust to say that plaintiff could not recover for any sum paid unless paid as a result of a final judgment in a court of last resort, and at the same time, tie its hands and prevent it from protecting its own interests in the trial of the case. Defendant having taken the defense of the case out of the hands of plaintiff, and, after doing so, having refused to give the appeal bond, and thereby provide for a stay of execution on the judgment, and thus forcing plaintiff to pay the judgment of the circuit court, that judgment became to plaintiff the judgment of a court of last resort for it had no control of the appeal and could do nothing at that time except to pay the judgment against it and this it could not avoid doing. When we resolve all doubts that may arise in the construction of the terms of this policy in plaintiff’s favor and construe this policy most strongly against the insurance company as we are required to do we have no hesitancy in holding that it was the duty of defendant to have furnished the appeal bond, and having failed to do so, and by such failure, having forced plaintiff to pay the judgment, it has waived the right to require plaintiff to wait until the determination of the appeal, and must now be required to stand to its part of the agreement and reimburse the plaintiff. This plaintiff, when suit was brought against it by Martha Gibson, immediately turned over the defense of the suit to the insurance company as. it was required [564] to do, and committed to the care of the company the entire interests of plaintiff in that suit. Plaintiff did everything it was asked to do to assist the insurance company in that defense. After judgment, the attorney for the insurance company took control of the appeai and plaintiff did everything it was asked to do to assist in perfecting that appeal, and the attorney for the insurance company did not notify plaintiff that the insurance company would not make the appeal bond until it was too late for plaintiff to make it, and, under these facts, if we lay aside the terms of the policy and look only to the acts of the parties, the defendant should he held liable on the ground that by its own neglect it placed plaintiff in a position in which it was compelled to pay the judgment. [Manufacturing Co. v. Assur. Corp. (Iowa), 90 N. W. 616.] The case was well tried. Judgment is for the right party and will be affirmed. Nixon, P. J., concurs. Gray, J., having tried the case, nisi, not sitting.