United States Fidelity & Guaranty Co. v. Williams

Digges, J., delivered the opinion of the Court. On the 25th day of March, 1922, the appellant, United States Fidelity and Guaranty Company, is'sued a policy of insurance to Hugh R. Price. The amount stated in the policy was the sum of $5,000, and the term of the policy was from noon on the 25th day of March, 1922, to noon on the 25th day of March, 1923. The policy is set out in full in the record and the portions- thereof which are necessary to be considered for determination of the questions involved in this case are as follows: “United States Fidelity and Guaranty Company, Baltimore, Maryland (hereinafter called the company), in consideration of the premium and the declarations set forth in the schedule of statements hereto and subject to the terms, limits and conditions set forth herein, does hereby insure the assured named and described as such in the schedule of statements hereto, ²⁹² against loss and/or expense, arising or resulting from claims upon the assured for damages in consequence of an accident occurring within the limits of the United States and Canada during the term of this policy, by reason of the ownership, maintenance or use (including the carrying of goods thereon and the loading and unloading thereof when commercially used) of the automobile or any of the automobiles enumerated and described herein resulting in “(A) Bodily injuries or death resulting at any time therefrom, suffered by any person or persons other than any employee or employees of the assured while engaged in the care, operation or maintenance of any of the assured’s automobiles. “In addition to the above, the company does hereby agree “(1) To defend in the name and on behalf of the assured any suit brought against the assured to enforce a claim, whether groundless or not, on account of damages suffered or alleged to be suffered under the circumstances hereinbefore described; “(2) To pay the expenses incurred in defending any suit described in the preceding paragraph, also the interest on any judgment within the limits of the insurance hereby granted and any costs taxed against the assured on account thereof; # # ❖ ❖ “Insolvency Provision. “(5) The insolvency or bankruptcy of the assured hereunder shall not release the company from the payment of damages for injuries sustained or loss occasioned during the life of this policy, and in case execution against the assured is returned unsatisfied in an action brought by the injured, or his or' her personal representatives in case death results from the accident, because of such insolvency or bankruptcy, then an action may be maintained by the injured person or his or her personal representative against the company under the terms of the policy ²⁹³ for the amount of the judgment in said action, not exceeding the amount of the policy. “Paragraph B.- “2.

Uo action by the assured shall lie against the company until the amount of the damages for which the assured is liable by reason of any casualty covered by this policy is determined, either by a final judgment against tbe assured or by agreement between the assured and the plaintiff with the written consent of the company; nor unless such action is brought within two years after the rendition of such final judgment. Hs ij: ❖ “4. The assured shall not voluntarily assume any liability; nor interfere in any negotiations or legal proceedings conducted by tbe company on account of any claim; nor, except at assured’s own cost, settle any claim; nor, without the written consent of the company previously given, incur any expense, except as provided herein for immediate surgical relief at time of accident. “5. Whenever requested by the company, the assured shall aid in securing information, evidence and the attendance of witnesses in effecting settlements and in defending suits hereinbefore referred to.

The assured shall at all times render to the company all reasonable co-operation and assistance.” The assured named in the policy was Hugh R. Price, and the automobile mentioned in the schedule was a Ford sedan. On May 19th, 1922, the Ford sedan mentioned in the schedule, while being driven by Hugh R. Price, the other occupants thereof being the wife of Hugh R. Price, his aunt, Lillie L. Williams, and her husband, Edward A. Williams, was in collision with a car of the United Railways and Electric Company on Forth Avenue, in the City of Baltimore. By reason of the collision Lillie L. Williams was injured, and thereafter brought suit in the Court of Common Pleas of Baltimore City against the United Railways and Electric ²⁹⁴ Company and Hugh R. P'rice for damages resulting'from the injuries received at the time of the collision. This suit was tried before a jury and resulted in a verdict and judgment in favor of the defendant United Railways and Electric Company .and against the defendant Hugh R. P'rice for the sum of $5,000, with interest from October 13th, 1923, the date upon which the judgment was made absolute, and costs.

At the time of the institution of this suit Hugh R. Price notified the • appellant of its institution, and the appellant’s counsel defended the suit on behalf of Price. After the timé for appeal from this judgment had elapsed the plaintiff in that suit, Lillie L. Williams, sued out an attach-. ment in the Court of 'Common Pleas on the judgment thus obtained, and the return of the sheriff on said attachment was: “Laid in the hands of the Robinson Oil Co., a corporation, by service on Edward G. Cole, secretary, on the 13th day of December, 1923, at 4.35 o’clock P. M., in presence of Maurice L. Yaffe and garnishee summoned. Also laid in the hands of the United States Fidelity and Guaranty Company, a corporation, by service on Joseph W. Bristor, assistant to president, on the 12th day of December, 1923, at 4.50 o’clock P. M., in presence of Maurice L. Yaffe and garnishee summoned. Also a copy of the writ of attachment, the process in the within cause, left with tach garnishee. — John E. Potee, Sheriff.” Ota.

January 11th, 1924, interrogatories on behalf of Lillie L. William's, directed to the United States Fidelity and Guaranty Company, were duly filed and served upon the appellant. The plea of the appellant, the garnishee, filed January 19th, 1924, was “nulla bona/1 and thereafter the appellant answered the interrogatories, the answer to all of the interrogatories being “Ho,” except the fourth, which was: “In answer to the fourth interrogatory the defendant states that it issued on March 25, 1922, policy of liability and property damage insurance to Hugh ²⁹⁵ B. Price for a period of one year, which policy expired March 25th, 1923, and that said policy has never been in tbe possession of the U. S. Fidelity & Guaranty Company since it was delivered to the said Hugh E. Price on or about March 25th, 1922, and that it presumes that said policy is still in possession of the said Hugh E. Price, although it has no definite knowledge to this effect.” Issue was joined, and the case upon these pleadings was tried before a jury on tbe 25th and 26th days of February, 1924, resulting in a verdict in favor of tbe appellee for $5,164.30, upon which verdict a judgment for that amount was entered on the -2'8th day of February, 1924, with interest from the 26th day of February, 1924, and costs of suit. From tbe above judgment, on the 13th day of March, 1924, the appellant appealed. Oil ihe 15th day of May, 19'24, the plaintiff below, ap^ pellee here, filed her petition in the lower court praying that that honorable court refuse to sign tbe bills of exception on behalf of tbe defendant for the reason that said defendant is in default of the provisions of the Act of 1916, chapter 625, of the Laws of Maryland.

The appellant, on the 16th day of May, 1924, answered said petition, setting forth its action in respect to the bills of exception and stating therein: “That the case was one where the jury were instructed by the court to render verdict for the plaintiff, and the question of law involved in the appeal is one of considerable importance; that your petitioners feel that the rights of the plaintiff have in no way been prejudiced by the fact that said hills of exception were not served on the plaintiff’s counsel on the 12th day of May, instead of the 15th day of May, and that a grave injustice will he done the defendant, unless said bills of exception are signed by your honor.” The bills of exception were filed and signed by the court on the 16th day of May, 1924. The appellee, on the 17th ²⁹⁶ day of May, filed special exceptions to the action of the lower court in signing" the bills of exception, as follows: “Lillie L. 'Williams, by W. W. Parker, her attorney, represents unto this honorable court, that she has just been apprised of the action of this honorable court in signing the bills of exception filed by the defendant in the above entitled ease, which was done by this honorable court on the 16th day of May, 1924, over the protest of this plaintiff contained in her petition filed on the 15th day of May, 1924, and this plantiff herewith respectfully excepts to the action of this honorable court in signing said bills of exceptions and asserts in support of this special exception to the action of this honorable court the provisions of the Act of 1916, chapter 625 of the Laws of Maryland, concerning the provisions of which act said defendant was in default before and on the day of the signing of said bills of exceptions.” It will thus be seen that 'the preliminary question to be determined is the validity of the special exceptions of the appellee, for the reason that if these exceptions are valid the appeal in this ease should be dismissed. The Act of 1916, chapter 625, in reference to bills of exception upon appeal from any of the courts of Baltimore City provides: “Bills of exception may be signed in any cause pending in any of said courts at any time within the period that the parties, or any of them, shall have the right to file an appeal from the rendition of the verdict by the jury or the findings of the court upon the issue of fact in said cause, and upon filing the order for such an appeal, the time for signing said bills of exceptions shall thereby be further extended until ten days before the period within which it is required that the record shall be transmitted to the Court of Appeals; provided that the party appealing, or his counsel, shall submit the bills of exceptions to the appellee, or his counsel, not less than thirty days prior to the timé that the record must be filed in the Court of ²⁹⁷ Appeals, for the purposes of amendments or additions to the said hills of exceptions.'” Tho appeal in this ease was taken on the 13th day of March, 1924, and the law required that the record should he transmitted to the Court of Appeals on or before Tune 13th, 1924. The act provides that the party appealing: shall submit the bills of exception to the appellee or his counsel not less than thirty days prior to- the time that the record must be filed in the Court of Appeals, which in this ease would have been not later than May 13, 1924.

As a matter of fact, the exceptions were presented to counsel for the appellee on May 15, 1924, after the time prescribed by the statute. The latest date that the court could sign the bills of exception, in accordance with the provisions of the statute, was ten days prior to Tune 13th, or June 3rd, 1924. The exceptions were actually signed by the court on May 16th, 1924, well within the period prescribed by the statute, and there is no evidence contained in the record that damage or injury resulted to the appellee by reason of the failure of counsel for the appellant to submit the bills of exception to- counsel for appellee within the time prescribed. The appellee’s counsel, in argument and in their brief, contend that for the reasons stated the appeal should be dismissed.

If this was the first case presenting this question we might he called upon to express our views at some length in respect thereto, but the identical question was presented and passed upon by us in the recent case of Middendorf Co. v. Milburn, 137 Md. 583 , and is no longer a question for judicial determination in this State. In that case this Court, speaking through Judge Adkins, said: “The submission of the bills of exception to attorneys for appellee wits not within the time provided by the- statute, hut, nevertheless, -they were ■signed by the court before the expiration of the time limited by the statute, and it does not appear that the appellee has suffered any injury thereby. Under the authority of Wegefarth v. Wiessner, 132 Md. 395 , the motion to dismiss is -overruled.” ²⁹⁸ We come now to a consideration of the real questions involved in the appeal, and which are raised by the action of the lower court in granting the prayer of the plaintiff, giving certain verbal instructions to the jury, .and refusing the prayer of the defendant, and its ruling upon the testimony presented at the trial. The exception taken by the appellant to the granting of the plaintiff’s prayer, giving verbal instructions to the jury, and rejecting the prayer of the defendant, constitutes the twelfth bill of exception, and will be first considered.

The plaintiff’s prayer was as follows: “The court instructs the jury that if they shall find from the evidence in this case that the United States Fidelity and Guaranty Company, the defendant, signed and delivered to a certain Hugh E. Price a policy of insurance dated March 25th, 1922, offered in evidence in this case, and if the said Hugh E. Price was named as the assured in said policy; and if the jury shall further' find that said Hugh E. Price was driving the automobile described in said policy of insurance on 'the 19th day of May, 1922, in which the plaintiff in this cáse was .a passenger, and that on said last named’ date the plaintiff in this case was injured while a passenger in said automobile, and that the said plaintiff sued said Hugh E. Price for said injuries and recovered a judgment in the Court of Common Pleas of Baltimore City against said Hugh E. Price in the sum of five thousand dollars for said injuries, and that said judgment has not been paid -or discharged by said Hugh E. Price or by the United States Fidelity -and Guaranty Company, the defendant in this case, then the verdict of the jury must be for the plaintiff in this ease in the sum of five thousand dollars, with interest from the 13th day of October, 1923, and with the costs of the suit in which said judgment was recovered.” That of the defendant being: “The defendant prays the court to instruct the jury that under the evidence in this case the plaintiff can only recover the court costs in the ease in the Court of Common Pleas of Williams v. United Railways Company and Hugh R. Price, amounting to $54.30 and interest at the ²⁹⁹ rate of six per cent, per annum on the judgment of $5,000 in said case, from October 13th, 1923, to date.” In, granting the plaintiff’s first prayer the court made the following statement to the jury: “Gentlemen of the jury, the plaintiff asks me to instruct you as follows”: (Then read the plaintiff’s prayer). “In ether words, gentlemen, over the Objection of the defendant, I have to hold that the United States Fidelity and Guaranty 'Company is. bound to protect 'the assured, Hugh E. Price, by answering for the damages recovered by tbe plaintiff in that suit.” The effect of this action of the court was to direct a verdict for the plaintiff. The correctness of the court’s ruling upon these prayers must be determined by a construction of the terms of the policy of insurance, forming the contract between tbe appellant and Hugh E. Price, the assured. If this policy was a contract of indemnity against loss, the appellant had no credits in its hands belonging to Hugh E. Price until he had suffered loss by the payment of the judgment obtained against him by this appellee. On the other hand, if the policy was a contract to indemnify against liability, from and after the time the liability of Price to the appellee was fixed and determined by a, judgment in her favor, the. appellant did owe Price the amount of that, judgment to the extent of the sum fixed in the policy, and the amount so due .and owing to Price was subject to attachment on tbe judgment obtained by the appellee.

This is the law as determined by the weight of authority, and has been expressly so declared by this Court in London and Lancashire Indemnity Co. v. Cosgriff, 144 Md. 660 , in which the opinion was delivered by tbe former Chief Judge. That case, like the present one, was an attachment case, and it will be well to remember, as pointed out by Judge Boyd, quoting from Hodge & McLane on Attachment, section 148, that the general rule is that the right of the attaching creditor to recover against the garnishee de^ pends upon the subsisting right between the garnishee and the debtor in the attachment, and the test of the garnishee’s liability is that he has funds, property or credits in his hands ³⁰⁰ belonging to the debtor for which the latter would have the right to sue; the plaintiff is subrogated, as against the garnishee, to the rights of the debtor, and can recover only by the same right and to the same extent as the debtor might recover if he were suing the garnishee. In other words, the appellee’s right to recover under the attachment in this case depends upon and is controlled by the question of whether or not her judgment debtor, Price, could successfully maintain a suit against the appellant. If Price could compel payment under the contract to him, the appellee can recover; but if the appellant, under the terms of the contract, has such a defense as would preclude recovery by Price, them and in that event there can he no recovery by the appellee.

The contention of the appellant is that Price could not recover at all: (1) That he could not recover the amount of the judgment because by the terms of the policy the contract was one to indemnify Price against loss, and that it is necessary for him to show that he has paid .the judgment recovered against him before the appellant could he required to indemnify him; (2) that Price could not recover the costs of suit and interest on the judgment recovered against him, because under clause 5 Price was required at all times to render to the company all reasonable co-operation and assistance; that he had failed to'do this, and being the party to first break the contract, the appellant was thereby legally relieved from further complying with its terms. Under the authority of the Cosgriff case; suprathe first contention of the appellant must be admitted to be sound, if there is no difference in the meaning of the contract in that case and the one now under