Eberlein v. Fidelity & Deposit Co.

164 Wis. 242 | Wis. | 1916

Lead Opinion

The following opinion was filed October 3, 1916:

WiNsnow, O. J.

The claim of Castonguay was purely a tort claim, unliquidated, not reduced to judgment until after the adjudication in bankruptcy, and hence not a debt provable in the bankruptcy proceedings. In re Crescent L. Co. 154 Fed. 724; Dunbar v. Dunbar, 190 U. S. 340, 350, 23 Sup. Ct. 757. It follows, necessarily, that the title to the insurance policy did not pass to the trustee in bankruptcy, but remained with the bankrupt to indemnify it against loss. The bankrupt proceedings may therefore be dismissed from consideration.

It is settled in this state, in accord with the weight of authority elsewhere, that a policy of insurance like the one before us is a contract to indemnify the assured alone; that there is no privity of contract between the insurer and the injured employee; and that payment of the loss by the assured is a condition precedent to the right to maintain an action on the policy by the assured. Stenbom v. Brown-Corliss E. Co. 137 Wis. 564, 119 N. W. 308, and cases cited in the opinion in that case.

In the Stenbom Case it was also held that, under a policy wbicb contracted to reimburse tbe assured for a loss “actually sustained and paid” by him, tbe payment may be made otherwise than in' money, provided tbe same is made and accepted in good faith and there is a bona fide settlement and satisfaction of tbe judgment secured by tbe injured employee. In tbe present case tbe condition of tbe policy provides that there must be “payment in money” by tbe assured before there arises liability upon tbe policy. It may well be that this provision would logically take tbe case out of tbe last-named rule. We do not find it necessary, however, to decide that question.

Assuming that tbe words used in tbe present policy are no stronger in legal effect than those used in tbe Steribom policy, we are well convinced that there was no payment shown here. True, tbe corporation gave an absolute, note to tbe bank wbicb Eberlein indorsed, and tbe money was secured on that note. Had Mr. Eberlein turned that money over to Castonguay and been content to look to tbe defendant’s contract for bis protection, a very different question would have been presented.

But tbe money has never been used to pay tbe judgment, and never will be unless there is a recovery in this action first. This exactly reverses tbe terms of tbe defendant’s contract. That contract is to pay tbe assured what tbe assured has first been compelled to pay to tbe injured person. Tbe arrangement now to be substituted provides for paying tbe injured person what tbe insurance company has first been compelled to pay to the assured. To say that the assured has actually paid a judgment when tbe money has merely been secured from tbe bank on a note and never has reached tbe judgment creditor, but is held by an indorser of tbe note as security for bis indorsement and is to be turned over to tbe bank at once in case of failure in* tbe present action, is to make substance out of shadow.

Tbe case principally relied on by tbe respondent is tbe case of Herbo-Phosa Co. v. Philadelphia C. Co. 34 R. I. 567, 84 Atl. 1093. While there are some similarities in tbe two cases there are also very substantial differences, and we cannot consider it as controlling or even as very persuasive as applied to the facts before us.

By the Gourt. — Judgment reversed, and action remanded with directions to render judgment for the defendant dismissing the complaint.

---

Rehearing

The respondent moved for a rebearing and for a modification of the mandate.

In support of the motion there was a brief by J. A. Walsh & Bberlein & Larson, attorneys, and in opposition thereto a brief by Williams & Stern, attorneys for the appellant.

The motion was denied, with $25 costs, on November 14, 1916.