This is an appeal by the plaintiff, Harrison Hale, from a judgment of the circuit court which was entered in favor of the defendants after the court had sustained a demurrer to the complaint and the plaintiff had declined to amend. The demurrer charged that the complaint failed to state a cause of action. The proceeding was instituted under ORS 28.010 through 28.160, which, apart from two amendments, is the Uniform Declaratory Judgments Act. Our Act’s departure from the Uniform Act occurs in §§ 2 and 11 of the Uniform Act, both of which were amended by Oregon Laws 1933, chapter 14. The defendants are Fireman’s Fund Insurance Company and Fireman’s Fund Indemnity Company.
The plaintiff submits the following as his assignment of error:
“The Court erred in sustaining respondents’ demurrer to appellant’s complaint.”
According to the complaint, the plaintiff was injured within a year of December 28, 1952, by an automobile “owned and operated” by three individuals by the name of Smith. December 28, 1952, he filed an action against the Smiths but has not brought it to trial. After he filed that action he instituted the
So far as we can determine, this is the first case that has come before an appellate court in which an injured person, who holds no judgment against the purported tort feasor, has sought declaratory relief from the insurer. Due to that fact we again resort to the complaint. It alleges: (1) the plaintiff was injured by the Smiths’ automobile; (2) the plaintiff sued the Smiths, and his complaint in that case charged them with “having negligently operated their said automobile”; (3) prior to the plaintiff’s injury, the defendant insurance companies, for a valuable consideration, insured the Smiths against liability arising out of the operation of their car; (4) after the plaintiff instituted his action, the insurance companies were notified thereof; (5) the policy issued by the defendants provides that if the Smiths should become insolvent, that fact would not terminate the policy’s obligation; (6) according to the plaintiff’s belief, the Smiths will be unable to pay the judgment, if any, which he may recover; (7) the insurance companies “contend” that they are not obliged to pay any
It is seen from the foregoing that the plaintiff has recovered no judgment against the Smiths. His pleading in this case does not allege that they were negligent in the operation of their car, but states that his complaint in the personal injury action alleges that his injury was caused by the Smiths “having negligently operated” their car. The complaint in this case is not accompanied with a copy of the pleading which ushered in the tort case and it does not aver that that pleading states a cause of action. So far as is disclosed, the plaintiff may be seeking recovery in the tort action of a sum scarcely larger than nominal damages. The complaint in this proceeding does not attach to itself a copy of the policy of liability insurance, and the plaintiff does not aver that he is unfamiliar with its provisions or has been unable to obtain a copy. Although it is alleged that the defendant insurance companies “contend” that they are not obliged to pay any judgment which the plaintiff may recover, it is not stated that their contention is unjustified. If the plaintiff is unacquainted with the reasons for the defendants’ contentions, he does not so state and does not allege that he made inquiries in an effort to discover them. Although in oral argument plaintiff’s counsel declared that his client seeks a declaratory judgment, so that he may prosecute his personal injury action with confidence that the judgment will be paid, the complaint makes no intimation to that effect. It does not reveal the reasons why it was filed or indicate the manner in which declaratory relief will serve the ends of justice. Likewise, the complaint does not state that a grant of the relief which is sought will terminate any controversy;
We now face the problem of whether the averments above reviewed submit a justiciable controversy which is ripe for judicial pronouncement. A controversy, to be justiciable, must be “of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”
Maryland Casualty Co. v. Pacific Coal & Oil Co.,
We have mentioned
Indemnity Insurance Company of North America v. Kellas.
We now turn to that case when it reached the United States Circuit Court of Appeals, 173 F2d 120. That court, as well as the lower, carefully resolved the issue which this case presents. Before quoting we will identify the parties to it and explain the manner in which the issue arose. In that case, the plaintiff was the insurer, the insured was Willys-Overland Motors, Inc., the operator of the injury-inflicting automobile was Junior, and two individuals by the names of Buth and Ednamarie were the tort-claimants. Following the accident the tort-claimants instituted a damage action in a Connecticut court, naming as defendants Junior and the WillysOverland Company. After the defendants in that case had filed their answers, the insurance company, as plaintiff, instituted in the United States District Court the declaratory judgment action under review. It named as defendants the Willys-Overland Company, Junior, Buth, Ednamarie and another individual whose identity is immaterial to present purposes. It prayed for a declaration that (a) Junior was not operating the car with the permission of Willys-Overland, (b) Junior had violated provisions of the policy of insur
“Is there enough of an ‘actual controversy’ between the insurance company and the tort-claimants Ruth and Ednamarie to sustain the jurisdiction of the federal court on that basis alone? The tort-claimants have alleged in their action for damages that Junior was the authorized agent of WillysOverland, operating the automobile with WillysOverland’s consent and permission. If these facts are eventually established in the state court action, and if the tort-claimants prove their allegations of negligence, overcome the special defenses set up, and obtain judgments against Junior and WillysOverland, then it may be that some time in the future Ruth and Ednamarie will make a claim against the insurance company to satisfy their judgments. Even this is speculative, because if the tort-claimants get a judgment against Willys-Overland they will probably be able to obtain satisfaction of the judgment without recourse to the insurance company,since Willys-Overland is amply solvent, as is conceded. The most that can be said is that, as between the insurance company and the tort-claimants, there now exist the makings of a potential controversy in the future.
“To test the point, take a simple case: A, the named insured in an automobile liability policy, runs into and injures B. B sues A for damages in a state court, alleging negligence. There is no controversy between A and the insurer as to coverage, nor as to the insurer’s contractual obligation to defend; it is admitted, in other words, that the tort liability which B is asserting is one for which the insurer has agreed to indemnify A, and that the insurer is obligated to defend such suits on behalf of A, the insured. The insurer files a complaint under the Federal Declaratory Judgment Act against A and B, seeking a judgment declaring that A was not negligent in causing the accident and therefore that A was under no tort liability for which the insurer had agreed to indemnify A. Assuming diversity of citizenship as between the insurer and B, and assuming further that diversity of citizenship is not removed by realigning A as a party-plaintiff (as would have to be done, State Farm Mutual Automobile Ins. Co. v. Hugee, 4 Cir., 1940,115 F.2d 298 ,132 A.L.R. 188 ), would the federal court have jurisdiction of the complaint for a declaratory judgment? It would seem not, for lack of an ‘actual controversy’ between the insurance company and B, it not being enough that there is the possibility of a future controversy between them in certain contingencies. And certainly no court would give a declaratory judgment in such a case even if it had jurisdiction.
“Where an insured is being sued by a tort-claimant, and there is a genuine controversy between the insurer and the insured as to whether the tort liability thus being asserted is of a type covered by the contract of indemnity, and whether therefore the insurer is under an immediate eontractual obligation to defend the suit on behalf of the insured, it has been held that a federal court may entertain a complaint by the insurer for a declaratory judgment, naming the insured and the tort-claimant as defendants. Maryland Casualty Co. v. Pacific Coal & Oil Co., 1941, 312 U.S. 270 ,61 S.Ct. 510 ,85 L.Ed. 826 ; Maryland Casualty Co. v. United Corp., 1 Cir., 1940,111 F.2d 443 . But this is not to say that there was a controversy between the insurer and the tort-claimant of ‘sufficient immediacy’ so that the court would, on the basis of that controversy alone, have jurisdiction to give a declaratory judgment. Perhaps it would be more accurate to base the jurisdiction of the court, in this type of case, on the actual and immediate controversy between the insurer and the insured, the tort-claimant being joined as a necessary and proper party in order that the court may be enabled to give more complete relief. Maryland Casualty Co. v. Consumers Finance Service, Inc., 3 Cir., 1938,101 F.2d 514 , 515; Central Surety & Ins. Corp. v. Caswell, 5 Cir., 1937,91 F.2d 607 , 609. See State Farm Mutual Automobile Ins. Co. v. Hugee, 4 Cir., 1940,115 F.2d 298 , 302,132 A.L.R. 188 . * * *
“All in all, if the district court had technical jurisdiction to give a declaratory judgment upon the present complaint, it must be said that the ‘actual controversy’ between the plaintiff insurer and the defendants is just about the most anemic sort of controversy that might be imagined as satisfying the minimum requirements of jurisdiction. The district court gave the plaintiff the benefit of the doubt as to the existence of jurisdiction, and dismissed the complaint as a matter of discretion. Since we are clearly of opinion that the judgment of the district court dismissing the complaint must be affirmed, even considering it as a matter of discretion, we need not decide the point as to jurisdiction.”
We think that the reasoning just quoted is unanswerable. It shows that the purported rights upon
It will be noticed that the decision just reviewed took note of
Maryland Casualty Co. v. Pacific Coal & Oil Co.,
The Indemnity Insurance Company decision does not stand alone. We will now take note of seven decisions which reached like results in analogous cases.
Automobile Underwriters v. Joiner,
In
Follins v. Liberty Mutual Insurance Co.,
“is at best doubtful and conjectural. There is no present dispute between them, and there may never be any, for those persons may fail in their suits or be satisfied by the plaintiff before or after judgment, and be left with no claim of any kind against the defendants.”
Merchants Mutual Casualty Co. v. Leone,
298 Mass 96,
“only a contingent future possibility of dispute. The discretion of the court is usually exercised wisely by confining the operation of the rule to disputes already ripened.”
State Farm Mutual Automobile Insurance Co. v. Wise,
Wolverine Mutual Motor Insurance Co. v. Clark,
“Also, no certainly final judgment which would be res adjudicata of the rights of the parties,87 A.L.R. 1213 , can be rendered. The most the court could do would be to enter a prophetic judgment, i.e., that plaintiff will or will not be liable to Clark and Schaffner if Schaffner obtains judgment against Clark. Even such a judgment would be contingent because necessarily it would be based upon the existing state of facts, whereas plaintiff’s liability does not accrue until the future uncertain event of judgment for Schaffner against Clark, and as to Schaffner until service of his writ of garnishment. Zabonick v. Ralston,272 Mich. 247 ,261 N.W. 316 , and, in the meantime, the liability situation could be changed by reason of estoppel. Kipkey v. Casualty Ass’n.,255 Mich. 408 ,238 N.W. 239 ; Peters v. Sturmer,263 Mich. 494 ,248 N.W. 875 ; Beals v. Central Mutual Auto Ins. Co.,269 Mich. 477 ,257 N.W. 868 ; Michaelson v. Simula,264 Mich. 457 ,250 N.W. 264 . Judgments whose force may be affected by future events will not be declared.87 A.L.R. 1215 .
“Other reasons suggest themselves for denial of jurisdiction in the discretion of the court, but they need not be discussed.
“We hold that plaintiff may not maintain the proceeding in equity because its claim is legal, that the proceeding will not lie in either law or equitybecause plaintiff has an adequate remedy of defense in the regular law actions to which it may be subjected, and because no final judgment may be rendered.”
In Pennsylvania Manufacturers’ Assn. Casualty Ins. Co. v. Mack, 41 Pa D & C 629, the court refused to give insurer declaratory relief against insured and the injured party. Insurer claimed it was not liable because insured had failed to cooperate under the terms of the policy. The court, however, said:
* ‘ Since the litigation in Philadelphia County (the negligence action) may or may not end in establishing any liability upon the insured, and even in the event judgment for plaintiff should be obtained any legitimate defense could be raised by petitioner in a suit upon its contract of insurance, there are no antagonistic claims between petitioner and defendants which indicate immediate and inevitable litigation.”
In addition to ruling that it had no jurisdiction, the court said:
“Further we may add that this ruling is supported by the factual situation inasmuch as the petition for a declaratory judgment does not set forth the facts warranting a declaration that the company has no liability to Florence G. Mack (insured).”
In
United States Fidelity & Guaranty Co. v. Savoy Grill, Inc.,
51 Ohio App 504,
“Moreover, so far as Wiseman is concerned, he has no present controversy with the applicant for the declaratory judgment, and his having such controversy in the future depends upon an event which may never happen—he may not be successful in obtaining a judgment against Savoy Grill, Inc., in his pending action; and regardless of that contingency, he is not now and never will be interested in the controversy between Savoy Grill, Inc., and the insurance company as to whether the insurance company is bound by its contract to defend the action which he (Wiseman) has brought against Savoy Grill, Inc. Here again it is the established rule that a declaration will not be made as to future rights in anticipation of an event which may never happen, and in our Declaratory Judgments Law, we find no evidence of an intention on the part of the Legislature to change or modify that rule. On the contrary, such rule is recognized in the provision with reference to a declaration which would not terminate the uncertainty or controversy, andthe fully established interpretation of the law which requires the existence of an actual, rather than a probable or possible, controversy.”
We shall resort to the authorities no further. We know of none which ruled that a tort-claimant, who holds no judgment, may obtain declaratory relief from the insurer. In
Post v. Metropolitan Casualty Insurance Co.,
It must be apparent that the rights which the plaintiff says he possesses against the two defendant insurance companies are contingent. He may never win a judgment in the tort action. The defendant insurance companies are not required to do anything concerning the plaintiff until a judgment is entered in his favor against the Smiths and remains unsatisfied for thirty days. The situation does not reveal a controversy “of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” The quoted words are taken from Maryland Casualty Co. v. Pacific Coal & Oil Co., supra.
The authorities above reviewed demand that, under the circumstances averred in the complaint, we must hold that the pleading submits no actual controversy. The circuit court properly sustained the demurrer to the complaint.
Judgment affirmed.