*1 Emрloyers Appellants, v. Homan, Assignee, Homer Homan Homer W. Corporation. S. Corporation, surance Rein 289. (2d) January One, 23, 1940. Division *3 Swearingen O. H. L. appellant. and Robert Holder for Gowgill Popham Guy Green, Jr., respondent. W. *4 Stinson, Paul B. amicus curiae. against
DALTON, equity is an a C. This action judgments unsatisfied company. Plaintiff the holder two for company an insolvent bus was in- injuries which personal by insurer seeks to collect balance due on an insolvent sured company’s the bus insurer. the reinsurer of judgments from said equitable garnishment an proceeding this According appellant to money to apply judgment to insurance a by seeks “plaintiff which 5899, Revised Stat- 5898 and provisions debtor under the of Sections 4500). The 5899, pp. Ann., (Mo. utes 1929” Stat. sees. petition. plaintiff’s amended trial court sustained a demurrer dis- entered judgment was and plead Plaintiff further declined plain- against him. The taxing costs missing plaintiff’s petition and duly appealed. tiff has company, is an insurance alleges that defendant The (hereinаf- Indemnity Corporation Employers formerly as the known general insurance engaged in the Corporation), as ter referred to pas- were and his wife State; plaintiff that in this business a colli- Company, when Stage Lines Capital of the sengers on a bus his plaintiff and negligence, and company’s due to sion occurred a company and against the bus judgments injured; that wife were for ($32,500 $67,500 obtained for a total of were company railroad wife); plaintiff’s wife that $35,000 plaintiff’s plaintiff and owing on that there is due and plaintiff; assigned judgment her $21,195 principal as sum of judgments $3500 the said policy of a Stage Company Lines carried interest; Capital that as of the ac- the date full and effect on (in insurance force judgments by adverse reason of insuring it loss cident) any of its negligence operation in the arising by virtue of its rid- were and his wife including in which buses, the one Auto Insurance by issued the Continental ing; policy that the to as (hereinafter referred Illinois Springfield, Undеrwriters the terms of complied all of the insured with Continental); that part of made a attached to and policy; policy that said Stage Capital Continental, the insurer petition; Lines) a Stage had referred Company (hereinafter Lines (in full force with blanket reinsurance agreed accident) which defendant effect on the date ex- it and parties all insured indemnify “and said Continental Company for all amounts excess Capital Stage Lines pressly the $10,000 ac- for all amounts excess person one $5000 ’’ to and agreement, attached made cruing accident; from one all terms of petition, re-embodied part Stage Lines, that the Continental issued Continental agree- of said reinsurance the terms and conditions complied had ¡I ment. alleged particular bus of the that the further twenty- than capacity of more in the accident had Lines involved and of the total passengers four *5 $50,000 policy agreement wаs under the and corporation defendant gone the had into collision; that for one accident discharged in the Receiver had been receivership 1931; in that naught had been and for its and liabilities “dissolved and debts nothing; plaintiff’s judgments took that since held;” its creditors that date, not at and plaintiff were final the make claims said could precluded had receivership; now from relief the that was in $64,000 judgment debtor; that defendant collected from the other its corporation had some claims for the Continental liability; and discharged full reinsurance but had not its that corporation in the trial of said causes managed Stage employed charge Lines of and had counsel and taken Plain- Stage the defense on Lines in causes. behalf of each prayed equitable garnishment tiff for issuance of and for relief. agree- parties by
The stipulation copies policy have filed of the and agreed ment, as part petition, attached to and made a and have incorporated In said exhibits be record. abstract appellant pointed their briefs and dis- respondent and have out length provisions at policy agreement, cussed as various involving ap- if purposes both exhibits were before us for all their plication and Respondents construction. have also out the said set ‘‘ appendix state, exhibits full an their The brief and further must, therefore, solely allegations facts taken from the petition and attached exhibits.” No taken evidence was however below, in the court and the cause was ruled on to the demurrer petition. Highland
In case of City Investment Co. v. Kansas Com puting Co., 365, 374, Scales 895, 897, court S. W. this ‘1 said, always It plead been held that an instrument filed with a ing as an determining sufficiency exhibit not to be considered in pleading. . . though peti . And that is true even allege tion expressly . . . part that the exhibit is amade thereof. But it will ignored be notiсed that all such cases the is to be exhibit only determining sufficiency pleading as ‘An such. exhibit petition part attached is not so far a it from, self as to the petition being save bad on demurrer. . . .’ may exhibit allegation The be considered fact, a substantive but in aid explanation formally body lodged the fact in the may pleading. allegations not supply out to set a cause of action, but aid the and make certain other what would wise be uncertain.” holding This approved in the case of State Igoe ex Joynt, rel. 793, 110 (2d) 737, S. W. 739. position view of the parties taken keeping
rule above set pertinent announced we out the provisions policy agreement, the two exhibits petition. attached to the September 17, issued the Continental Stage Lines, among things, other provides hereby agree Continental “Does indemnify” insure “. Lines legal actual loss from liability arising or resulting from claims insured reason of the ownership, *6 .; . if such . described
maintenance or of the automobile nse . suf- Bodily . . injuries (A) are of: claims made on account an acci- result of by any . . as the fered, person persons, or Damage (B) . in . . occurring this force policy dent while foregoing to the ... In addition property to or of destruction and in name agree defend, hereby (a) to does Underwriters brought any . . . assured, on behalf suit of.the are accidents damages, to on account of such assured recover in- that the .; (b) . provided policy for terms of this . and this legal liability covered demnity against from loss any in against the assured taxed . . . shall cover all court costs judgment, accruing on the legal also interest proceeding, such and therein, rendered interest, including judgment, and which costs this indemnity in provided any, if do not the maximum exceed hereby description policy. company . waives . . The any final agrees pay to to insured hereunder and motor vehicles motor by any all injury . and judgment personal . . causеd for pub- operated by the to the certificate pursuant assured vehicles Com- necessity by the Public Service issued lic convenience and schedule shown out in the Missouri, mission of within limits set judg- any such agrees pay to herein, upon and its failure further any court an action ment, judgment such creditor maintain jurisdiction . competent compel payment. to . . such “Liability damage . . vehicles over property and limits: . and passenger per person capacity, $5000 not less or more than $50,000 liability . total . .” The reinsurance and Continental between defendant agree to hereby and
provided Corporation reinsure “does indemnify of Five Thou- . . all . loss excess injury person, one ($5,000.00) sand Dollars for or death of or injury death ($10,000.00) excess of Ten Dollars for Thousand any event, such of more one where person than one accident or loss . Automobile Public accrues to Reinsured its . . Liability a. m. on Policy, to take on after 12:01 issued effеct or day Agree- August, 1926, prior 1st termination of this exceeding the ment, policyholder to cover amounts only forth; being mean agreed amounts set that ‘loss’ shall above actually paid those amounts settlement of claims claimants including judgments. interest pro contributing rata rein-
“This reinsurance is excess and not or only in ex- surance, applies REINSURED named, at cess the amounts herein which amounts are retained first liability, as a loss shall accrue risk the REINSURED first before to the CORPORATION hereunder. subject following . “This reinsurance is conditions: “2. The REINSURED shall file the CORPORA- FORMS. endorsement-form policy-form copy of each specimen TION n used the REINSURED automobiles; liability on owner’s cover to all he hereunder shall thereupon each reinsurance en- policies such conditions special terms and *7 dorsements. pay shall The REINSURED PREMIUMS. “3. REINSURANCE the of reinsurance, premium as for this to the CORPORATION 55% in ex- for all limits by charged the REINSURED premium excess . hereunder. . . $5000/10,000 reinsured cess of pre- unеarned reinsurance for . be allowed . Credit will . . . miums on account of cancellation jointly right participate have the shall
“The CORPORATION adjustment and settlement investigation, with the REINSURED the officers of the CORPO- which, judgment in the upon claims the exposed, and might interested or RATION, is, become the agrees cooperate with CORPORATION REINSURED liability legal may made in each ease where end that settlement be expense to the CORPORA- exists, a minimum of apparently with . . TION. . its losses prompt settlement “The will make CORPORATION definitely finally determined. same are
hereunder as soon as the Liability OF LIABILITY. CORPORATION “7. PERIOD simultaneously the RE- upon each risk shall commence INSURED, reported are to the CORPORATION provided cessions conctirrently with provided, shall continue hereinbefore liability liability and cease when REINSURED . . respective policy. terminates under the . REINSURED agreed that the business of “. . . understood. in- has a reinsurance
REINSURED which CORPORATION REIN- property absolute hereunder, terest is the sole and agrees any infоrmation SURED, not to use and the CORPORATION contemplated herein. any purpose other than acquired so for AND This DATE TERMINATION. “EFFECTIVE day August, 1926, shall effective as of 12:01 on the 1st become a. m. by by until and shall continue effect cancelled mutual consent or hereto, upon party thirty days’ party either service the’other writing, stating upon future what date cancellation shall be- notice participate shall come CORPORATION all effective. coming scope agree- of the REINSURED within the of this
business thirty day . . . during period, ment right expressly reserves the to terminate
“The CORPORATION upon specific previously accepted, upon risk its reinsurance REINSURED, days’ to the twenty notice where the records or infor- risk experience such show same to mation or be unsatis- , disproportionately great. factory hazard or the “Any agreement shall, however, termination of this the liability upon any dur- CORPORATION claims accrued ing period (Italics ours.) the effective hereof.”
Appellant (1) that the contends states a cause of action because company’s Section “the becomes casualty absolute whenever a loss occurs on account of a covered such insurance payment and the of the loss does depend upon judgment satisfaction the assured of a final against him loss,” (2) because, 5899, “gives such Section judgment right creditor proceed equity against the in- company surance apply money to reach and the insurance ’’ judgment. satisfaction of the Respondent insists that the demurrer be- properly sustained cause fails to state a cause of the rein- action (1) surer: the contract indemnity against Because was one of loss rather than one of insurance on part of the de- fendant primary accrued until the actually insurer (2) the loss. *8 Because privity there is no of contract between the the plaintiff and plaintiff no'right and therefore of action on the rein- against surance contract as (3) defendant. Because the fails allege a loss as by described in covered the so as contract give rise to a under agreement. the reinsurance (4) Be- cause said sections of the not apply give rights statutes do action to under the facts here. allegations From the petition, of the we must assume that the policy of insurance awas Missouri respondent contract and concedes that we must assume the reinsurance is a Missouri governed contract by and is the laws of this State. Sections 5898 and 5899, (Laws Revised Statutes 1929 of Mo. 1925, p. 274, 2), secs. and (Mo. Ann., 5898, 5899, Stat. pp. 4499, 4500) were force and effect when the policy written, they became and part were a policy said fully insurance as much as if set out therein and nul any contrary lified provisions policy. v. Insurance [Head Co., 403, 413, 241 Mo. 827, 830; McKinney S. W. Fidelity v. Mut ual Liability Co., Ins. Mo. 193 S. W. (2d) 567; Yeats v. Dodson, 345 127 W. (2d) 652; S. Smith Equitable Life Society Assurance (Mo. App.), 107 (2d) 191, S. W. (cid:127) It unneсessary is to set out provisions of the statute herein. They regulate payment the casualty contracts of insurance by occasioned loss on bodily injury account of or death or damage property provide remedy. These sections were considered by this court in the case of Schott v. Continental Insurance Under writers, 92, 102, (2d) 7, 12, S. W. and this court said: analysis “An regulates the act discloses that it payment the particulars: (1) prescribes three the time when payment the made, (2) shall be person the to whom it shall made, be and (3) the first may respect .-With tbe manner in which it be enforced. until may payment payment: the The insurer not defer
accelerates by latter the judgment after a the insured has been the accrues obligation pay the the insurer to money; part on As to judgment against has been rendered. moment insured judgment recovery final second, provides of a act money applied insured, shall be insurance may рre- not be judgment, application satisfaction of and such such insured insolvency discharge bankruptcy by vented or between policy nor the cancellation of the or a settlement merely prescribed regulation insurer and the insured. The third given effect. may ones preceding the method which the two if it act; ‘Regulation payment’ single objective is the changes casualty insurance claimed effects the contracts of grow out appellant, changes merely then are incident to and such regulating provisions payment. . . . “ one, temporary ‘The lien in favor second section establishes casualty resulting him insured put damages, who has from the against, judgment, due under the form of a on amount him policy as and the insurer. It also affords between insured judgment . No discussion the usual remedies of a creditor. Legislature may appro- that the establish required to demonstrate rightly created, and priate existing rights relief for or thоse forms of pro- provide equitable procedure that it for the enforcement ” rights.’ Gethro, tection of such Mass. supra.] [Lorando [228 185, 188, 117 N. E. 1 A. L. R. 1374.] allegations that the apparent view of the it is definitely plaintff has been fixed and the Continental policy applica- under the and under said statutes. The determined insurance, to the first and as between tion of these statutes *9 question the must conceded. The plaintiff and said Continental apply or not the said statutes to the reinsurance arises as whether plaintiff may agreement, and as to whether or not maintain this rights action, against as the facts stated in or has defendant under petition. the reached, of the conclusions have in this case is un- view we it.
necessary pass upon proposition the for us to to whether or not 5899, (Mo. Ann., 5898 and Revised Statutes 1929 Sections Stat. sees. 5899, 4499, directly 5898, pp. 4500) apply particular the contract question of reinsurance under consideration. The sole presented is properly or not the demurrer whether ruled. If the amended action, regardless a application stated cause the direct contract, ruling to the reinsurance then a on of said statutes that question required. is not strictly that
Respondent contends the contract is one of re indemnity insurance; solely it is a contract of that between against rights as has' no defendant; that and tbe Continental without could not recover even defendant; and that closing the sentence is called to attention having paid the loss. Our being agreed “It contract, as follows: paragraph of the of the first actually to claimants only those amounts shall mean ‘loss’ at bring an action may not general is “that an insured rule re- contract under a strict of the risk a reinsurer law them. of contract between privity is no there insurance because the ordinary case, is taken out reinsurance, in . Such loss, it indemnify from reinsured order benefit insolvency in- upon principle settled become to be distributed reinsurance are assets surer, proceeds equit- special no the insured has amongst generally its creditors Brick of Colonial States Use them.” able claim [United (Citing cases Surety (2d) Co., 72 Fed. Corp. Federal v. 967.] many jurisdictions.) from original that, after a loss under the general rule is even “The pref- equitable no lien or originally insured has policy, person the reinsurance.” v. upon proceeds of erable claim [Morrow Apps. Texas), (2d) 66 S. W. Burlington (Ct. Basket Co. of Civil 746, 749, citing authorities.] recognize rules. [Strong courts above
The Missouri Land, 225 Mo. Co., 296; 62 Mo. Thomas v. Insurance Phoenix The American (2d) 1037; Gantt v. 216, 220, 30 S. W. App. Co., Insurance Central totally from, is and uncon- of reinsurance distinct “The contract original having with, primitive insurance; assured nected solely reinsurer, remains against the reassured kind of claim insurance, against the original and alone has a claim on the liable originаl bankrupt, Therefore, insurer becomes where reinsurer. only gets estate, re- a small dividend out of his the assured pay the whole amount of the reinsurance to the insurer is still liable original insurer, deducting assignees dividend; without original respect has no claim them in assured follows, money privity ... It thence that there is no paid. so reinsurer, original assured and the and that the between solely is exclusive and to the reinsured.” [Strong over the reinsurer Co., Ins. supra.] v. Phoenix
Ordinarily contract, pro a reinsurance it contains unless contrary, purely indemnifying against contract visions paid. will lie until the loss has been and no action Demo loss [Vera (N. Society Corp. J.), Bankers Life Ins. 767; Atl. crazia *10 County Bergstresser, 424, 276; 57 D. 233 N. v. S. W. American Clark Surety Co., American 127 Va. Bonding 209, 599; 103 E. Co. S. 611; Lowe, 424, Ins. 349 Ill. N. E. Union Central Life Co. v. Carr, Ins. 162 N. 608,
Baltica Co. v. Ill. E. 178.] agreement however, is Continental, Tbe between defendant strictly as must written reinsurance contract. We consider legal rules for proper determine its effect under construction. State, be- course, recognize courts of this the “difference indemnity indemnity against tween contracts of and contracts of loss against liability. company In the does not former the insurance become amount of actually liable until loss has suffered and the been paid the insurance until does not become available the assured loss, obligation whereas in the latter of the insurance case company liability becomes fixed when attached to the insured.” Dog (Mo. v. Bull Assn. 267 S. W. App.), Auto Fire Ins. [Klotzbach 39, 40.] However, expressed place “Where a so as to on the contract is indemnitor, indemnify against loss, the promise whose is to addi obligation regard tional mat performing some act indemnity indemnitee, neglect ter for the benefit of the on his perform act, right an action to the in immediate will accrue any damage.” demnitee whether or not he has sustained actual Dog Assn., case, v. Bull Auto Fire Ins. In such [Klotzbach supra.] for example judgment rendered, as an pay will give an immediate cause action in of failure performance, case and without judgment being paid the insured. policy
Where a general language of insurance contains such indemnity ambiguous reference to or as to be and uncertain policy against will insuring be declared as absence action,” of what is clauses, called “no or requir similar such as one ing brought actually action be the insured himself loss by him judgment against sustained and of a satisfaction him. Hartsock, [Pickering App. 822; 287 S. W. Casualty Underwriters, Wehrhahn v. Ft. Dearborn App. 230, 239, (2d) S. W. been It has noted that the contract determining contains consideration no such clauses. wheth indemnity loss,
er the indemnity against contract is one liability, we further take provisions into consideration the contracts under which took defendants over the defense of the original Stage causes alleges Lines. The facts as to defendant’s construction of the in that defendant is said to charge managed have taken damage the defense of both suits behalf of the on Lines. Wehrhahn v. Ft. Dearborn Cas [See ualty Underwriters, supra.] particular We will review the provisions terms and of contract, they may allegations so-called insofar make certain which are For example uncertain. the word “indemnify” in the petition used stating without it means whether *11 with- “loss” is nsed the
indemnify against liability, and word loss or actually “amounts it means or not out a as to whether statement “liability indebtedness.” paid” or from accrued to-wit, per cent agreed paid, to be a valuable For consideration ex- for all limits charged by premium the Continental of the excess reinsure corporation did the defendant cess of (1) $5000/10,000, of indemnify for all loss excess agree to (2) and Continental actually agreed to be amounts prescribed. Loss was “those limits later However, .” “loss” was paid . . the word tо claimants “. . Where clearly meaning liability, example: as for . used as shall . . before loss . .” “. loss to the insured. . accrues make and, corporation “The will corporation .” accrue to de- ... its ... as soon prompt settlement losses of rata pro and not The defined as excess reinsurance was termined.” only to the contributing applied The or reinsurance. The the amounts named. in excess of Continental liability” “be- the amounts indicated retained, “as Continental first Corporation agreed The Corporation.” shall fore loss accrue the same defi- prompt settlement of its losses as soon as were to make finally petition alleged that the Con- nitely and determined. The must agreement terms of the and we complied tinental had with the policy and premiums that all were and that the forms assume therefore, reinsurance, filed. Each includ- endorsement forms were Stage ing policy issued to the reinsurance Continental “subject special all terms and con- Lines, was to Stage agreed policy to Lines. ditions” of issued upon each risk” should “commence “liability Corporation that of and should “continue simultaneously with the reinsured” By concurrently with the reinsured.” reason statutes, to, policy, agree- the term the heretofore referred Stage in- .policy Lines to ment of Continental its merely demnify against liability “loss” amounts actually judgments had paid on or claims. addition Continental judgments Stage Lines, expressly agreed pay rendered Corporation policy. terms had a in- within definite Stage Lines, in the issued but the terest “ agreement provided: agreed It is understood and the business Corporation reinsured in which the has a reinsurance interest property was the sole absolute reinsured and hereunder” purposes obtained not be used for that the information would other Corporation right parties. The reserved the than intended any specific its risk after certain notice and terminate reinsurance of Corporation “participate should in all business also that the provided scope coming within the for a the reinsured of” days Corpora- after notice of intention to cancel. The period right jointly in in- “participate with the tion had the reinsured vestigation, adjustment claims,” according settlement employed charge (as seen) attorneys tbe we have and took managed of and on defense of each case behalf Lines.
(All ours.) italics keep allegations
We must mind the to the effect agreed indemnify parties that defendant in- Continental and all *12 by Stage sured it and all especially the Lines for amounts in of excess agreement the amounts indicated and that said re-embodied all the policy terms by agreement of the issued Continental. An to in- the demnify Stage Lines, however, alleged and the view facts indemnity against above statutes liability would have to be and not policy loss. A consideration and the reinsurance leads properly pleaded us the conclusion that legal policy Although “against effect of said and contract. the words liability” expressly are not used. policy by Lines,
In the issued the Continental expressly only agreed, pay any judgment Continental final for personal injuries by any caused of operated the said vehicles Stage Lines, agreed any but further upon pay that failure to such judgment, judgment any such creditor could maintain an action in jurisdiction competent court of compel payment. such In addi- of tion and reason part statutes which became a and were policy, obligation such of Continental was absolute.
The contract, prior for made to the contract primary insurance, provided that each reinsurance thereunder should “subject general be to” all of the special terms and conditions policies and endorsements reinsured thereunder and that liability upon each risk should simultaneously commence with that of the Continental and concurrently “continue with the (Continental), reinsured” provided and that the reinsurance applied excess and to the Continental excess of “subject The amounts named. words to” must be construed natural, plain ordinary signification. “subject their The words by lexicographers meaning “liable,” to” are defined and the obligated equity; word “liable” defined as “bound or in law or responsible; Dictionary answerable.’ New International [Webster’s (Second Edition); 60 673; Hannibal v. Elzea, C. J. Trust Co. “Subject S. W.
Mo.
to” is also defined as “con
377.]
by.”
Turnbaugh,
427, 441,
Morrison
W.
trolled
v.
192 Mo.
91 S.
[See
152, 155; City
141, 148,
City,
Westport v. Kansas
15 S.
68, 69;
Railroad,
2li, 219,
W.
W.
Gratz
65 S.
225.]
particular
provided,
The
the contract
(in
clause of
event rein
complied
terms,
allegations
sured
with its
and in
view
did)
performance we must assume that
that “each reinsurance
special
hereunder shall
to all the
be
terms and
policy
conditions of such
endorsements.” We think
this clause
manner with
sense
reasonable and common
in a
should be construed
time the con
at the
necessary
parties
intention of
a view
terms and conditions
course, only such
meant,
made.
It
tract was
be
of reinsurance
reasonably
to such
contract
applicable
as were
therefore,
conditions,
as the
terms and
parties and such
tween
contract was
in mind
to have had
when
presumed
parties
431, 7 Atl.
114 Pa.
Philadelphia,
Assn.
made.
Fire
[Haws
Co., 11 R. I.
Ins.
British & Mercantile
159, 160; Whipple v. North
Stage Lines,
original policy issued
any final
payment,
for the
provided
seen, expressly
as we have
by any of the motor vehicles
personal injury
for a
caused
judgment
forth,
limits
and further
by Stage Lines,
set
within
operated
any
judgment, such
final
pay
such
failure
provided
of com
court
maintain an action
judgment creditor could
We think that it was
compel
payment.
jurisdiction to
such
petent
provi
parties
such
contemplation
reasonably
within the
and the
the reinsurance contract
part
of'
become
sions
thereby
for the bene
for the excess.
reinsurer became bound
*13
judgments,
such
for which
insured that
and for its
fit of Continental
by
The reinsurance
liable,
such contract.
it
be covered
was
If
terms
the
upon
in
the same
and conditions.
was
effect
excess
out
subject
provisions
to
to the
set
in
was not
be
reinsurance contract
any
to-wit,
judgment against
primary
contract,
that
the
insurance
definite
Stage
paid
contract could have been made
Lines be
subject
particularly appropriate
It
a matter
certain.
was
contract,
particular
in
the reinsurance
view
matter of
may
contract,
presume
par
that
df the reinsurance
we
terms
was
when the contract of reinsurance
ties had such result
view
alleged
that defendant’s
made.
In
connection we
assume
this
by
pro
against
Lines was
reason
of the suits
dеfense
suits,
provision
the said
about defense of
which
vision
its terms.
agreement was
under
reinsurance
is one of
that the reinsurance contract
Defendant in its insistance
indemnity
primary
against
(where
loss
until the
accrues
Fidelity
loss)
paid
on the
&
insurer has
cites and relies
case
Sup.
224,
Deposit
Pink,
S.
82 L.
of Md.
Ct.
U.
Co.
provided
In
that’“the reinsurer does
Ed. 213.
that case the contract
.
.
.
hereby
against
pro
reinsure
.’ .
loss.
. The reinsurer’s
.
paid
!
.
shall
to the
portionate share of the loss
reinsured
reinsured,
upon
items
upon proof
payment
of such
delivery
copies
the reinsurer of
of all essential documents
payment
.
.
Re
loss .
and the
thereof.”
concerned with such
Western
spondent also
the case of State ex rel.
Automobile Ins.
cites
by-laws
Trimble,
659,
Respondent also relies the case of Greenman v. General Corp., App. Supp. Reinsurance Div. 262 N. Y. affirmed opinion, without 262 N. Y. N. E. 128. quote opinion: plaintiff, having
We from that “The seri- suffered injuries accident, judgment against ous an automobile had Fidelity against liability Jersey owner who was insured the New insolvent, Company. being & Plate Glass Insurance owner plaintiff brought provisions an the insurer action judgment of Section 109 of Insurance rendered Law was company liquidation it. That insolvent and into became went Jersey paying judgment. in New without liability policy
“Prior to the issuance of the the acci- and'before dent, Corporation Reinsurance had entered into a contract General Jersey Company New to reinsure its risks over and above specified amounts, certain the latter which retained as its risk. policy, for, reinsuring
was not usual instead risks already insured, an insure future . . . risks. that, although party contends is not re- “The he beneficially contract, therein, insurance he is interested and is entitled says portion to recover that of the loss reinsured. ... he under the of the contract the intent terms directly suffering
should liable become those loss. .” nothing The court then held: “There is in the contract when fairly rationally read and purpose construed indicate a of co- *14 may insurance. . The an cases which insured recover from language a reinsurer are those where the of the itself indicates directly the intent to become liable. ... It would be a strained language obliga- of construction of this contract to find a direct indemnity tion is a to insured. contraсt with New Jersey ordinary rein- Company appears in what to be terms surance.” recognizes opinion the reinsurer be lan- liable where the
guage of the contract indicates such an intention. Respondent Sophia also cites: Bros. v. General Reinsurance 6; Co., 565, Supp. 274 N. Y. 153 Misc. Cosmopolitan Bethke v. Life App. 586; Casualty Ill. Co., Ins. 262 Commercial Ins. v. Co. Colum Casualty Tenn.), (2d) 125 (Ct. Apps. 493; People’s bia S. W. Co. Company Co., 993; Ins. 282 N. Y. Supp.
Metalware v. General In Pennsylvania surance Park & Pollard 180 N. Company, Co. Y.
666 many jurisdictions but Supp. 143, from and numerous other cases none deal here. with a contract like the one under consideration [See also, Y. 608, 4 N. Corp., Gutride v. General Reinsurance 167 Misc. Supp. Bonding (2d) 387; Fire v. American Globe National Ins. Co. Casualty 735, Id., & Co., Iowa, 1072, 728, 200 N. W. 195 N. W. N. W. reinsurance the last case the insurer obtained 268.] recovery pursuant agreement insured, original to primary equity. insured allowed provisions
After a consideration of all of careful authorities reinsurance, contract of after a consideration оf the not a cited, the contract we have reached the conclusion fact, indemnity against is, mere contract of a contract loss but indemnity against liability. Fireman’s Fire Ins. Co. v. [Allemannia Pickering v. Co., Sup. 815; Ins. 52 L. U. S. Ct. Ed. Underwriters, Casualty Hartsock, supra; Wehrhahn v. Ft. Dearborn the definition all of the terms of the contract supra.] Under controlling, actually so not “loss” as “amounts to claimants” is to strictly indemnity against loss, or as to make the contract one of prevent recovery by plaintiff herein.
Defendant, according allegations petition, discharged liability agreement, its full under the reinsurance judgments against Stage Lines, alleged, the extent re and the to agreement that the unpaid. provides main The reinsurance due liability applies in excess to Continental under the contract shall amounts named and that each reinsurance special conditions of to all of the terms and liability was policy of The reinsurance of Continental’s insurance. maximum excess above amounts indicated within judgments When the rendered limits set said contract. were against against Stage unpaid a cause of action Lines and remained ¡accrued Stage policy, plaintiff Lines and to to under the action, under the of the reinsur under the statutes. A cause of terms agreement, plaintiff also defendant. The ance accrued liability Stage plaintiff amount of Lines’ had been determined because, according privy, proceedings to which defendant was charge managed petition, defendant took of and the defense Co., against Stage Lines. v. Phoenix Insurance [Strong the eases liability plaintiff Lines The measure liability plaintiff. The mea also the measure of Continental’s this cause must be sure of the defendant into by the terms of the entered between measured payment judg providing for the and Continental Stage Lines in excess of the amounts fixed and within ments plain measure of of defendant to prescribed. The the limits *15 alleged, remains and is the same whether Con the facts tiff, under alleges The that or insolvent. some remains solvent tinental
667 arising claims plaintiff out of his the collision wbicb wife injured discharged have been settled that has not but ^vere liability its full discharged under its contract. If defendant has liability its full that would al- be a matter of defense. The leges from appears statutory facts contract lia- which bility of plaintiff’s Continental for the to application of the insurance judgments judgment not to now be been reduced and cannot judgment. liability reduced to depends But plaintiff defendant’s on whether or not The to him. have been liable would circumstances, however, prevent do not of Conti- ascertainment liability nental’s proceeding in this equity in order to determine extent of liability plaintiff defendant’s of the re- under the terms agreement. against insurance Plaintiff has his exhausted remedies Continental. judgment Nо can be obtained it nor can it be made party proceeding. Dodson, to this [Yeats (2d) 652, S. W. 656.] discharged Since obligation defendant has not its full the said reinsurance to the extent of the and within excess agreement, limits fixed terms of and has paid judgments plaintiff, and has not sum to Con said tinental, its or assigns, plaintiff.’s receiver benefit or otherwise amount, discharged liability, its liability and since the as between plaintiff Lines has proceeding been determined in a which defendant participated, liability plaintiff Continental’s under the statutes can be determined the basis of judgments said privy, which defendant was a and can deter proceeding, mined this opinion we are the. proceeding defendant, this is entitled to have provided extent of for under the terms of said
agreement, petition, and with reference to facts stated in the subjected payment plaintiff’s judgment. Grbavach v. [See Casualty Co., App. Cal. 836; Pac. Bruckner- Indemnity Co., (2d) 434, Mitchell Sun Fed. thereforе, petition, states a cause of action defendant. sustaining The trial court dismissing erred demurrer and judgment is, therefore, petition, the and the reversed cause remanded with directions to reinstate cause and overrule the demurrers. Hyde Bradley, CG., is so ordered. concur. PER foregoing opinion C., CURIAM: -The is adopted Dalton, opinion judges
as the of the court. All the concur. Rehearing. Motion eor
ON (cid:127)DALTON, Respondent contends that we have overlooked the C. present “brought exclusively fact that action under and *16 1929, 5899, Mo. and
virtue of Sections 5898 and Revised Statutes per- apply statutes must contracts be held reinsurance .such prayer mit the in the present action,” particularly plaintiff since petition and requests equitable his “the court to cause to be issued the above garnishment in with” directed to defendant accordance of the statute. sections petition in the opinion pleaded
In the we have outlined faсts sought. particular theory upon relief was and stated the which a petition closed with prayer special to the for relief the addition and general follows: for such other prayer for relief as “And just, premises further orders as to the seem mete court ’’ considered. make and concise state only required plain Plaintiff was “a “a constituting action,” and to make ment the facts a cause of plaintiff may suppose himself demand relief which (Mo. Ann., 764, p. 983); Liese entitled.” R. S. Stat. [Sec. part Meyer, 547, 555, prayer 143 Mo. 45 S. W. was v. 282.] relief, disregarded determining petition and could be in what Eubanks, any, if is authorized v. [Caldwell general (2d) 976, prayer 30 S. W. Under for relief 980.] may grant any pleadings court relief consistent with the evidence. Bunch, 500, 507, S. Ye are here deal 90 Mo. W. [Muenks 63.] en ing petition, a demurrer to the and “whether with prayed matter, provided he all or the relief does not titled to ’’ Ground, to some on the facts stated. entitled relief [Barnett seen, Sinсe, 263 S. as we have W. requiring -relief sufficient to constitute cause of action stated facts should be overruled. equity, in demurrer away have twisted the contract from Respondent contends we meaning given it a ordinary and have strained and normal and its in transposed It contends that we have fact unnatural construction. insuring portions various the contract confused “the clause” terms of which are said to be other the contract “conditions.” with says unnecessary to define the “loss” Respondent that was word every used, instance in it was and insists that have which we emphasis” upon placed portions “undue certain contract. Ye opinion properly subject think the is to this criticism. do not strictly opinion held that the contract was not a rein- In the we primary made before in- contract. It was the contract surance indemnity against made. It is not a contract for loss. surance was policies filing primary for of all provided It insurance - subject agreed thereupon each reinsurance should to the policies. many special terms of such contains ad- appearing the usual reinsurance provisions contract ditional reported cases, example, it provides; where “This referred applies only to the excess.... stated, amounts first herein reinsured excess of tbe which liability, retained at risk of the reinsured as a first amounts are corporation to the hereunder.” No loss shall accrue case deal- before ing having provision that por- a reinsurance contract such a contract, precedes “conditions,” tion of which has been question precedes called to our attention. The clause in the state- following ment the contract that this reinsurance is *17 “conditions.” provides filing
Under “conditions” the contract for the of each policy form and provides endorsements and that “each reinsurance herеunder special shall be to all and terms and con policies ditions of agreed such or endorsements.” that “the corporation prompt will make settlement of its hereunder as losses definitely soon finally Eespondent as the same are and determined.” agree concedes that there is no standard form excess reinsurance Indemnity ments. In the Bruckner-Mitchell, Inc., case of v. Sun al., (2d) 434, 444, Co. et 82 Fed. the court “It said: is true that typical agreements operate original reinsurance do not favor They insured. merely indemnity are contracts of of the insurer and privity original there no insured the reinsurer. and between nothing But drafting agreements the law forbids reinsurance special they operate original terms so that will favor of in sured.” In that ease the reinsurers a given contractor’s bond benefit the District of Columbia and certain materialmen were held liable in equity materialmen, suit although the re agreement only insurance not materialmen, did mention the but District of Columbia. The court said: “We think the first rein agreements in surance typical agreements the instant case were not but special, according were and we conclude that to the terms thereof the reinsurers are liable to materialmen.” As to who enforce liability of a reinsurer see extensive notes A. L. B. 103 A. L. B. 1485.
Eespondent places insists emphasis “the court part undue on that stating ‘liability of the contract corporation each with that of the reinsured n simultaneously risk’ shall ‘continue ” concurrently liability ‘continue should with the of the reinsured.’ We believe that we have construed the contract as a whole and have purpose arrived at its true intent and from the terms used in the contract.
Eespondent “subject merely insists that to” clause fixes the liability gives rights of the reinsurer to the reinsured and no to third parties. however, respondents, only The authorities cited deal indemnity reinsurance pure сontracts which are contracts of clearly any provisions do not undertake to make and which for the parties. provisions third We benefit of have held effect primary in the conditions insurance which could have wbicb tbe reinsurer and application as between tbe reinsured tbe as between application not have force were intended to reinsurance con- apply tbe reinsured and tbe reinsurer would adopts “subject to” clause opinion not bold tbe tract. Tbe does and conditions of tbe terms agreement all into the reinsurance applicable particularly original only provisions policy, those tbe but tbe reinsurance contract relationship parties to tbe tbe between abe contract, intended to were which, of that under tbe term^ part thereof. subjects defendant opinion
Respondent contends that “the assigns both have since double Continental’s agreement, in far so cause of under it.” Tbe reinsurance action Lines, against Stage any judgment provides payment it for the only plaintiff, benefit, not but is, coui’se, an for tbe although Continental, primarily for also of Lines and beneficiary. de- primary But plaintiff, ultimate and benefit agreement will be dis- fendant’s petition, upon charged, set forth in the so far as relates the facts funds, liability of application representing *18 agreement, payment plaintiff’s of under the terms of to the said of action for judgments. If Continental collected under its cause liability discharge .its pay judgments failure of and defendant to recovery plaintiff been for the thereon the would have benefit Surety States, v. 234 (in Equitable this Co. connection see United 448, 456, 803, 805, 1394). 58 Sup. S. Ct. L. Ed. U.
Respondent reasoning the opinion contends that the breaks down an put liquidation under when we consider that Continental appointed a and thereafter order court and that receiver discharged. not, particularly in view of the fact that We think beneficiary agreement for the plaintiff was the ultimate pay- judgments against Stage judg- Lines ment of rendered and for which and liable. This ments both Continental defendant are court liability proceeding in this as between determine agreement terms of the under the reinsurance which was by Continental, though even the defendant and executed receivership. inbe has been filed on behalf of amicus curiae. It is
A brief contended is typical that the contract under consideration a reinsurance contract indemnity only against loss; that providing “not line within agreement expresses implies any either or the four corners phrases intent;” that the various words and contract other an “support intent insure lia- not conclusion do exactly parallel is bility;” the reinsurance agreement under the reinsurance consideration in the terms of Co., 49, v. Insurance 136 Ohio St. Excess decided Stickel case by а divided court. We think the 22, 1939, November contract easily distinguishable here. there is from the one under consideration Fidelity Pink, Deposit as The court followed the case of Co. v. super- seem applicable
the most case and thereafter said "it would for, turn all, fluous to cite authorities after the decisions additional largely upon language particular under examina- contract particular tion case.” words, is "subject further insisted that as used in the to” agreement imply obligation liability. assumption
reinsurance no or grantee Cases are cited to the effect that title land when a takes reciting conveyance deed "subject that the is certain incum- to” brances, imposes liability. personal obligation deed or Melson, v. (2d) 63; 66; 20 W. S. [McFarland Irwin, Goodsill, State Insurance App. 90, 94; Co. Mo. Walker v. App. 631, to,’ It is ‘subject said: "The used in words 634.] ordinary sense, mean,
their to,’ to,’ ‘subordinate ‘subservient by.’ nothing to,’ ‘limited ‘subject There is in the use of the wоrds ordinary use, in their which hint would even at the creation of affirm- rights.” ative Mintz, [Englestein 345 Ill. N. E. However, this contention construing overlooks the that we are fact contract "applies which of the rein- sured” and necessarily assumption that such a contract implies the personal obligation reinsurer, the extent of which is to be ordinary determined in the usual and manner consideration of the instrument itself and the words used therein and the references made. obligation The reinsurance contract creates "subject the words to.” contentions made in the Other sufficiently opinion original brief are covered in the or above. rehearing CG., Hyde motion for Bradley, overruled.
concur.
PER foregoing CURIAM: The opinion by DaltoN, C., is adopted opinion of the court. All judges concur. *19 at the State of Missouri relation Equitable Life Assurance Society States, Relator, Perry a Corporation, United Allen, T. J. Smith and James F. Robert Fulbright, Judges of Springfield Fogle Harry Court of Appeals, J. Carl A. (2d) Hall. 136 S. W. 309. One, January 23,
Division 1940.