Aрpellant contends that the trial court erred in overruling its motion to dismiss an amended complaint filed against it by each of the appellees and granting the motions of appellees for a summary judgment.
Appellees, Floyd and Ethel Brаdshaw, brought separate suits against appellant, MFA Mutual Insurance Company, on March 14, 1967 seeking recovery on judgments each had recovered against one Brenda Howard, an uninsured motorist. These judgments were for damages resulting from аn automobile collision between a vehicle owned and operated by Floyd Bradshaw, in which Ethel Bradshaw was a passenger, and a vehicle operated by this uninsured motorist on September 17, 1966. The suits were consolidated for trial. Appellant was appellees’ liability insurance carrier. The liability policy provided uninsured motorist coverage. Each appellee was an “insured” under the policy terms. The coverage was set out as follows:
“* * * The Company will pay all sums which the insured . . . shall be legally entitled to recover as damages from the owner or operator of an uninsured highway vehicle because of bodily injury sustained by the insured, caused by accident and arising out of the ownership, maintеnance or use of such uninsured highway vehicle; * *
Appellees instituted suit against appellant and Brenda Howard on October 11, 1966. Brenda Howard employed counsel and filed an answer and counterclaim. MFA filed a motion asking dismissal of the complaint as to it on the ground that appellees had improperly joined an action in tort against Brenda Howard and an action in contract against MFA. The trial court required appellees to elect which remedy they wоuld pursue. 1 They took a voluntary nonsuit against MFA and elected to proceed against Howard on February 17, 1967. On February 20, 1967, appellant, by its attorney, wrote a letter to appellees’ attorney directing attention to the following languаge in Insuring Agreement V:
“No judgment against any pei.sun or organization alleged to he legally responsible for the bodily injury (sustained by the insured) shall be conclusive, as between the insured and the Company, of the issues of liability of such person or organizаtion or of the amount of damages to which the insured is legally entitled unless such judgment is entered pursuant to an action prosecuted by the insured with the written consent of the Company.”
In this letter appellees’ attorney was also advised that MFA Mutual Insurance Company did not consent, in writing or otherwise, to the prosecution of the action against Brenda Howard, and that any judgment obtained against her would not be conclusive as to the liability of Brenda Howard or the amount of damages appellees might be legally entitled to recover from MFA. No reason for the withholding of consent was stated.
On March 14, 1967 the complaint against MFA was dismissed without prejudice pursuant to the nonsuit indicated previously. On the following day, whеn the case against Brenda Howard was called for trial, neither she nor her attorney appeared, and the default judgment sued on here was entered in favor of both Bradshaws on their complaint and against Brenda Howard on her сounterclaim. No explanation of the reason for her failure to appear has been given. MFA filed a motion to dismiss the cause now before us based upon the letter mentioned above and the policy clause quoted therein, stating that it was entitled to litigate the issues of liability and damages, and alleging that the default judgments . were not binding on it. The trial court treated the motion to dismiss as a demurrer and gave appellees time within which to amend their respective complaints. Both amended to add an allegation that MFA had refused to settle with them and refused to defend the suit against Brenda Howard after having-had notice of the suit and after having been notified of the trial date, and that the doctrine of res judicata applied. MFA again moved for dismissal, reiterating the statements of its original motions, and alleging that it could not have defended the action against Brenda Howard, that res judicata was inapplicable because оf a lack of identity of parties, and that the sole remedy of the Bradshaws was by an action against MFA in which the issues of the liability of Brenda Howard and the amount of damages would be litigated. This motion was denied. The Bradshaws then filed a motion for summary judgment based upon the pleadings and a stipulation of the facts herein above stated. This motion was granted and this appeal taken.
The sole question on this appeal is that of the validity of the paragraph providing that no judgment in an action prosecuted by the insured against an uninsured motorist without the written consent of the insurer shall be conclusive as between the insured and the insurer. The meaning and intent of this provision is clear and unmistakable. It is designed to protect thе insurer in cases such as this where, even though there was every reason to believe that the questions of liability and damages would be litigated thoroughly, the uninsured motorist defaulted. As a result, the question of liability has not actually been litigated. "We agree with the Supreme Court of Missouri that defaulting defendants are not represented because a trial court cannot and should not act as an attorney for defaulting defendants and produce witnesses who might contradict the testimony оf a plaintiff and witnesses produced by him. State v. Craig,
An insurer may contract with its insured upon conditions expressed in its policy, limited only by statute and public policy. The insured, by acceptance of a policy, is deemed to have approved it with all conditions and limitations expressed therein which are reasonable and not contrary to public policy. Maryland Casualty Co. v. Chew,
Certain clauses have been voided as contrary to public policy. Ark. Stat. Ann. § 66-3233 (Repl. 1966) declares that a clause compelling an insured to submit any question of fact to arbitration is void. We agree with the United States District Court for the Eastern District of Arkansas that a clause providing forfeiture of insurance coverаge by an insured who prosecuted to judgment a suit against an uninsured motorist without written consent of the insurer is against public policy of the state. MFA Mutual Ins. Co. v. Lovins,
In many of the decisions cited in this opinion there is a holding that an insurer having notice of оr an opportunity to participate in an action against an uninsured motorist is, or may be, bound by the judgment rendered in favor of its insured, but none of them involve a contract containing a clause stipulating against such a binding effect but not impоsing forfeiture of coverage. We are not aware of any decision in which the insurer’s liability on such a judgment is based on the doctrine of res judicata. Most seem to be based jn some kind of estoppel. There is no statute prohibiting this clаuse in a motor vehicle liability insurance policy. In at least one court it has been recognized that a judgment against an uninsured motorist may not be binding on the insurer where there is a policy clause like this one. Andeen v. Country Mutual Ins. Co.,
We agree with the Oklahoma Supremе Court that a situation where the interest of an insurer is to defeat the claim of its own insured should not be countenanced where it can be avoided. Holt v. Bell,
Our statute provides that the insurer be subrogated to the rights of its insured against the uninsured motorist. Ark. Stat. Ann. §66-4006 (Repl. 1966). It has been recognized that this right could be materially impaired unless the insurer had some option about the conduct of an action against the uninsured motorist. Mills v. Farmers Insurance Exchange,
The clause in question does not prohibit an insured from prosecuting an action against the uninsured motorist, so it cannot be said that it hampers an insured in seеking to recover damages in excess of his policy limits from a solvent uninsured motorist.
Inferentially, it is suggested that appellant withheld its consent arbitrarily. While there well may be an implied promise on the part of the insurer that its consent not be withhеld arbitrarily (see Levy v. American Automobile Inc. Co.,
We find the “cоnsent” clause in this policy to be valid and binding. The summary judgment is reversed and the cause remanded for proceedings consistent with this opinion.
Notes
This occurred before the effective date of Act 73 of 1967 permitting joinder of an action in tort with an action in contract.