89 Pa. Super. 281 | Pa. Super. Ct. | 1926
Argued October 7, 1926. This was an action of assumpsit on a policy of automobile casualty insurance. The learned court below directed a verdict for the plaintiff. The assignments of error complain of the refusal of the court to direct a verdict for the defendant or enter judgment in its favor non obstante veredicto.
The appellant contends that it was entitled to binding instructions on two grounds: (1) Because, contrary to the statement in the plaintiff's application for insurance, the automobile causing the injury was used for "commercial delivery"; and (2) because the plaintiff settled the claim of the injured person before suit brought or final judgment obtained.
(1) In the application for this insurance plaintiff stated, (Item 3), that the purposes for which the described automobile — a Ford Sedan — was to be used were, "private pleasure and business calls, excluding commercial delivery." The policy indemnified the assured, inter alia, against loss from the liability imposed by law upon it for damage on account of bodily injuries sustained by any person by reason of the ownership of the automobile described in the "Declarations" *284
forming the application — declared by the policy to be warranties — and used for the purpose specified in Item 3 thereof. Plaintiff was in the paint and glazing business. It had some men working at a new school building in Tacony and a box of glass was needed on the job. The truck driver was not working that day and the vice president took the box in the Ford Sedan and while on the way injured a man named Schoales, who made claim for damages. Plaintiff at once notified defendant of the claim and informed it of the circumstances attending the injury; and defendant denied in writing all liability under the policy for the damages claimed, on the ground that the policy contract excluded commercial delivery; and later wrote again that its position was final. The learned court below ruled that the clause related to the regular or frequent use of the automobile for commercial delivery and not to a temporary or incidental use such as this was; citing Firemen's Ins. Co. v. Rye,
(2) After appellant denied all liability under the policy in suit, plaintiff on the advice of its attorney, settled Schoales's claim for damages for $1000, and brought this action. The insurance company was not absolutely bound by the settlement; it could have defended on the ground that Schoales had no enforceable claim against the plaintiff, or that the amount paid him was excessive: Mayor, Lane Co. v. Commercial Cas. Ins. Co.,
"(C) ...... The Assured shall not voluntarily assume any liability, settle any claim or incur any expense, except at his own cost, or interfere in any negotiations for settlement or legal proceeding without the consent of the Company previously given in writing.
(D) No action shall lie against the Company to recover upon any claim or for any loss under this Policy unless brought after the amount of such claim or loss shall have been fixed and rendered certain, either by final judgment against the Assured after *286 trial of the issue or by agreement between the parties with the written consent of the Company."
But both of these conditions are predicated on the willingness of the insurance company to perform its prior agreement: "To defend in the name and on behalf of the Assured any suits which may at any time be brought against him on account of such injuries"; and when the company unequivocally repudiated all liability under the policy, it was in no position to insist that the insured must do nothing until an action was brought against it and then press the case to final judgment, instead of making a settlement of the loss advantageous to both insurer and insured. The insurance company's initial repudiation of the contract in denying liability under the policy relieved the insured of strict performance of those provisions intended for the protection of the insurer only if it recognized the liability and assumed charge of the matters relating to the claim. In St. Louis Dressed Beef Co. v. Maryland Casualty Co.,
To the same effect, see Butler Bros. v. American Fidelity Co.,
We are of opinion that the court below committed no error in refusing to give binding instructions for the defendant or enter judgment non obstante veredicto in its favor.
On a review of the whole record, however, we are obliged to reduce the judgment by the amount incurred for legal expenses, $250. This amount was not paid or incurred in connection with the defense or *288
settlement of Schoales's claim against the insured; if it had been it might have been a proper item of expense, recoverable against the defendant under the terms of this policy. See Brassil v. Maryland Casualty Co., 133 N.Y. Supp. 187 [affirmed,
The Act of April 22, 1905, P.L. 286, directs this court, on an appeal from a judgment following a rule for judgment non obstante veredicto to "enter such judgment as shall be warranted by the evidence taken in [the lower] court." As the evidence does not warrant the recovery of the legal expenses claimed in this action, we accordingly modify the judgment by reducing it to $1100, (as of date of December 15, 1925), and as so modified the judgment is affirmed.