138 Minn. 304 | Minn. | 1917
In July, 1913, plaintiff carried a liability policy in defendant company. Georgia Arabella Johnson, an employee of plaintiff, was injured in the course of her employment and sued plaintiff for damages.
The summons and complaint were turned over to defendant for attention. Defendant assumed the defense of the action and employed attorneys to that end. Its attorneys answered, interviewed witnesses, and made the usual investigation incident to a lawsuit. As the time approached for .trial, two of defendant’s representatives called on plaintiff’s secretary for the purpose of further preparing the case for trial. A dispute arose; defendant accused plaintiff of refusing to co-operate with defendant in defending the action, and in fact accused plaintiff of assisting the employee in the prosecution of her ease, and thereupon defendant, assigning such want of co-operation, withdrew from the defense of the case and notified plaintiff in writing to that effect. Plaintiff em? ployed other attorneys 'and the ease was tried. The employee recovered a verdict and a judgment in the sum of $963.87. Defendant refused to pay the judgment. By that time, plaintiff had become insolvent and had transferred all its assets to its principal creditor, and this creditor'agreed to pay plaintiff’s debts, not including this claim. No other debt or claim was outstanding. There was no recourse for the collection of this judgment from plaintiff, except by resort to stockholders’ liability. It was' then agreed between the judgment creditor and plaintiff that plaintiff would give its promissory note to Miss Johnson for the amount of her judgment, and that she would satisfy the judgment. It was further agreed that she should have' the benefit of any recovery which plaintiff might have against the defendant under its bond.' Thereupon the note was given, the judgment satisfied and this action brought on the bond. This case was submitted to a jury and a verdict was rendered for plaintiff.
The policy was in the usual form. It required defendant to defend any suit brought against plaintiff to enforce a claim covered by the bond
If the judgment is, as to the employee, a debt due from the insurer to the insured, not dependent on any contingency, as held in the Adan case, clearly it was a debt which the insured might recover in an action for the benefit of the employee. The Adan case has been followed in other cases in this state and the same rule has been followed in some other states. Elliott v. Aetna Life Ins. Co. 100 Neb. 833, 161 N. W. 579, L.R.A. 1917C, 1061; Davies v. Maryland Casualty Co. 89 Wash.
A majority of the court are of the opinion that this ruling was right. The bond provides that no action shall be brought against the insurance company for expenses incurred by the assured in the defense of a suit for damages brought by an employee, unless the assured has actually made payment of such expenses. This is interwoven into the same section as the provision for similar payment of the judgment. Another section of the bond obligated the insurance company to pay “all expenses * * * incurred by the company (defendant) in defending any suit.” When the company assumed control of the case it made all,
Order affirmed.