Holmes v. Hughes

On February 27, 1930, judgment was entered in the above action in favor of plaintiff and against the defendant for $2,500 and costs. The action was one for personal injuries caused by the negligent operation of an automobile by the defendant. The latter was insured against loss or damage due to such .negligence by a policy of liability insurance issued by the Home Accident Insur

The evidence shows that the insurer employed attorneys and carried on the defense without interference by defendant. Upon the entry of the judgment an appeal was taken therefrom by the insurer, acting through its attorneys, and a bond was filed for the purpose of staying execution pending the appeal. This bond was procured by the insurer from the Indemnity Insurance Company of North America, which at the insurer’s request became sole surety thereon. Thereafter the insurer became insolvent and the appeal was dismissed, whereupon a remittitur issued and was filed in the superior court. The judgment passed by assignment to J. C. Hughes, who, on June 17, 1931, filed in the superior court a written application for entry of judgment against the Indemnity Company as surety upon the bond. The application was granted, resulting in a judgment under section 942 of the Code of Civil Procedure against said company for $2,639.04, with costs and interest, which it paid.

Following such payment the Indemnity Company, pursuant to section 1059 of the Code of Civil Procedure, requested the clerk of the superior court to issue execution against the defendant for the amount paid. The writ issued and was levied upon property standing in defendant’s name. Thereupon he moved the court for an order directing entry of satisfaction of judgment as against himself and recalling the execution. This motion was upon the ground that the Indemnity Company did not by executing the said bond on

While the policy contained the provision that the assured, if requested by the company, should aid in the prosecution of appeals, by no reasonable construction did this provision require defendant to furnish a bond to stay the execution of a judgment pending an appeal, or to place himself in a position where he would be subject to a claim of the character made in this proceeding; and it has been held to be the duty of an insurer, in case it elects to appeal, to furnish the bond. (Pacific Coast Casualty Co. v. General Bonding & Casualty Co., 240 Fed. 36 .) It has also been held that an insurance company, in exercising its right to defend an action brought against the assured, is not the latter's agent, but rather in the position of an independent contractor. (Attleboro Mfg. Co. v. Frankfort etc. Ins. Co., 240 Fed. 573 ; Bell v. Greenwood, 229 App. Div. 550 [ 242 N. Y. Supp. 149 ].)

The Indemnity Company contends, however, that having paid the judgment it became substituted to the rights of the judgment creditor under said section 1059, which provides that any surety on an undertaking on appeal executed to stay proceedings on a money judgment, who pays the

A surety is one who at the request of another, and for the purpose of securing him a benefit, becomes responsible for the performance by the latter of some act in favor of a third person, or hypothecates property as security therefor (Civ. Code, see. 2831); and it is the general rule that in order to recover he must show that he became such at the express or implied request of the principal; otherwise, he will be deemed a mere volunteer, and cannot thus make himself a creditor of him whose debt he pays. (Spencer, Suretyship, sec. 118; 50 Cor. Jur., Principal and Surety, sec. 404, p. 249; Mitchell v. Chambers, 43 Mich. 150 [ 38 Am. Rep. 167 , 5 N. W. 57 ]; White v. White, 30 Vt. 338 ; Ricketson v. Giles, 91 Ill. 154 ; McPherson v. Meek, 30 Mo. 345 ; McCabe v. Montgomery, 131 Ark. 523 [ 199 S. W. 548 ]; Anderson v. Hendrickson, 1 Neb. (Unof.) 610 [ 95 N. W. 844 ].) Here there was no request by defendant, and as between him and the companies he received no benefit from the filing of the bond, nor was it the intention of the Indemnity Company that he should, the sole beneficiary as understood by both companies being the insurer. Under such circumstances, as held in McCabe v. Montgomery, supra, so far as the companies were concerned, the bond was not for defendant’s benefit, and as to him the Indemnity Company was a volunteer. While subrogation is founded upon principles of justice, and may be decreed so as to secure such without regard to form, a person claiming the benefit of the doctrine must establish a superior equity, which appellant has failed to do, and it will not be permitted to work an injustice. (23 Cal. Jur., Subrogation, 917; Bell v. Greenwood, supra.) 'The 'facts of the case last cited closely resemble those in the case at bar; and it was there held that a surety on an appeal bond obtained by an insurer was not entitled after payment of the judgment to recover against the principal defendant on the theory of subrogation, citing City Trust etc. Surety Co. v. Haaslocher, 101 App. Div. 415 [ 91 N. Y. Supp. 1022 ), which declares that after judgment the insurer is as between it and the judgment debtor to be regarded as- the principal debtor, and that an appeal bond

The orders appealed from are affirmed.

A petition for a rehearing of this cause was denied by the District Court of Appeal on September 3, 1932, and an application by appellant to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on October 3, 1932.