Schoefer v. Farmers Automobile Inter-Insurance Exchange

PULLEN, P. J.

This appeal arose out of an accident wherein an automobile owned by Wayne Smythe, and being driven with his permission by Eugene P. Hughes, struck and injured Ralph H. Field.

Field commenced an action against both Smythe and Hughes, and recovered judgment against each defendant. Thereafter the judgment against Smythe was vacated upon the ground that he was a minor and no guardian

ad litem

had been appointed for him. Execution was issued against

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Hughes, and the judgment was paid by a third party, and repayment to such third party guaranteed by security pledged by Hughes. Fields thereupon assigned the judgment against Hughes to Schoefer, plaintiff and appellant herein, acting for the third party above referred to, who brought the present action against Farmers Automobile Inter-Insurance Exchange, respondent herein, the insurance carrier for Smythe.

This action was brought by appellant on the theory that the insurance carried by Smythe covered the liability of Hughes to Field and also contended that the Insurance Exchange, having taken control of the defense of Hughes in the action brought by Field against Smythe and Hughes is now estopped to deny that the policy covered and enured to the benefit of Hughes.

The liability of respondent is fixed and defined by the terms of an indemnity contract entered into between Smythe and respondent herein, wherein the Exchange insures Smythe against legal liability imposed upon him resulting solely and directly from an accident by reason of the ownership, maintenance or use of the automobile described in the policy, for bodily injury suffered by any person. The policy contains a provision that the Exchange shall not be liable for loss or damage caused while the automobile is being operated by any person other than the insured, or a member of his immediate family, or paid driver, unless said person is operating said automobile with the consent of the insured, except that this extension shall not be applicable to any public garage, repair shop, sales agency or service station.

Appellant contends that when the automobile was being operated by one otherwise qualified, with the consent of the insured, the Exchange was liable. Appellant devotes considerable space to a discussion of the meaning of this provision of the policy but we do not believe it necessary to go into that phase of the matter in view of the fact that until a judgment is shown to exist against Smythe, the owner of the ear, the Exchange cannot be held liable. It is clear from the policy that it insures only against legal liability imposed upon the owner Smythe, and unless there is some legal liability against the owner there is no liability under the policy.