Hill v. Maryland Casualty Co.

SHAW, J.

Action to recover from defendant upon a policy of employers’ liability insurance. Plaintiff and one Anton Swensen were partners engaged in the construction of what was known as the Third street tunnel in the city of Los Angeles. While so engaged defendant issued to the copartnership a policy of employers’ liability insurance, whereby it agreed to indemnify the copartnership against liability for damages sustained by its employees on account of injury received by such employees while engaged in the prosecution of the work, the same to be paid when claim for damages so received was reduced to judgment and the judgment satisfied. On January, 21, 1900, while the policy was in full force and effect, one Powley, an employee of the copartnership, was killed. His heirs instituted suit for damages, obtained judgment in the trial court, which on appeal was affirmed and thereafter duly satisfied by plaintiff.

On March 1, 1901, prior to the rendition of the judgment in the trial court, Hill and Swensen dissolved partnership, adjusting all of their partnership liabilities and assets, save and except as to the claim for-damages in the Powley suit and the policy of insurance held by them as indemnity for such liability. At the same time they agreed that the policy of insurance should be held for their protection against any judgment which might be rendered in the Powley suit, and to that end it should be deposited in the hands of a third person to hold pending the final termination of such action. Such agreed deposit, however, was not made, but the policy was retained in the possession of Swensen, who, on March 31, 1902, in consideration of $3,300 then paid to him by defendant, and while the Powley suit was pending on appeal, and without the consent or knowledge of Hill, delivered the policy to defendant, together with a full release thereof to which he had affixed the partnership name of Hill & Swensen. Swensen immediately left for Mexico, where he died on June 16, 1903. Plaintiff did not learn of the transaction between defendant and Swensen until after the latter’s death, and did not receive any part of the proceeds of the settlement. The action was to recover the

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amount of the judgment rendered against Hill & Swensen in favor of the heirs of Powley. The court gave judgment for defendant; plaintiff moved for a new trial, which was denied, and the appeal is from the order denying the same.