Skaggs v. Gotham Mining & Milling Co. , 208 Mo. App. 596 ( 1921 )

The plaintiff, Kenneth Skaggs, while in the employ of the Gotham Mining and Milling Company was injured. He brought suit for resultant damages and recovered damages for $5000. On appeal to this court that judgment was affirmed. The Ocean Accident Guarantee Company had insured the mining and milling company by what is generally known as an employers' liability policy. The insurance company defended the damage suit against the mining and milling company by plaintiff and appealed that case without bond. When the judgment was affirmed and became final, the plaintiff, Skaggs, had execution issued on his judgment against the mining and milling company and summoned the insurance company as garnishee. The insurance company answered denying any indebtedness from it to the mining and milling company, the judgment debtor. Plaintiff denied the answers of the garnishee. A demurrer to this answer was sustained and plaintiff refusing to plead further, judgment went in favor of the garnishee and plaintiff appealed to the Supreme Court alleging that a constitutional question was involved but the Supreme Court held otherwise and transferred the case to this court.

There is but one question involved here and that is whether under the policy a right of action accrued to the insured before the payment of the judgment against it. Appellant frankly concedes that if we are to follow the former holdings of the Courts of Appeal in this State, the decision must be against him. This policy has the usual "No Action Clause" which provides that no action shall lie against the insurance company until the insured has paid the judgment against it and this clause has been uniformly upheld by the Courts of Appeal in this State and by the great weight of authority elsewhere and we see no reason to change our holding on that question. [Most v. Mass. Bonding Company, et al., 196 S.W. 1064; Dunham v. Philadelphia Casualty Co., 179 Mo. App. 558, 565, 162 S.W. 728.]

We fully appreciate the force of the criticism of appellant levelled against the practical effect of this form of contract in which he states that it merely means that if the insured is solvent so that a judgment for damages covered by the policy can be collected, the insurance company will pay, but if the insured is insolvent so the judgment against it cannot be collected, the insurance company will not pay. The remedy for that injustice, and we agree that it is a gross injustice, must come, if at all, through the Legislature or by the forethought of the insured who will see before he accepts the policy that it is in fact a liability policy as distinguished from an indemnity policy. As long as the law permits the indemnity policy against loss only and the insured will accept it, the courts are powerless to change it. The courts can only embrace contracts as they are made and cannot remake them. Judgment affirmed. Farrington, J., andBradley, J., concur.