Treloar v. Keil & Hannon , 36 Cal. App. 159 ( 1918 )

Respondent in his petition for a rehearing claims that the court has construed the contract of indemnity in favor of the insurer rather than the insured, whereas it is the latter that should be favored. We are aware of the rule that justly requires the courts to resolve doubtful and obscure provisions so as to give the fullest protection possible to the interests of the insured, and we are in accord with that policy, but it seems to us that to support the position of respondent in this case would require us to do violence to the plain terms of the contract which the parties have deliberately chosen.

Petitioner, with some degree of acerbity, complains because we failed to notice specifically some of the cases cited by respondent, especially Rodgers v. Pacific Coast Casualty Co.,33 Cal.App. 70, [164 P. 1115]. Of course, there must be some limit to an opinion, and it is not generally supposed that the appellate courts in that respect usually err upon the side of brevity. The cases cited by respondent, though, were examined, and we thought our reference to them was sufficient for the purpose of the case in expressing our views as to the merits of the controversy.

As to the Rodgers case, we may add that in the opinion of the second district court of appeal, written by Mr. Justice James, for whose judgment we have the highest opinion, the language of a policy similar to the one before us was construed in harmony with respondent's contention herein, but it is to be noted that the affirmance of the judgment of the lower court was also grounded upon the other position that there had been a payment of the judgment by the indemnitee; and, in denying the petition for a hearing therein, the supreme court limited its concurrence to that view, saying that the opinion of the district court "also proceeds upon the theory that the payment by Irwin (indemnitee) of the judgment against her in favor of the injured party is a condition precedent to the existence ofa cause of action in favor of Irwin against the company as indeed the policy expressly declares; but that such previous payment need not be made in money, but may be made in property of any kind, including the promissory note of Irwin if such note is accepted expressly as payment; a theory in which we concur." (Italics ours.)

The foregoing language seems very clear, and it can leave no doubt as to how the highest court of this state regarded a similar policy. It is expressly declared that a payment of the judgment by the indemnitee was a condition precedent to the existence of a cause of action against the insurance company. It may be that we have misunderstood the significance of the terms employed by the supreme court, but, if it be so, we are fearful that we are without satisfactory excuse.

There is some criticism of the declaration of this court as to the incompetency of the legislature to change the terms of the contract of the parties. Probably, the proposition was not expressed as clearly as it should have been. Of course, we assumed that the contract was legal, and what we intended to say was, that, where parties have entered into a lawful contract and have clearly expressed their intention, it does not lie with the legislature to provide a different contract for them.

We would be glad to afford relief to the plaintiff if we could so construe the policy, but we find ourselves unable to do so.

The petition for rehearing is denied.

Chipman, P. J., and Hart, J., concurred.