United States Fidelity & Guaranty Co. v. Hearn

The bill was by the surety company and sought to be maintained under the recent Declaratory Judgment Act. Gen.Acts 1935, pp. 777-779.

The bill as amended was challenged by demurrer, and the application for temporary injunction was heard on affidavits and oral testimony. The decree denied injunctive aid to prevent the hearing of suits at law; demurrer was sustained, and the bill was dismissed.

An object of the amended bill was to obtain an adjudication of appellant's liability to defend the several pending suits against McCoy Hearn, as owner and driver of an automobile, for personal injuries, by collision, to guests or passengers for hire who were with him in the car. The bill further sought adjudication of appellant's liability under its group policy of insurance (exhibited) issued to the Birmingham News Company by whom Hearn was employed.

The statute, among other things, contained the following:

"All persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding. * * *

"This act is declared to be remedial; its purpose is to settle and to afford relief from uncertainty and insecurity with respects to rights, status, and other legal relations; and is to be liberally construed and administered. * * *

"This act shall be so interpreted and construed as to effectuate its general purpose to make, uniform the law of those states which enact it, and to harmonize as far as possible, with federal laws and regulations on the subject of declaratory judgments and decrees." Gen.Acts 1935, p. 779, §§ 11, 12 and 15.

This act was recently construed in Jefferson County v. Johnson, 232 Ala. 406, 168 So. 450.

The general authorities are to the effect that an action may be brought by a liability insurer, under the declaratory judgment statute, against the insured and other parties who are suing the insured to recover for personal injuries or death, to have the court declare the liability vel non of the liability insurer to defend said pending suits. American Motorists' Ins. Co. v. Central Garage, 86 N.H. 362, 169 A. 121; Post et al. v. Metropolitan Casualty Ins. Co., 227 A.D. 156,237 N.Y.S. 64; Sauriolle, Adm'r v. O'Gorman, etc., 86 N.H. 39, 163 A. 717,723; Malley v. American Indemnity Corporation, 297 Pa. 216, 146 A. 571, 81 A.L.R. 1322; Utica Mut. Ins. Co. v. Glennie et al., 132 Misc. 899, 230 N.Y.S. 673; Ohio Casualty Ins. Co. v. Plummer (D.C.Tex.) 13 F. Supp. 169; Borchard on Declaratory Judgments, pp. 492-497.

The question whether appellant was or was not bound to defend the suit is an important preliminary determination, and held to fall within the beneficent provisions of such a statute. Sauriolle, Adm'r, v. O'Gorman, etc.; American Motorists' Ins. Co. v. Central Garage, supra. The applicable policy provision is: "To defend in his name and behalf any suit against the Assured seeking damages on account of such Bodily Injury or Property Damage, even if such suit is groundless, false or fraudulent."

We are of the opinion, and so hold, that the bill as amended presented a justiciable question, as defined by this court in Jefferson County v. Johnson, supra; an actual existing controversy within the jurisdiction of the court, between the parties to such controversy and within the meaning of our act approved September 7, 1935. Gen.Acts 1935, pp. 777-779; Borchard on Declaratory Judgments (1934) p. 35; Sullivan Sons Mfg. Co. et al. v. Ideal Building Loan Ass'n, 313 Pa. 407,170 A. 263, 98 A.L.R. 1.

It is not necessary, at this time, that we make other pronouncements than that the temporary injunction should have been granted to preserve the status quo. Such order will be made on a renewed application to the trial court.

The decree of the trial court is reversed, and the cause is remanded for a trial in this case of the facts of the respective liabilities vel non.

Reversed and remanded.

ANDERSON, C. J., and GARDNER, BOULDIN, BROWN, and FOSTER, JJ., concur.

KNIGHT, J., dissents.

On Rehearing.