Maryland Motor Car Ins. Co. v. Haggard.

Claiming that the evidence established a breach by defendant in error, as pleaded, of the stipulation in the policy relating to subrogation, the plaintiff in error requested that a peremptory instruction in its favor be given the jury. The court refused the request, and error, by proper assignments, is predicated thereon. It is quite a well-settled rule that if an insured settles with or releases a wrongdoer from liability for a loss before payment of the loss has been made by the insurance company, the insurance company's right of subrogation against the wrongdoer is thereby destroyed. Bloomingdale v. Ins, Co. (Sup.) 84 N.Y.S. 572; Ins. Co. v. Trust Co., 123 Pa. 523, 16 A. 79, 2 L.R.A. 586,10 Am. St. Rep. 546; Sims v. Ins. Co., 101 Wis. 586, 77 N.W. 908; Ins. Co. v. Ry. Co., 63 Tex. 475, 51 Am.Rep. 661; Ins. Co. v. Easton, 73 Tex. 167, 11 S.W. 180,3 L.R.A. 424. And if the settlement made by defendant in error with the city of Ft. Worth had the legal effect to destroy the plaintiff in error's remedy of subrogation under the policy, then defendant in error thereby discharged the plaintiff in error from its obligation to pay him to the full extent to which he has defeated the plaintiff in error's remedy of subrogation. Packham v. Ins. Co., 91 Md. 515, 46 A. 1066,50 L.R.A. 828, 80 Am. St. Rep. 461. It appears admittedly that defendant in error filed a claim for specific items of damage occasioned by the tort of the city on January 1, 1913, and that the city denied legal liability for any damages by reason of the injury to the automobile, and that thereupon the city and defendant in error settled the controversy for $100 paid and received. In the settlement it does not appear from the evidence that any claim in favor of the insurance company was reserved or excluded, or that the settlement was not intended to operate as a full release to the city of all damages. In point of fact, the settlement as made does not appear to have been only a partial settlement; nor does it appear that the written release speaks a mistake of the intention of the parties to effectuate a complete settlement. The legal effect of the settlement is, we think, to give a full and complete release to the city of Ft. Worth. The tort by the city was single, causing sundry items of loss, and gave rise to one liability, and the whole cause of action was therefore merged in the one settlement.

Defendant in error in his replication asserted waiver by plaintiff in error of the right to subrogation. There is no evidence to show that plaintiff in error agreed to waive the assignment, nor any sufficient evidence on which to base estoppel. Very shortly after the injury, it appears, defendant in error offered to make the assignment to an attorney, for plaintiff in error, who refused to take it at the time for want of full authority to act for plaintiff in error, and because reasonable time had not elapsed to make investigation of the injury. Immediately afterwards defendant in error filed the claim with the city and settled. Defendant in error by his contract bound himself to make the assignment of his cause of action upon payment by plaintiff in error of the loss. The time when the payment is to be made is not specified. A reasonable time, though, by law would be given the plaintiff in error to make the payment of loss and call upon defendant in error to make the assignment of his cause of action against the city. And it would become the duty of defendant in error, in order to perform his part of the agreement, to continue in a position to make it legally possible for him to make a legally effective assignment when called upon to do so within a reasonable time by plaintiff in error. Plaintiff in error, therefore, had the right to use a reasonable time from the date of the injury to investigate the accident and loss, and make payment and call for the assignment to it. And refusal of the attorney to take the assignment at the time merely for the reasons given would not operate to estop plaintiff in error. Failing, as defendant in error did, to comply with his contract in the respect in question, and there being no waiver or estoppel on plaintiff in error's part, the court should, as a matter of law, have directed a verdict for plaintiff in error.

The judgment is reversed and here rendered in favor of plaintiff in error, with costs of the trial court and of this appeal.