Title: Jackman v. JONES

State: oregon

Issuer: Oregon Supreme Court

Document:

Affirmed June 3, 1953.
*565 David M. Spiegel argued the cause for appellant. On the briefs were Lenske, Spiegel, Spiegel, Martindale & Bloom, of Portland.
David Fain argued the cause for respondents. On the brief were Black, Kendall & Fain and H. Stewart Tremaine, of Portland.
Before LATOURETTE, Chief Justice, and LUSK, BRAND and PERRY, Justices.
AFFIRMED.
LUSK, J.
Plaintiff has appealed from an adverse judgment in an action in tort to recover damages for injury to his truck and for loss of its use.
Trial was before the court on a stipulation of facts. The sole assignment of error is directed to the overruling of plaintiff's objections to the findings of fact and conclusion of law made by the court and the court's refusal to adopt other and different findings of fact and conclusions of law proposed by the plaintiff. The question thus raised is whether or not the plaintiff, by assigning a judgment which it obtained against one of the defendants, released its claim against the other two, the respondents here, all three being sued as joint tort-feasors. The court below held that such assignment had that effect, and entered judgment accordingly.
The facts are as follows: The plaintiff commenced his action by a complaint in which he sought a judgment *566 for damages to property and for personal injury against the defendants, Jones, K.F. Jacobson & Co. (hereinafter called Jacobson), and Taggart. Jones is not a party to this appeal. Jacobson and Taggart, who will be referred to as defendants, were engaged as joint adventurers in the construction of a state highway in Harney County. Jackman, the plaintiff, was in their employ hauling gravel for them in his own truck. Jones owned a truck, which, at the time of the accident out of which the controversy arises, was being driven by Charles Rex Heinicke, who was also in the employ of the defendants. The complaint charged that a collision between plaintiff's truck and that of Jones was caused by the negligent operation of Jones' truck by Heinicke, concurrently with the negligence of Jacobson and Taggart in failing to water the road on which the work was being done, as a result of which clouds of dust arose and obscured the vision of persons driving on the road.
Defendants and the Attorney General filed a "Supplemental Answer" under the statute § 102-1780, OCLA, alleging that plaintiff was an employee of the defendants, that both plaintiff and defendants were under the Workmen's Compensation Law, and that plaintiff's sole remedy for his personal injury was under the Workmen's Compensation Law. After a trial of that issue judgment was entered thereon in favor of the defendants, thus barring plaintiff's claim for damages for personal injury against them. Plaintiff thereafter amended his complaint so as to eliminate all references to the negligence of Jones, and charged the defendants with negligence in the operation of Jones' truck, causing $2,000.00 damage to the plaintiff's truck and $2,000.00 damage for loss of its use. The claim for personal injury against defendants was abandoned in the amended complaint.
*567 In the meantime, however, Jones had defaulted and plaintiff had taken a judgment against him for $5,000.00 for personal injury, $1,765.25 general damages for injury to his truck, and $1,000.00 special damages for loss of use of his truck.
The case against the defendants came on for trial on the amended complaint. The facts above recited were stipulated, together with additional facts now to be stated. In effect, it was stipulated that plaintiff was an employee of the defendants in the road construction work in which they were engaged; that the other truck involved in the accident was owned by Jones and was being driven by Heinicke, an employee of defendants; and that the accident occurred while the drivers of both trucks were engaged in this common employment. Facts as to the manner of happening of the accident were stipulated from which an inference could be drawn that it was caused by the negligence of Heinicke in the operation of the Jones truck. It was further stipulated that after the default judgment was entered against Jones
The P.U.C. endorsement, attached to the public liability policy of insurance issued by Standard Accident Insurance Company in favor of Jones and referred to in the stipulation, contains the following provisions respecting the liability of the company for the payment of any final judgment recovered against the insured for loss of or damage to property of others:
The endorsement further provides:
The assignment of judgment is of record and includes an attempted reservation of plaintiff's rights against the defendants in this language:
LUSK, J.
While other contentions have been presented in argument, the only question which we find it necessary to decide is whether the plaintiff, as the result of his assignment to Standard Accident Insurance Company of the judgment recovered by him against Jones, lost his right to proceed against Jacobson and Taggart in his action for damage to his truck and for loss of its *570 use. The precise question is whether the legal effect of that transaction is an extinguishment of the judgment and so a release of Jones, a joint tort-feasor with the defendants.
1, 2. The rule that the release of one of two or more joint tort-feasors releases all prevails in this state. Hicklin v. Anders (decided February 18, 1953) 253 P2d 897; Stires v. Sherwood, 75 Or 108, 145 P 645. An assignment of a judgment to a judgment debtor or to a stranger for his benefit extinguishes the judgment, as the two antagonistic rights of creditor and debtor are thereby merged in one and the same person. Brown v. Harding, 170 NC 253, 86 SE 1010; Owings v. Graham, 120 SC 408, 113 SE 279; Harvey v. Harvey, 48 NYS2d 238, 183 Misc 475; 49 CJS 1037, Judgments, § 562; 2 Freeman on Judgments (5th ed) 2085, § 997; 30 Am Jur 892, Judgments, § 136. In 49 CJS 1026, Judgments, § 555, it is said:
Lillie v. Dennert, 232 Fed 104 (CCA 6th), decides that where one of two joint tort-feasors satisfied a judgment against both the judgment was discharged, though he induced a third person to pay the judgment for him and to take an assignment thereof. The court held that the evidence justified an inference that, though the money used to buy the judgment was the proceeds of a loan obtained from a bank in the name *571 of Lillie, the assignee of the judgment, actually the money was borrowed by Daggett, one of the judgment debtors, through the agency of Lillie, and that in substance and effect the judgment was bought by Daggett. As to this state of facts the court said:
See, also, 2 Black on Judgments, 1409, § 952.
If, in the instant case, the judgment had been assigned to Jones, the judgment debtor, it is clear under the authorities that the assignment would have operated as a release of Jones and as well of the defendants, jointly charged with him as tort-feasors. The defendants argue that Standard, Jones' insurance carrier, was in legal contemplation, with respect to this judgment, in precisely the same position as a joint tort-feasor. Plaintiffs answer that an insurance carrier is neither a joint tort-feasor with its insured nor jointly or severally liable upon a judgment obtained against the latter. They rely upon Brune v. McDonald, 158 Or 364, 75 P2d 10. That was an action for personal injuries brought under the motor vehicle "guest" statute. Pacific Indemnity Company had issued to the defendant a policy of public liability insurance and sought to intervene in the action. Its complaint in intervention charged that defendant had violated the terms of the policy by conspiring with the plaintiff to falsify the facts of the accident out of which the accident arose, and thereby "to mulct" the company in *572 damages, and asked that the cause be transferred to the equity side of the court and the policy be declared void as to that accident. We affirmed the ruling of the circuit court, which sustained a demurrer to the complaint in intervention. We held that the controversy could be completely determined without any reference to intervener's policy of insurance  that "an invalid, void policy of insurance could not in any way affect the issues tendered in plaintiff's complaint." Plaintiff relies particularly upon the following statements in the opinion:
The case has little if any bearing on the question before us. It did not involve the legal status of an insurance carrier with reference to a judgment which had already been recovered against its insured. The statements in the opinion above quoted were made in view of the allegations of the complaint in intervention, which, for the purposes of the demurrer, were taken to be true. The intervener alleged facts which, if established, would have avoided its liability to pay any judgment that the plaintiff might recover, and alleged that by reason of those facts the "policy of insurance is void as to the accident in which plaintiff was injured." If this were true, obviously "the direct legal obligation of the judgment" in Brune v. McDonald "would not cause intervener to either gain or lose anything". It is just as obvious that this could not be said *573 of the judgment against Standard in this case, for, both under the terms of its contract and the statute, § 101-145, OCLA, as amended by ch 171, Oregon Laws 1943, Standard was absolutely liable for the payment of the judgment against Jones within thirty days after its rendition. Notwithstanding any violation of the terms of the policy by Jones, the plaintiff's judgment against Jones was a fixed liability against Standard, and the company's only remedy was by action against Jones for reimbursement as provided in the endorsement on the policy.
There seems to be very little authority in the decided cases on the proposition put forward by defendants' counsel that an insurance company in a case like this occupies the same position as its insured. Perhaps, this is because the instances must be rare in which an insurance carrier, under a policy of public liability insurance and in circumstances similar to those here present, has conceived that it had anything to gain by buying a judgment against its own insured. No decision cited by counsel bears directly on the point, and our own research has discovered but two where it is discussed. One of these is Fiorentino v. Adkins, 9 NJ Misc 446, 154 A 429. In that case plaintiff recovered a judgment against Adkins and Farr & Bailey Manufacturing Company as joint tort-feasors. The Indemnity Insurance Company had insured Farr & Bailey against liability for the cause complained of. The insurance company paid plaintiff the amount of the verdict, received assignments of the judgment from both defendants, and issued execution on the assigned judgment against Adkins. Holding that the proceedings on the execution should be stayed, the court said:
The other case to which we have referred is Adams v. White Bus Line, 184 Cal 710, 195 P 389. Plaintiff obtained a judgment against White Bus Line and George P. Stiles, joint tort-feasors. White Bus Line's insurance carrier, Western Indemnity Company, paid the amount of the judgment to plaintiff, and the judgment was assigned to Powell, manager of White Bus Line. Stiles, the other defendant, applied to the court for an order directing the entry of satisfaction of the judgment on the ground that the payment by the insurance company to the plaintiff satisfied the judgment as to both defendants. White Bus Line appealed from an order directing entry of satisfaction. The judgment was affirmed. The court said:
*576 3, 4. The principle enunciated by these decisions  more particularly the Fiorentino case  that an insurance carrier stands in the shoes of its insured and that in the application of the rule which denies contribution between joint tort-feasors there is no distinction between a joint tort-feasor and "one who, by contractual undertaking, stands in his place" is, in our opinion, supported by logic and sound policy. Only two possible purposes could be served by keeping the judgment alive in the hands of the insurance company  one, to enforce contribution against a joint tort-feasor, the other to compel restitution to the carrier by its insured of payment by the former of a judgment, or a portion thereof, recovered against the insured. Neither purpose is in harmony with the policy of the law. The fact that in this case it appears by stipulation of the parties that Jones, the insured, violated the terms of the policy by failing to cooperate with the insurance company, does not alter the state of the case. Jones is not a party to the present proceeding, and has entered into no such stipulation so far as the record discloses. If it be the fact that Jones violated the terms of the policy, then Standard has a right of action against him for reimbursement of any payment made by it involving such breach, or for any payment that it would not have been obligated to make except for the agreement contained in the endorsement. But an insured, under this provision, has the right to require that an insurance company making such a claim establish it in a court of law. This right would be lost to the insured were the transaction under examination to be given judicial sanction. By the simple process of taking an assignment of the judgment the company could forestall any valid defense that the insured might have at law to a claim that he had violated the terms of the policy. Even though *577 the insured might obtain relief in equity against the enforcement of the judgment by the company, still the provision of the endorsement contemplates no such procedure, but rather, as we have indictated, that the company's right to reimbursement must be established by action for breach of contract in which the parties are entitled to trial by jury. It is elementary that the carrier, being primarily liable, had no right of subrogation to the right of the judgment creditor. 50 Am Jur 695, Subrogation, § 20. And see 2 Freeman on Judgments (5th ed) 2360, § 1133. Obviously, the agreement for reimbursement creates no such right.
5. Upon the argument suggestion was made from the bench that our recent decision in Hicklin v. Anders, supra, had relevance upon the present question. In that case we held that a judgment creditor might accept partial payment of his judgment from one of two joint-feasors and give a release which evidenced his intention to proceed against the other tort-feasor for the satisfaction of the balance of his claim without releasing such right. We based our decision upon what seems to be the modern and more enlightened view that the intention of the parties in transactions of that character should be given effect by the courts. We note here, what we overlooked in the preparation of the opinion in that case, that the principle of this decision has the support of the American Law Institute. See Restatement, Torts, § 885 (1) and historical note at p 461. As in the present case Hicklin v. Anders involved a satisfaction of a judgment against an insurance company for an amount less than the amount of the judgment against the defendants, together with an express provision that such satisfaction did not satisfy the judgment against the defendants, although it acknowledged receipt of the lesser sum from the insurance *578 company in partial satisfaction of the judgment. But there was no assignment of the judgment to the insurance company, and this is the point of distinction between the two cases. The law, it has been said, "gives to the acts of people the result which they intend, unless there is some legal reason forbidding it." Lachner v. Myers, 121 Wash 172, 174, 208 P 1095. The legal reasons which forbid keeping alive the plaintiff's judgment against Jones through the device of assigning it to Standard have been already adequately stated. Our conclusion is that the judgment has been extinguished, with the result that the plaintiff's claim against the defendants Jacobson and Taggart, alleged to be joint tort-feasors with Jones, has been released.
The judgment, therefore, will be affirmed.