Opinion ID: 1736832
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Heading Rank: 2

Heading: Mobile Insurance's Appeal

Text: Counsel for Mobile Insurance contends that regardless of the satisfaction of the judgment by co-defendant Auto Owners, Mobile Insurance has the right to maintain its appeal. We agree. Within the factual context there presented, this Court in Moore v. Cooke, 264 Ala. 97, 84 So.2d 748 (1956), said: [T]he rule has long obtained in this state that the mere payment of a judgment by a judgment debtor does not work a waiver of the right of appeal. First Nat. Bank of Birmingham v. Garrison, 235 Ala. 94, 177 So. 631, and cases cited. See Freeman on Judgments, 5th Ed., § 1165, p. 2410. We think that principle has application here, for if it can be said that the record before us sufficiently shows a payment of the judgment from which this appeal is taken, it is conceded that such payment was made by the insurance carrier on the defendant's behalf. 264 Ala. at 100, 84 So.2d at 750. Likewise, when faced with a similar situation, the California Supreme Court held in In re Merrill's Estate, 29 Cal.2d 520, 175 P.2d 819 (1946), that where a money judgment makes two defendants jointly liable, voluntary satisfaction by one of them does not deprive the other of his right to appeal. The court added that deprivation of the right to appeal ensues only when it is shown that the payment of the judgment was by way of compromise or with an agreement not to take or prosecute an appeal. 29 Cal.2d 524, 175 P.2d at 822. In Merrill, there was no voluntary satisfaction by the defendant seeking to appeal; rather, the judgment was paid by his co-defendant, without knowledge or consent on the part of the appealing defendant. We are persuaded by the Moore, Garrison, and Merrill decisions to deny Plaintiffs' motion to dismiss the appeal taken by Mobile Insurance; and we hold that a defendant is not precluded from appeal when a co-defendant pays and the plaintiff receipts payment in satisfaction of the judgment.
Mobile Insurance contends that the judgment entered by the trial court is clearly contrary to the law in this State. Because Mobile Insurance is an admitted agent of Auto Owners, counsel for Mobile Insurance argues that the judgment cannot bind the principal, as well as the agent, under the principal's contract. We agree. In Gillis v. White, 214 Ala. 22, 106 So. 166 (1925), this Court stated: Where a complaint declares on a contract as made with the plaintiff by one of the defendants as the agent of another defendant, it states no cause of action against the agent defendant. When one contracts merely as the agent of a disclosed principal, he binds either his principal or himself, but not both; and a joint action against both involves a practical as well as a legal anomaly. If the principal was bound, as intended, the agent cannot be held liable on any principle of law or justice. 214 Ala. at 23, 106 So. at 167. In Gillis, the purported agent was found not to be an agent at all, but, instead, was found to be an independent buyer of cotton. Thus, he was held liable under the contract negotiated by him on the principal's behalf. The judgment obligating the agent on the principal's contract was reversed in Sealy v. McElroy, 288 Ala. 93, 257 So.2d 340 (1972). The Court said: An agent is presumed to intend to bind his principal only and to incur no personal liability and unless an intention to substitute or superadd his personal liability for or to that of his principal is clearly shown, he will not be bound in his individual capacity.3 C.J.S. Agency § 215 b, p. 121. Certain it is that such an intention cannot be said to be clearly shown by the evidence in this case. 288 Ala. at 104, 257 So.2d at 350. Likewise, no such intent can clearly be shown by the evidence in this case. The only policy of insurance introduced at trial was the policy of insurance between Smith and Auto Owners existing at the time of the accident. It was not contested that Mobile Insurance was acting as an agent for Auto Owners with respect to the policy of insurance in question. No policy of insurance existed at any time, however, between Smith and Mobile Insurance. The facts that Mr. Smith's wife dealt with Mobile Insurance over the phone, and that he mailed his premium checks to Mobile Insurance, do not serve to bind the agent on the principal's contract. The jury found, and the evidence supports the finding, that Auto Owners, as the only insurer, was bound on its contract of insurance. If Auto Owners, the principal, was bound, it logically follows that Mobile Insurance, the agent, cannot be so bound under the only theory stated against themas insurer. Gillis, supra, and Sealy, supra ; see, also, Alabama Traction Co. v. Selma Trust & Savings Bank, 217 Ala. 653, 117 So. 19 (1928). We have not overlooked the nature of the Plaintiffs' claim barred from the jury's consideration by the trial court's directed verdictthe torts of fraud and bad faith. While, ordinarily, the contract rule of Gillis and Sealy, supra, does not operate with equal force in the respondeat superior tort context, where the agent's conduct, which renders the principal liable, necessarily binds the agent, an exception exists here, because a requisite element of the bad faith species of fraud is a breach of the payment provisions of the contract. Furthermore, Smith does not contend that he asserted any tort claim against Mobile Insurance other than on its tortious failure to honor the insurance contract as an insurera claim not supported by the evidence. The trial court, therefore, erred in refusing to grant Mobile Insurance's motion for directed verdict on Count I, the only count submitted to the jury, because there was no evidence that Mobile Insurance was an insurer for Smith. Because Mobile Insurance was not an insurer for Smith, it follows that Mobile Insurance had no duty to defend Smith in the action filed against him by the Therrells. The judgment of the trial court against Mobile Insurance is hereby reversed, and the case is remanded with instructions for the trial court to enter judgment for Defendant Mobile Insurance. 82-279, REVERSED AND REMANDED WITH INSTRUCTIONS; 82-285, APPEAL DISMISSED. TORBERT, C.J., and MADDOX, SHORES and BEATTY, JJ., concur.