Court Opinion

ID: 6923172
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:09:02.291343+00
Date Added: 2024-06-11T16:06:51.469681
License: Public Domain

On Petition for Rehearing
PER CURIAM.
Appellees Robert J. Cooney and National Union Fire Insurance Company have filed a petition for a rehearing en bane, specifying six grounds therefor, which will be considered in order.
(1) Appellees contend that the court failed to consider the point that Cooney is entitled to be treated as an “insurer” under California law and paragraph 30(A) of the Atlantic policy providing that “in the event the interest insured is covered by other insurance the loss shall be recoverable under the several policies in the order of the date of their attachment * * * ”. (Emphasis supplied.) This provision, in our opinion, obviously refers only to insurance policies issued by other insurance companies.
(2) It is next contended that Atlantic should be barred because it did not follow the provision of paragraph 30 (C) of its policy that pending collection from a carrier or bailee who might be liable therefor, Atlantic “agrees to advance as a loan such amount which would be a claim under this policy if it did not contain this warranty, repayable only to the extent of any net recovery from such carrier or bailee”. This paragraph does not specifically refer to subrogation. If it may be construed as bearing upon subrogation, it simply enlarged the right of Atlantic to subrogate even though it merely made a “loan” to its insured. Atlantic was not required to make any payment as a “loan” in order to enforce its subrogation rights.
(3) It is appellees’ principal contention that this court has failed to follow California law on the right of subrogation to contractual rights, relying upon Meyers v. Bank of America, 1938, 11 Cal.2d 92, 77 P.2d 1084, and Hughes v. Potomac Insurance Co., Cal.App., 1962, 18 Cal.R. 650. The Meyers case was distinguished in our opinion. Hughes also is distinguishable. It was there held that in an action by insureds to recover from their insurer for a loss sustained when the rear end of their lot fell into a creek, the insurer’s liability was not affected by the fact that the damage caused by the landslide was repaired by a county flood control district without cost to the insureds, and that the windfall resulting from the “gratuitous action” of the flood control district inured to the' insured’s benefit and did not relieve the insurer from liability under its policy.
Appellees argue that Hughes is contrary to Chicago, St. L. & N. O. R. Co. v. Pullman Southern Car Co., 139 U.S. 79, 83, 11 S.Ct. 420, 35 L.Ed. 97, 101, and F. H. Vahlsing, Inc. v. Hartford Fire *272Insurance Co., Tex.Civ.App., 108 S.W. 2d 947, cited in our opinion. Pullman and Yahlsing, however, involved the precise question here presented, i. e., the right of an insurer to recover under its right of subrogation from a bailee of the insured on the bailee’s express agreement to be responsible for the loss. Hughes and the cases therein cited involved the right of an insured to recover from the insurer where repairs are made by a third party. On this point there are two lines of authority, the so-called New York rule followed by the California court in Hughes and the so-called Wisconsin rule, rejected in Hughes. It is significant that while Hughes expressly discussed the two lines of authority, no mention is made of either Pullman or Vahlsing, presumably because an entirely different question is involved in those cases. We find nothing in Hughes which may not be reconciled with the holding in Pullman and Vahlsing that either the insured (Exchange) or its insurer (Atlantic), by right of subrogation, may recover from a third party (Cooney) who has expressly assumed responsibility for the loss.
(4) We find no merit in appellees’ fourth contention that under California law “liability insurance must not be considered in a third party suit”. The liability insurer (National) was a party upon its own motion to intervene. The portion of the opinion to which exception is taken merely refers to the fact that National will bear Cooney’s loss to the amount of National’s policy and to that extent the equities asserted would be those of National rather than Cooney. Moreover, on the question of equities, Atlantic’s obligation was one of indemnity only. That of Cooney was positive and unconditional.
(5) It is appellees’ fifth contention that the lack of consideration for the policy agreement was not cured by performance, since there was no complete performance by either party. The action is to recover damages for Cooney’s failure as bailee to return merchandise which it received from Exchange. Insofar as this obligation is concerned, Exchange had performed fully when it caused the merchandise to be delivered to Cooney for packing. If, and when, Cooney packed and redelivered he would become entitled to payment for his services. He became potentially liable for a failure to redeliver, however, as soon as he received the merchandise.
(6) Appellees contend finally that the court has not followed the California law with respect to integration of contracts, relying upon Hancock Oil Co. v. McClellan, 1955, 135 Cal.App.2d 667, 288 P.2d 39. The Hancock case is distinguishable. It was there held that since only one agreement was mentioned in the complaint and that agreement was in writing “and is designated by both parties as the sole basis for their relationship”, and since there was no other agreement between the parties, “the construction of that instrument disposes of the issues”. Here the contract construed by the trial court specifically provided for the receipt and packing by Cooney of merchandise received “pursuant to purchase orders to be issued” by Exchange.
Appellees have also filed their objection to Atlantic’s cost bill on appeal, contending that each side should bear its own costs, in that National was partially successful in that it obtained a determination that interest does not run on its liability until judgment is entered below. We agree.
Appellees’ petition for a rehearing is denied. Their objection to Atlantic’s cost bill is sustained, and each side will bear its own costs on appeal.