Court Opinion

ID: 8189402
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:12:16.12765+00
Date Added: 2024-06-11T16:40:33.020666
License: Public Domain

Barwes, J.
The authorities seem to be quite uniform to-the effect that, under a policy of indemnity insurance such as that here involved, there is no privity of contract between the insurer and the employee, and the latter cannot reach the proceeds of such policy, .at least in an action brought directly against the insurer. Allen v. Ætna L. Ins. Co. 145 Fed. 881, 76 C. C. A. 265, 7 L. R. A. n. s. 958; Connolly *567v. Bolster, 187 Mass. 266, 72 N. E. 981; O’Connell v. N. Y., N. H. & H. R. Co. 187 Mass. 272, 72 N. E. 979; Carter v. Ætna L. Ins. Co. 76 Kan. 275, 91 Pac. 178, 11 L. R. A. n. s. 1155; Cushman v. Carbondale F. Co. 122 Iowa, 656, 98 N. W. 509; Beyer v. International A. Co. 115 App. Div. 853, 101 N. Y. Supp. 83; Frye v. Bath G. & E. Co. 97 Me. 241, 54 Atl. 395, 59 L. R. A. 444; Allen v. Gilman, 137 Fed. 136.
No good reason is apparent why the payment which the contract obligates the assured to-make as a condition precedent to his right to maintain action upon the policy might, not he made otherwise than in money, provided such payment is made and accepted in good faith and there is a bona ■fide settlement and satisfaction of the judgment secured by the injured employee. Kennedy v. Fidelity & C. Co. 100 Minn. 1, 110 N. W. 97. Neither do we attach any particular significance to the fact that the suit is brought by a receiver instead of in the name of the beneficiary designated, in the policy. Travellers Ins. Co. v. Moses, 63 N. J. Eq. 260, 49 Atl. 720.
The receiver here was not appointed to administer the affairs of the insolvent corporation for the benefit of creditors generally, but was appointed in a proceeding- supplementary to and in aid of an execution issued at the instance of a single creditor and for the sole purpose of collecting the judgment in this action. With the exception of the policy referred to, apparently all of the assets of the insolvent were turned over to the trustee in bankruptcy for the benefit of creditors having provable claims against it. The policy by its terms was of no value to the defendant herein, or to any one else, until the judgment of the plaintiff was satisfied.
Considering the purpose for which the receiver 'here was. appointed, if he could pay the judgment by giving his note, and such note was received in satisfaction of the judgment, and it was satisfied, it would seem that the object for which, he was appointed had been accomplished, and any further *568proceeding on Ms part was unnecessary to discharge Ms legitimate functions. However this may be, the proceeding was certainly novel. On its face the action taken was a more subterfuge resorted to for the purpose of making a nominal compliance with the terms of the insurance contract. The contract was one which the parties thereto had a right to make, and it would be trifling with its terms for a court to hold that the shadowy payment here attempted to be made conformed to its requirements. There was no bona ■fide, payment of the judgment. The fictitious payment reported to is too thinly veiled to stand the test of judicial •scrutiny.
It may well be doubted whether the defendant.in this notion had any right to complain of the ex parte order authorizing the giving of the note and the compromise of the judgment and the bringing of the action against the insurance company. Whether it had or not, it was clearly within the province of the court to set aside the former ex parte order as soon as attention was called to its indefensible character.
It is well settled that the matter of authorizing receivers to execute notes in proper cases, and of authorizing them to commence actions, rests in the sound discretion of the trial court, and that orders in reference to such matters made by ■such courts will be reversed only when there is an abuse of ■such discretion. Neeves v. Boos, 86 Wis. 313, 56 N. W. 909. The case might well be disposed of upon this rule of law; but lest a decision upon this point should be construed as intimating that the ex parte order of the trial court might be sustained if the trial court had refused to set it aside, we deemed it best to consider the question on its merits rather than to simply hold that there was no abuse of discretion in making the order appealed from.
By the Court. — Order affirmed.