Mayor, Lane & Co. v. Commercial Casualty Insurance

Ingraham, P. J.:

I concur with my brother Laughlin in his construction of this agreement, except as to the clause which prohibits a settlement with any one claiming damage for personal injuries except with the written consent of the defendant. I think it is clear that the defendant was bound to defend the plaintiff against a claim made against it for personal injuries resulting from an accident, whether the plaintiff was liable or not, and *780the defendant is, therefore, responsible .for the expense of defending the Schaefer action. The company having broken its contract in regard to defending the action, the plaintiff could go on and defend and, if Schaefer obtained a judgment, the defendant would be responsible and also responsible for the expense of defending the action. The plaintiff , however, instead of submitting the question as to its liability, before the trial was ended voluntarily settled with Schaefer, and for the amount paid in pursuance of such a voluntary settlement I do not think the defendant is liable. To hold it to such a liability, it seems to me, would be a violation of condition “ D ” annexed to the policy, that “no action shall lie against the Company to recover for any loss or expense under this policy unless it shall be brought by the Assured for loss or expense actually sustained and paid in money by the Assured after actual trial of the issue, * * * ” and also condition “C,” which expressly provides that “ the Assured shall not voluntarily assume any liability, * * * or settle any claim, except at the Assured’s own cost, without the written consent of the Company previously given.” I think, therefore, the judgment should be reduced to the amount of the cost of defending the Schaefer action and, as so modified, affirmed, without costs to either party on this appeal.

Determination and judgment reversed and new trial ordered, with costs to appellant to abide event, unless plaintiff stipulates to reduce recovery as stated in opinion, in which event judgment, as so modified,- and determination affirmed, without costs. Order to be settled on notice.