Wyatt v. Finley

*161ON REHEARING

LECHE, J.

We heretofore held in this case, that under Section 23, Act 20, page 58, of 1914, an employee could, without any (previous formality, sue directly the surety of his employer. After reconsidering this question on application for rehearing, we now believe that' we erred in so holding. The language of the statute is as follows:

“That no policy of insurance against liability arising under this Act shall be issued unless it contains the agreement of the insurer that it will promptly pay to the person entitled to compensation all installments of the compensation that may be awarded or agreed upon, and that the obligation shall not be affected by any default of the insured after the injury, or by any default in the giving of any notice required by such policy, or otherwise. Such agreement shall be construed to be a direct obligation by the insurer to the person entitled to compensation, enforceable in his name. No policy of insurance against liability under this Act shall be made unless such policy shall cover the entire liability of the employer under this Act.” ■

The responsibility of the insurer is, by the terms of the law, limited to the payment of the installments of the compensation that may be awarded or agreed upon and consequently does not cover the payment of the installments of the compensation that have neither been awarded nor agreed upon. It is not alleged nor is it pretended under the pleadings in this case, that there ever was any award or agreement as to the installments of any compensation due by the employer to the employee. The conclusion is therefore irresistible that plaintiff has not brought herself within the requirement of the statute, before attempting to enforce directly the obligation of the insurer towards the employee. Judge Claiborne, in a well-reasoned opinion of the Orleans Court of Appeal, in the case of Stouff vs. Travelers Insurance Company, 7 La. App. 13, so held.

The language of Section 2'5 of the same Act, confirms this construction of Section 23, for if the employee could sue directly the insurer of his employer, without any previous formality, there could be no necessity for the enactment of Section 25, which permits a direct action where the employer has been shown by an unsatisfied writ of execution to be insolvent.

Counsel for defendant insurance company, also cite another case decided along the same line by the Orleans Court of Appeal, viz: Griffin vs. Hotard, No. 11,028 of the docket of that Court, 7 La. App. 604. This decision is not accessible to us. We therefore rest our conclusion on the case of Stouff vs. Travelers Ins. Co., which appears to us to be sound and logical.

Counsel for plaintiff stresses particularly clause D in the insurance contract in this case, which substantially says that the contract is made for the benefit of the employee and is enforceable against the insurance company by such employee in his name or in his hehalf, at any time, and in any manner permitted by law, whether proceedings are brought against the insurance company alone or jointly with the employer. Of course, a surety can enter into a conventional agreement with an employer and agree to any condition not reprobated by law. But reading further, clause G of the contract clearly shows that clause D does not support plaintiff’s position as to her right to sue directly without formality. Clause G specially provides that no action shall lie against the insurance company to recover any claim for loss under paragraph 1, until such loss shall have been fixed or rendered certain by final judgment against the employer or by agreement between the (parties, just as is *162provided in Section 23 of the Compensation' Act. ' :

Eor these reasons our former judgment is set aside, and it is further ordered that the judgment appealed from be avoided, and reversed and plaintiff’s demand rejected at their costs as against the Travelers Insurance Company.