(273 S.W.)

sions of the compensation act, but had not care to so maintain it. Not only so, the elected so to do. Before action on the de- court had already in instruction No. 1 propmurrers a reply was filed, and thereafter an erly told the jury it was the duty of defendamended reply, wherein it was alleged ap- ant to use ordinary care to maintain the pellant was engaged in coal mining and en- roof in a reasonably safe condition. It is titled to operate under the compensation act, | clear therefore not only that instruction No. and had not elected so to operate, and that 5 was wholly unnecessary because there was therefore the defenses of contributory negligencé, assumed risk, and the negligence of a fellow servant were not available to it as defenses. The pleadings in the Adams Case present practically the same issues, except as to violation of rules hereinafter referred to.

mony on the trial, he had given a signed statement of which the following was a part:

"It is my honest opinion that the reason Will (meaning Barnard) was hurt was because he was sitting in a cramped position and tried to raise up to ease himself and, on account of the crowded condition of the car, raised himself too high."

On the trial defendant offered to introduce

ficers and agent of defendant, whose duty it was to enforce the rules. Upon another trial the court will admit the evidence of all the witnesses who were present, as to what occurred when Barnard got on the car, but will exclude such of it as were mere expressions of opinion as to the danger of his riding on the front of the car with the driver.

[8] The instructions in the Adams Case were free from error. Adams was an em

this signed statement as tending to contra-ployee and was riding in the body of the dict the positive statements of Flener, as to the existence of the hanging slate and the cause of the injury, and the court declined

to permit the quoted portion of it to be considered. Without Flener's evidence, the case would not have been submitted to the jury, and as this prior statement of his may

in some of its aspects be considered as wholly inconsistent with his evidence on the trial, we are of opinion that the court erred in not permitting the same to be heard as contradicting it. It is true the language, in which that part of the statement is couch. ed, is technically only an expression of opin

car, and was one of the first persons to board it, and there is no claim he was violating any rule, but was merely going to his work in the usual way. Even if Barnard had by his own willful misconduct brought about the injury to himself, and consequently the injury to Adams, still there is no apparent reason why Adams should not recover, for the fellow servant doctrine is not available as a defense.

act (Greene v. Caldwell, 170 Ky. 571, 186 S. W. 648, Ann. Cas. 1918B, 604), but similar acts have almost without exception been held

It is further ably and earnestly argued that the Workmen's Compensation Act (Ky. St. § 4880 et seq.) is violative of the state been exhaustively considered by this court Constitution. Not only has this question ion by Flener; but when it is considered that he was an occupant of the car and a witness in an action brought specially for the purto the accident itself, it is difficult to har-pose of testing the constitutionality of that monize that expression of opinion with his subsequent evidence on the trial. It can hardly be true that he entertained that opinion as to the cause of the injury, when according to his evidence on the trial the hanging slate was the sole cause. Clearly such an expression of opinion by him, being inconsistent with his testimony, was competent to destroy or weaken the latter, and surely this erroneous action of the court, combined with the error in giving instruc

tion No. 5, constitute reversible error.

[6] The evidence did not justify the giving of an instruction on willful misconduct. At the time of the injury, the decedent was in discharge of his duty in going by the usual route to his place of work, and was guilty

constitutional in a number of other states.

In the light of the modern tendency shown by these acts to change the method of awarding compensation to injured employees, we do not feel called upon to reconsider that question.

The judgment in the Barnard Case is reversed, with directions to grant appellant a new trial, and for further proceedings consistent herewith; but the judgment in the Adams Case is affirmed.

of nothing which was intended to, or which TRANSYLVANIA CASUALTY INS. CO. et al.

would have, in the ordinary course of events, brought injury either to himself or other employees. Not only was the company supposed to carry him to his work place on its cars, but assuming he was acting in violation of the rules, such violation, when considered in connection with the alleged negligence of defendant, is contributory negligence, and not willful misconduct, and consequently not available as a defense. West Ky. Coal Co. v. Smithers, 184 Ky. 211, 211 S. W. 580 (second appeal) 188 Ky. 224, 221 S. W. 558; Hollenbach Co. v. Hollenbach, 181 Ky. 262, 204 S. W. 152, 13 A. L. R. 524.

[7] Likewise the second instruction, dealing with the question of habitual violation of the rules, should upon another trial embrace the idea that such violation was by and with the knowledge or assent of the of

v. WILLIAMS.

(Court of Appeals of Kentucky. June 16, 1925.)

I. Insurance 514-Policy limiting liability to
actual loss from claims for damages construed
according to terms.

from claims for damages for bodily injuries,
Policy indemnifying against loss resulting
not against mere liability for loss must be con-
strued according to its terms, without enlarge-
ment or restriction; subject-matter being one
as to which parties had right to so contract.
2. Insurance 514-Party recovering judg.
ment against insured, who never paid it, held
not entitled to recover amount from insurer.

Under policy indemnifying "against loss arising or resulting from claims for damages on account of bodily injuries," one recovering judgment against insured, who was insolvent

(273 S.W.)

3. Pleading 34(4) - Presumption that indemnity policy, not alleged to have been in effect at time of injury, had expired or was inoperative at such time.

and never paid any of judgment, could not re- appellant Joshlin, with the name and date cover amount thereof from insurer, in absence and amount omitted. A general demurrer of statute so providing, policy indemnifying was interposed to the petition and overruled against actual loss sustained by insured only, by the court. When the defendants Joshlin not against liability for loss. and the Transylvania Casualty Insurance Company declined to plead further, judgment was entered substituting appellee, Gypsy Williams, by, etc., to the rights of Joshlin against the Transylvania Casualty Company and adjudging she recover of the insurance company the amount of the judgment in her favor against Joshlin for $1,800, with interest from its date, April 30, 1923, and the cost of the original action, $62.70, and also her cost From this incurred in the present action. judgment, both Joshlin and the Transylvania Casualty Insurance Company appeal. Appellants earnestly insist that the gen

As pleading must be construed strongest against pleader, petition not alleging that policy, indemnifying insured against loss resulting from claims for damages for bodily injuries, was in force at time of injury to plaintiff, suing insurer for amount of judgment against insured, gives rise to presumption that policy had expired or was inoperative as to insured at such time.

Appeal from Circuit Court, Franklin eral demurrer to the petition should have County.

Action by Gypsy Williams, by her next friend, Everett Williams, against the Transylvania Casualty Insurance Company and another. Judgment for plaintiff, and defendants appeal. Reversed.

Polk South, Jr., of Frankfort, and Jas. P. Haswell, of Louisville, for appellants.

T. L. Edelen and Guy H. Briggs, both of Frankfort, for appellee.

been sustained. In support of this assertion appellants say that the petition does not allege there was any consideration flowing between appellee, Williams, by, etc., and the Transylvania Casualty Insurance Company for the execution and delivery of the policy; and, further, that it is not averred in the petition that the policy of insurance alleged to

have been issued to Joshlin was in force and effect at the time appellee, Gypsy Williams, was injured; that it is not alleged that Joshlin was indemnified in any certain amount, or that the amount for which he is alleged to be indemnified is in excess of the judgment obtained. For these reasons it is said

tucky or in any other state of the Union except where there is a special statute permitting it to be done. In support of this last statement appellants cite the case of Fidelity & Casualty Co. v. Martin, 163 Ky. 12, 173 S. W. 307, L. R. A. 1917F, 924, as conclusive of the question.

SAMPSON, J. Appellee, Gypsy Williams, a girl less than 21 years of age, suing by her next friend, recovered a judgment in the Franklin circuit court against appellant Josh-in brief of appellant that appellee, Williams, lin for an accidental injury suffered by her through the negligent operation of an auto- cannot maintain a suit of this nature in Kenmobile by Joshlin, who was carrying indemnity insurance with appellant Transylvania Casualty Insurance Company, and, when execution issued pursuant to that judgment was returned "no property found," instituted this equitable action in the Franklin circuit court against appellants Joshlin and the Transylvania Insurance Company, praying to be substituted to the rights of Joshlin as against the Transylvania Casualty Insurance Company to the extent of the judgment for $1,800, recovered by her against Joshlin in the personal injury suit, on the ground that Joshlin is insolvent, and the casualty insurance carried by him was for the use and benefit of persons suffering damages through his negligence, including appellee. The Transylvania Casualty Insurance Company issued to Joshlin, before the accidental injury to appellee, Williams, its policy of casualty insurance by which it agreed to indemnify him, the said Joshlin, against loss arising or resulting from claims upon him for damages on account of bodily injuries accidentally suffered, or alleged to have been suffered, by any person or persons not in the employ of Joshlin.

To the petition was attached a copy of the policy of casualty insurance issued by the Transylvania Casualty Insurance Company to

For appellee, Gypsy Williams, it is said that there is a distinction between the terms of the contract in the Martin Case, supra, and the case at bar, for which reason the rule announced in that case has no application to the present case; that an indemnity company which contracts for the right to control any litigation for accidents, for which it is responsible, and acquires the exclusive right to control such litigation, is bound by the judgment; that the expression "loss actually sustained." as employed in the policy, is fulfilled and satisfied when a good-faith judg ment is obtained in a court of competent jurisdiction against the insured, upon a cause for which the insurer is liable.

The opinion in the case of Fidelity Casualty Co. v. Martin, to which we have referred, seems to have application to the facts of this case and to cover practically every phase of it. There is, however, some distinction between the language employed in the contract

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

The policy in this case provides:

"In consideration of the premiums and of the statements specified herein, the Transylvania Casualty Insurance Company hereby agrees to indemnify the assured designated herein: Against loss arising or resulting from claims upon the assured for damages on account of bodily injuries, accidentally suffered or alleged to have been suffered by any person or persons not in the employ of the assured, while this policy is in force, including death resulting at any time therefrom by reason of the ownership, maintenance, or use (including loading and unloading) of any of the automobiles described herein, within the limits of the United States and Canada, subject to the following limitations."

of insurance in the Martin Case and the in- | contract. With this in mind, it is evident to stant case. The policy in the Martin Case us that the insurance company did not agree provided: to indemnify appellant Joshlin against liabil"No action shall be brought against the com-ity for loss, but only against loss actually suspany under or by reason of this policy unless it tained on account of bodily injury suffered, shall be brought by the assured for a loss, de- etc. The petition avers that appellant Joshfined hereunder, after final judgment has been lin is insolvent, and that an execution issued rendered in a suit, described hereunder, and against him on the judgment in favor of apwithin two years from the date of such judg- pellee, Williams, had been returned "no propment, to wit, for a loss that the assured has erty found," that no part of the judgment had actually sustained by the assured's payment in been paid to appellee by appellant, Joshlin, money-(a) of a final judgment rendered, after a trial in a suit against the assured." and that no part of it con be realized by her from him. Manifestly from these facts Joshlin has not şustained a loss arising or resulting from claims upon him for damages on account of bodily injuries accidentally suffered by another through the operation of his automobile. He had not paid or lost a cent, as is shown by the averments of the petition. No loss had been sustained. Had he paid the judgment against him, he would have been entitled to reimbursement by the casualty company, but he has not paid the judgment, and has not attempted to require the appellant company to satisfy the judgment against him. In fact, he is in no position to ask, if he wanted to, that such payment be made until he has satisfied the judgment or has suffered a loss arising in the way specified in the policy. In the case of Fidelity & Casualty Co. v. Martin, supra, it was contended that the recovery of the judgment by the victim of the automobile accident against the owner of the automobile, who carried indemnity insurance, "was a loss actually sustained by the estate of the assured in the meaning of the policy, for which [the casualty company] became liable, without the payment of the judgment by the assured." After quoting the clause of the policy providing that the casualty company shall not be liable except after judgment, and then only for the loss which the assured "has actually sustained by the assured's payment in money of a final judgment rendered after a trial in a suit against the assured," we said:

The limitations follow and fix the highest amount for the death of a single individual at $5,000, and damage to property of others at $1,000.

[1, 2] It will be observed, from a glance at the foregoing copy of the provisions of the present policy, that only Joshlin was insured; that is, he alone was indemnified against "loss arising or resulting from claims for damages on account of bodily injuries actually suffered," etc. Not only that, but he was indemnified only against loss and not against liability for loss. In the case of Ford v. Etna Life Insurance Co., 70 Wash. 29, 126 P. 69, it is said:

"The policy indemnifies against loss and not against liability. It seems quite clear that the liability in clause D, for loss 'actually sustained and paid in money by him after actual trial of the issue,' is not enlarged or changed by the stipulations in the preceding clauses, but that a compliance with its terms is made a condition precedent to any right of action on the policy. In short, the policy is one of indemnity against loss actually sustained and paid in money by the assured, without regard to who assumes the defense."

Supporting this doctrine are collected a great number of cases from different states of the Union, some of which are referred to in case notes in 59 L. R. A. 444; 30 L. R. A. (N. S.) 1224; 11 L. R. A. (N. S.) 1155.

The contract must be construed according to its terms. Its terms must not be enlarged or restricted. The subject-matter was one about which the parties had the right to contract and to limit their liability, and they are

"The policy is one of indemnity against loss actually sustained and paid in money by the assured, without regard to who assumes the defense, or whether it is successfully or unsuccessfully made. In the preceding clauses, A and E, the appellant reserved the privilege and assumed the obligation of defending or settling claims for damages covered by the policy, and the assured undertook to furnish all needful assistance in making a defense, and agreed that he would not voluntarily assume any liability, interfere in any negotiations or legal proceedings that might be conducted by appellant on account of any claim for such damages, nor settle such claim at his own cost without written consent of appellant. there is nothing in any provision of clauses A that, in the event such defense as appellant and E which actually or by implication declares might make to an action brought against the assured for damages should be unsuccessful, it would pay the judgment. The question of pay

But

(273 S.W.)

him the right of action against the insurance company, which even he cannot bring until he sustains a loss by the payment in money of a liability. For these reasons the authorities cited by appellee's counsel as bearing on this aspect of the case are inapplicable."

K. It would therefore seem to follow that the fact that appellant made defense for the assured or his administrator in the action for damages brought by appellee did not estop it from denying liability under its policy in the present action. The right to defend being given appellant by the policy, we must suppose that the burden of making the defense was assumed for the reason that the award to be made in that action might finally be the measure of appellant's own responsibility. And, indeed, would have been, if the administrator of the assured had, as provided by clause K, paid the judgment recovered against him by appellee. But, in view of the provisions of the policy to the contrary, the act of appellant in defending the ac-pany is liable only in case the assured sustion for damages in behalf of the assured or his administrator was not an agreement, and did not constitute an undertaking to pay appellee's judgment for the assured or his administrator."

Further discussing the matter with respect to the rights of the injured party to maintain an action against the casualty company, we said:

"The policy in question was not written for the protection of appellee, or even remotely for his benefit. Its sole object was to indemnify the assured, Wells, against loss sustained and paid."

There was no privity between appellee, Williams, and appellant casualty company. She had not paid anything to the casualty company, on account of the policy or otherwise, and the casualty company had not entered into any contract or obligation with her. Upon that subject we said in the Martin Case:

Although there is a difference in the phraseology, we are unable to see any substantial difference in effect between the terms of the policy contract in the Martin Case, supra, and the case at bar. In both the assured was to be indemnified against loss and not against liability for loss merely. The com

tains a loss by the payment of damages. A judgment against the assured for damages on account of an accident against which the policy runs does not satisfy that condition of the policy, if up to the time of payment of a judgment appellant had suffered no loss. He has been out nothing. When he pays the judgment, he is entitled to be reimbursed according to the terms of his policy.

This rule has been changed by statutes in some states, but the General Assembly of Kentucky has not, up to the present time, thought it wise to make the change. In the absence of such legislation we must adhere to our announced doctrine and to the rule generally adopted by courts in the various states of this Union.

a policy, by

[3] We are pursuaded that the demurrer to the petition should have been sustained upon yet another ground. It is averred in the petition, "prior to the institution of said action, the defendant William Joshlin had procured from his codefendant, Transylvania Casualty Insurance Company the terms of which said insurance company agreed to indemnify him, the said Joshlin, against loss arising or resulting from claims upon him for damages on account of bodily injuries accidentally suffered"; but it is not averred the policy was in force and effect at the time of the accidental injury to appellee, Gypsy Williams. Although the policy was taken out by Joshlin prior to the happening of the accident, it may have been cancelled, surrendered, or annulled, or it may have expired by its terms. If it were not in effect at the time of the accident to appellee, Williams, it makes no difference when it was

"Whatever obligation arises out of a contract is due to the person to whom the obligation exists or is made; therefore an action for the breach of a contract can, as a rule, be brought only by one who is a party to the contract. An exception is allowed in the case of the third party, for whose benefit a contract is made. In such case he may be allowed to bring an action in his own name, but it must be made to appear that when the contract was made some obligation or duty was owing from the promisee in the contract to the party to be benefited, and not merely that the performance of the contract might be made to benefit him. If this were not true, one's responsibility for not carrying out his agreement with another would have no limit, as the ill effects of his failure to do so could be taken advantage of by one claim-issued to Joshlin, and there would be no ing to be affected, even to a remote degree. Cardwell v. Atwater, 15 R. 570; Triplett v. Helm, 5 J. J. Mar. 651; Powers v. Eva, 2 Bibb. 317; Mobile Life Ins. Co. v. Brame, 95 U. S. 754; Carter v. Etna Life Ins. Co., 91 Pac. (Kan.) 178. Manifestly the doctrine of privity can have no place in the consideration of this case, as it is excluded by the terms of the policy, which make it a contract exclusively for the benefit of the assured, and confines to

liability thereon. As the pleading must be construed strongest against the pleader, the presumption is that the policy was taken out long before the accident and had expired by its terms, or at least that it had become inoperative as to Joshlin at the time of the accident.

For the reasons indicated, the judgment is reversed, for proceedings consistent herewith.