Earle v. Earle, 198 N.C. 411 (1930)

Feb. 26, 1930 · Supreme Court of North Carolina

198 N.C. 411

ANNA L. EARLE v. ROBERT EARLE and THE GLOBE INDEMNITY COMPANY.

(Filed 26 February, 1930.)

1. Husband and Wife B d — A wife may maintain an action against her husband for a negligent injury.

An action by the wife against her husband for a negligent injury will lie in the courts of this State, C. S., 454, 2513, and after summons has been duly served and a verified complaint filed in accordance with statute, a judgment by default and inquiry may be entered against the husband upon his failure to answer. 3 O. S., 597(a).

2. Judgments K b — Insurer liable to person injured only upon return of unsatisfied execution may not move to set aside judgment against insured.

In order to set aside a judgment by default and inquiry on the ground of mistake, inadvertence, surprise or excusable neglect, C. S., 600, the mistake or surprise, etc., must be on the part of the party making the motion to set aside, and where the judgment is obtained against an insured by the person negligently injured by him, and the policy of accident insurance expressly provides that the insurer shall not be liable to the person injured until after return of execution against the insured unsatisfied, the insurer may not make a motion to have the judgment against the insured set aside for the surprise, excusable neglect, etc., of the insurer caused by failure of the insured to give notice of the accident and send all process and pleadings to the insurer under the terms of the policy.

Appeal by plaintiff from OraHmer, J., at November Term, 1929, of Edgecombe.

Reversed.

The summons in the action was dated 8 July, 1929, and service was made on defendant, Robert Earle, on the same date and on Insurance Commissioner for The Globe Indemnity Company, 12 July, 1929. Complaint was duly verified and filed before the clerk on 8 July, 1929. The defendant Indemnity Company, by consent, was allowed until 1 September, 1929, to file pleadings. The time was, by consent, extended to 1 January, 1930, and on 14 October, 1929, plaintiff took a voluntary nonsuit as to the Indemnity Company. On 9 August, 1929, and on 14 October, 1929, judgment by default and inquiry before the clerk was rendered against defendant Robert Earle. Both judgments by default and inquiry before the clerk ordered the causes “to be transferred to the civil issue docket in order that the amount of damages sustained by the plaintiff from and on account of the alleged negligence of the defendant, Robert Earle, and the amount of damages' which the plaintiff claims she is entitled to recover from the defendant, Robert Earle, be ascertained, determined and fixed by a jury.” On 30 October, 1929, the defendant Indemnity Company made a motion to set aside the default and inquiry judgments rendered against Robert Earle on tbe ground of mistake, inadvertence, surprise or excusable neglect. On 9 November, 1929, tbe clerk refused tbe motion of tbe Indemnity Company, and in tbe judgment set forth among other things:

“That tbe defendant, Robert Earle, nor any one in bis behalf, entered any appearance or filed any pleadings or motions within tbe time allowed by law.

“That tbe consent orders entered on 3 August, 1929, and 21 August, 1929, granting an extension of time to tbe defendant Globe Indemnity Company, to file answ'er, applied only to such pleadings as it might wish to file in its own behalf and did not contemplate or apply to any pleadings it might desire to file in behalf of its codefendant, Robert Earle.

“That tbe defendant, Globe Indemnity Company, purposely refused to enter any appearance or file any pleadings for and in behalf of Robert Earle within tbe time allowed by law.

“Therefore, it is by tbe court ordered and decreed, that tbe motion of tbe Globe Indemnity Company filed herein be, and tbe same is hereby denied, and tbe two judgments heretofore entered, be and tbe same are hereby in all respects ratified and reaffirmed.”

From this judgment tbe Indemnity Company appealed to tbe Superior Court. Tbe record discloses numerous affidavits introduced on tbe bearing of tbe motion in tbe Superior Court. Tbe order setting aside tbe judgments of tbe clerk and findings of fact comprise about fifteen pages of tbe record.

Tbe defendant Indemnity Company contends: “That according to tbe terms of tbe insurance or indemnity contract or agreement entered into by and between tbe said Robert Earle, defendant, and Globe Indemnity Company, it was expressly stipulated and agreed, among other things, (1) that upon tbe occurrence of any accident to which tbe policy applied, tbe said Robert Earle should give immediate written notice thereof with tbe fullest information obtainable to Globe Indemnity Company, at Newark, N. J., or to one of its duly authorized representatives; that tbe assured shall give like notice with full particulars of any claim made on account of such accident; and that if thereafter suit is brought against tbe assured to enforce such claim tbe assured shall immediately forward to tbe company at Newark, N. J., every summons or other process that may be served upon tbe assured; (2) that tbe said Robert Earle should not voluntarily assume any liability or incur any expense, other than for immediate surgical relief, or settle any claim, or satisfy any judgment from which an appeal may be taken, except at bis own cost; and that whenever requested by tbe company and at tbe company’s expense, tbe said Robert Earle, defendant, should aid in securing information and evidence and tbe attendance of witnesses, and shall fully cooperate with the company except in a pecuniary way, in all matters which the company deems necessary in the defense of any suit or in the prosecution of any appeal.” That from the report or statement filed of the accident by defendant, no liability attached to him, and furthermore the injuries to plaintiff were sustained in the State of Virginia, and a wife could not in that State maintain an action against her husband for a tort committed by him on her during coverture, and further that defendant Eobert Earle had not been guilty of any negligence. “That in disregard of the terms and conditions of said policy of insurance or indemnity, the said Eobert Earle, defendant, did not give to Globe Indemnity Company, or to any of its duly authorized representatives, any notice of any kind that action had been instituted against him on account of the injury sustained by the plaintiff, as set forth in his report, the only knowledge this company having had of said action being from the copy of summons and complaint sent to it by the State Insurance Commissioner of North Carolina; nor did the said Eobert Earle, defendant, in compliance with the terms of said policy, ever send to the home office of said company, at Newark, N. J., the summons, complaint and other process that was served upon him, or any notice whatsoever of said suit; nor did the said Eobert Earle, defendant, ever file an answer or other pleadings in this cause, or do anything which would tend to free himself and reduce the damages which might be awarded in the event the plaintiff should be entitled to recover.”

The judgment rendered in the court below is as follows:

“It is therefore, by the court, in its discretion, adjudged and decreed, that the default and inquiry judgment rendered by the clerk of the Superior Court of Edgecombe County on 9 August, 1929, in favor of the plaintiff and against the defendant, Eobert Earle, be, and the same is hereby set aside in full; and it is further so ordered, adjudged and decreed, that so much of the second judgment rendered by the clerk of the Superior Court of Edgecombe County on 14 October, 1929, as adjudged that 'It is, therefore, on motion of Henry 0. Bourne, attorney for plaintiff, ordered, adjudged and decreed, that said plaintiff recover judgment by default and inquiry against the said defendant, Eobert Earle, and this cause be and the same is hereby transferred to the trial docket of the Superior Court at term, for the purpose of ascertaining the amount of damages the said plaintiff is entitled to recover against the defendant, Eobert Earle, be, and the same is hereby set aside in full. It is further-ordered, adjudged and decreed that Globe Indemnity Company have until 15 January, 1930, to file answers in this cause, for and in behalf of the said Eobert Earle, defendant, and for and in behalf of itself, as it may deem advisable.’ ”

The plaintiff excepted and assigned error to the judgment as signed and entered, as erroneous and contrary to law, and appealed to the Supreme Court.

Other necessary facts will be set forth in the opinion.

■Henry C. Bourne for plaintiff.

H. H. Philips for Globe Indemnity Company.

Clabksoit, J.

In the present action defendant, Robert Earle, was duly served with summons. The complaint was properly verified and filed within the time required by the statute. The court had jurisdiction of the person and the complaint alleges actionable negligence against the defendant. It is a suit of the wife against the husband for negligent injury, but it is now well settled in this jurisdiction that such an action will lie. C. S., 454, 2513; Crowell v. Crowell, 180 N. C., 516, S. c., 181 N. C., 66; Roberts v. Roberts, 185 N. C., 566; Small v. Morrison, 185 N. C., 577; In re Will of Witherington, 186 N. C., 152; Roberts v. Guaranty Co., 188 N. C., 795; Hyatt v. McCoy, 194 N. C., 25; Etheredge v. Cochran, 196 N. C., 681.

Judgment by default and inquiry was rendered before the clerk on 9 August, 1929, and transferred to the civil issue docket to have the damage determined and fixed by a jury, and a like judgment was rendered on 14 October, 1929. No appeal was taken by defendant from these judgments. No doubt the two judgments were taken “in abundance of caution,” and to comply with N. 0. Code, 1927, 597(b). At least defendant did not appeal from either judgment by default and inquiry.

N. 0. Code, 1927, 597(a) is as follows: “If no answer is filed, the plaintiff shall be entitled to judgment by default final or default and inquiry as authorized by sections 595, 596 and 597, and all present or future amendments of the said sections; and all judgments by default final shall be duly recorded by the clerk and be docketed and indexed in the same manner as judgments of the Superior Court and be of the same force and effect as if rendered in term and before a judge of the Superior Court; and in all cases of judgment by default and inquiry rendered by the clerk, the clerk shall docket the case in the Superior Court at term time for trial upon the issues raised before a jury, or otherwise, as provided by law, and all judgments by default and inquiry shall be of the same force and effect as if rendered in term and before a judge of the Superior Court.”

A judgment by default and inquiry for the want of an answer establishes the cause of action and leaves the question of the amount of damages open to the inquiry, Junge v. MacKnight, 137 N. C., 285, 288, 49 S. E., 474; Farmer-Cole Plumbing Co. v. Wilson Hotel Co., 168 N. C., 577, 84 S. E., 1008; Armstrong v. Asbury, 170 N. C., 160, 86 S. E., 1038; Gillam v. Cherry, 192 N. C., at p. 198; but tbe burden of proving any'damages beyond sucb as are nominal rests upon tbe plaintiff. Hill v. Hotel Co., 188 N. C., 586, 125 S. E., 266.

Tbe Globe Indemnity Company bad issued a policy of insurance, or indemnity, to tbe defendant, Robert Earle, wbo tbe Indemnity Company charged bad violated bis contract witb tbe company, and bad not given proper notice of tbe accident or of tbis action, or defended tbe suit. Tbe Globe Indemnity Company, in its motion to set aside tbe judgments, “respectfully petitions and moves tbe court that it will, on account of mistake, inadvertence, surprise or excusable neglect, and in its discretion, relieve said Tbe Globe Indemnity Company and Robert Earle, defendant, from two judgments rendered in favor of tbe plaintiff and against tbe defendant, Robert Earle (as hereinbefore set out), and will set' aside and vacate said judgments, and will allow your petitioner to file an answer in tbis action for and in behalf- of tbe said Robert Earle, defendant, and it respectfully assigns as reasons,” etc.

C. S., 600, is as follows: “Tbe judge shall, upon sucb terms as may be just, at any time within one year after notice thereof, relieve a party from' a judgment, order, verdict or other proceeding taken against him through bis mistake, inadvertence, surprise or excusable neglect, and may supply an omission in any proceeding. Tbe clerk may bear and pass' upon motions to set aside judgments rendered by him, whether for irregularity or under tbis section, and an appeal from bis order on sucb motion- shall lie to tbe judge at tbe next term, wbo shall bear and pass upon sucb motion de novo: Provided, however, nothing in tbis section shall be construed to affect tbe rights of innocent purchasers for value in foreclosure proceedings where personal service is obtained.”

In Foster v. Allison Corporation, 191 N. C., at p. 173, tbe following is said: “It will be noted that tbe statute says Through bis mistake, inadvertence, surprise or excusable neglect.’ We think tbis language Through bis’ ex vi termini means personal knowledge, be can then apply for tbe relief as set forth in O. S., 600.”

“If tbe statute gives tbe right to open or vacate a judgment taken against a party through ‘his’ mistake, no mistake made by any other person will justify tbis action.” 34 C. J., part sec. 516, “Judgments,” at p. 298, citing cases from California, Indiana, Montana, New York, and Boyden v. Williams, 80 N. C., 95. See Commissioners of Chowan v. Bank, 197 N. C., 410.

In Small v. Morrison, 185 N. C., at p. 579, we find: “By express stipulation, tbe indemnitor is not to be held liable in an action at tbe instance of the injured party, unless and until ‘execution against the assured is returned unsatisfied’ in an action brought against him. This, in terms, is made a condition precedent to the right of the injured party to maintain an action against the indemnity company; and where the rights of the parties are fixed by contract, the law will uphold such rights.” The policy in the present action has the above provision and further “no action shall lie against the company to recover upon any claim or for any loss under Insuring Agreement I (a) and I (b) until the amount of such claim or loss shall have been fixed and rendered certain either by judgment against the assured after trial of the issue or by agreement between the parties with the written consent of the company nor unless brought within two years thereafter.”

The principle is thus stated in Harrison v. Transit Co., 192 N. C., at p. 548: “The prevailing doctrine is that if the indemnity is clearly one against loss suffered by the assured no action can be maintained against the indemnity company until some loss or damage has been shown; but if the contract indemnifies against liability a right of action against the principal and the surety company accrues when the injury occurs.” Williams v. Motor Lines, 195 N. C., 682.

In Luttrell v. Hardin, 193 N. C., at p. 269, speaking to the subject, citing numerous authorities, it is said: “It is well settled in this jurisdiction: ‘That the assured . . . must actually sustain a loss before an action will lie upon the indemnity policy, as this is expressly required by the terms.’ Killian v. Hanna, ante, p. 20. It has been repeatedly held that the fact that a defendant in an actionable negligence action carried indemnity insurance could not be shown on the trial. Such evidence is incompetent.” The contract made between The Globe Indemnity Co., and defendant Robert Earle, has no ambiguity about it, but is clear, and its provisions have been construed time and time again by the Courts. It must abide the written words.

In this jurisdiction, “coverture is not now a defense in bar of the running of the statute of limitations since 13 February, 1899.” In re Will of Witherington, supra, at p. 154.

From the view we take of this action, the question as to whether a meritorious defense is shown is not necessary to be considered. Nor do we decide as to whether appellant may assert such defense against the judgment rendered herein. For the reasons given, the judgment below is

Reversed.