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River Valley, Etc. v. Hawkeye-security

JUNE 30, 1958.




Appeal from the Circuit Court of Cook county; the Hon. HARRY M. FISHER, Judge, presiding. Judgment reversed and cause remanded with directions.


Rehearing denied September 29, 1958.

This is an appeal from a judgment against the garnishee, appellant, in a garnishment proceeding under a policy of automobile liability insurance. The issues involve the extent of the garnishee's liability for interest.

In 1955, Velma Sawyer, now deceased, instituted an action against the River Valley Cartage Company, Inc., a corporation, to recover for personal injuries sustained in an automobile accident. A jury returned a verdict and judgment was entered in favor of plaintiff for $175,000 on May 13, 1955. Execution was returned unsatisfied in July, 1955. On July 3, 1956, the insurer for defendant in that action tendered $50,000 to plaintiff. The tender was refused. Subsequently plaintiff brought this proceeding in garnishment against the insurer, the Hawkeye-Security Insurance Co. Hawkeye answered showing that its liability under the policy was limited to $50,000. On February 15, 1957, a conditional judgment was entered against the garnishee. On March 6, 1957, the plaintiff made a motion for a final judgment. On June 26, 1957, the court entered an order finding that plaintiff was entitled to receive $68,350.67 from Hawkeye. This is an appeal from that order. Subsequently on stipulation plaintiff accepted $50,000 and the amount of this appeal was fixed at $18,350.67.

The record reveals, that Velma Sawyer, the plaintiff, died on July 11, 1955. On May 29, 1956, the court ordered that the letters of administration issued to Ershel Sawyer be entered of record, that execution could issue in the name of Ershel Sawyer, as administrator, and that the proceedings continue in his name.

The question presented by this appeal is whether or not the insurer is liable for interest on the entire amount of the judgment awarded to plaintiff until the entry of the final order by the trial court in the instant case.

The policy fixed a limit of $50,000 on its liability to each person suffering bodily injury as a result of the ownership, maintenance, or use of certain trucks by the insured. The pertinent provisions of the policy pertaining to this appeal read as follows:

"Hawkeye-Security Insurance Company . . . agrees with the insured, named in the declarations made a part hereof, in consideration of the payment of the premium and in reliance upon the statements in the declarations and subject to the limits of liability, exclusions, conditions and other terms of this policy.

"II. DEFENSE, SETTLEMENT, SUPPLEMENTARY PAYMENTS. As respects the insurance afforded by the other terms of this policy under coverages A and B the company shall:

"(b) pay all premiums on bonds to release attachments for an amount not in excess of the applicable limit of liability of this policy, all premiums on appeal bonds required in any such defended suit, the cost of bail bonds required of the insured in the event of accident or traffic law violation during the policy period, not to exceed the usual charges of surety companies nor $100 per bail bond, but without any obligation to apply for or furnish any such bonds;

"(c) pay all expenses incurred by the company, all costs taxed against the insured in any such suit and all interest accruing after entry of judgment until the company has paid, tendered or deposited in court such part of such judgment as does not exceed the limit of the company's liability thereon;

"(e) reimburse the insured for all reasonable expenses, other than loss of earnings, incurred at the company's request.

"The amounts incurred under this insuring agreement, except settlements of claims and suits, are payable by the company in addition to the applicable limit of liability of this policy."

The appellant contends that a construction of all of the foregoing provisions under section II, in light of the opening paragraph, limits the amount of interest for which the insurer is liable to interest on the sum of its total liability as designated by the applicable limit in the policy from the date of judgment in the personal injury action. Plaintiff argues that the liability of the insurer must be determined from the construction of a single provision of the policy (subsection (c) above) which, plaintiff contends, renders the insurer liable for interest on the ...

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