Appeal from the Circuit Court of Fulton County; the Hon. KEITH
F. SCOTT, Judge, presiding. Reversed.
On October 22, 1952, Edward Lee Ruark was riding in a truck owned and being driven by one, Virgil Sims. This truck was involved in a collision with another motor vehicle owned by one, Ghlee Watson and being driven by one, Sherman Kinsel, as his servant. Ruark was severely injured. It so happened that Illinois National Casualty Company, now Illinois National Insurance Company, had prior thereto issued separate policies of automobile liability insurance to each, Virgil Sims and Ghlee Watson. The insurance company commenced an investigation of the collision either the same day or shortly thereafter. As early as October 27, 1952, an area supervisor in the home office of the insurance company concluded that the insurance company would not have to defend against or pay any claims asserted by Ruark against its policyholder Sims and he so advised the adjuster and investigator in the area. This decision was, sometime between October 23, 1952, and December 5, 1952, relayed to Sims and later to his personal attorney.
On March 12, 1954, Ruark commenced a suit against Sims, Watson and Kinsel to recover damages for his personal injuries sustained in the collision. The insurance company was advised of the suit and received a copy of the complaint. The insurance company employed counsel for Watson and Kinsel, who appeared, answered and conducted the trial of the case on their behalf as defendants. Sims was required to employ his own personal attorney to defend the suit, who likewise appeared, answered and conducted the trial on his behalf, since the insurance company would not depart from its initial position that it would not defend Sims. A trial of the case before a jury resulted in a not guilty verdict as to Watson and Kinsel and a guilty verdict as to Sims with damages fixed at $13,034.86. Judgments were entered on these verdicts and no appeal was taken. Subsequently a garnishment action was commenced against the insurance company as insurer of Sims and it is that garnishment suit that forms the basis of this appeal.
The pleadings in the personal injury suit are important. The complaint filed by Ruark, a single count complaint, alleges that on the day of the collision "he was riding as passenger in a truck then owned by Virgil Sims, one of the defendants herein, which said truck with the said plaintiff, as passenger, was then and there being operated and driven by said defendant (Sims)." The complaint then alleges that the truck came in contact with the vehicle of Watson driven by Kinsel as a result of which he sustained his injuries. It is further alleged that he, Ruark, was exercising ordinary care for his own safety and that each of the defendants was negligent, which negligence concurred in producing his injury. Sims, by his personal counsel as above, filed an answer denying most of the material allegations of the complaint. Counsel for Watson and Kinsel, retained by the insurance company, filed a separate but joint answer on behalf of Watson and Kinsel in which they admitted that Ruark was riding as a passenger in the truck but further alleged that "the said Ruark was then and there an employee of said Virgil Sims and was then and there acting in the course of his employment."
It is also important to note the policy provisions of the policy issued to Sims. The liability coverage is $20,000. Under the title "Insuring Agreements" we find the following:
"Coverage A Bodily Injury Liability.
"To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of the automobile."
Following this, coverages B through J provide for varying types of coverage. Following these coverages there is:
"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:
"(a) defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient";
The policy also incorporates certain "Exclusions," the material one here being:
"This policy does not apply:
"(d) under coverages A and C, to bodily injury to or sickness, disease or death of any employee of the insured while engaged in the employment, other than domestic, of the insured or in domestic employment if benefits therefor are either payable ...