1. The special demurrer attacking the petition on the ground that no copy of the policy of collision insurance was attached thereto or set forth therein was without merit where the action was one for breach of contract based on covenants contained in a loan receipt executed by the defendant upon payment of a loss occurring under the policy.
2. In an action of the nature above indicated, where the petition alleged that the defendant breached his covenants contained in the loan receipt settling his claim and releasing the third party whose negligence caused the damage to the automobile, it was not necessary that the petition set forth in detail the negligence of such third party, and a special demurrer attacking the allegations of negligence with respect to such third party on the ground that they were vague and indefinite was without merit.
3. The petition was not subject to the general demurrer for any of the reasons assigned.
4, 5. The trial court did not err in admitting in evidence the documents as complained of in the two special grounds of the motion for new trial.
The American Casualty Company, of Reading, Pennsylvania, brought an action for breach of contract against L. C. Clark, doing business as Avondale Motors, who was alleged to be a dealer in new and used automobiles. The petition alleged in substance that the plaintiff had issued a certain policy of $100 deductible collision insurance covering a certain Chevrolet automobile owned by the defendant; that on December 5, 1955, at a time when the policy was in full force and effect, the automobile was damaged in a collision while being driven by one George P. Davis, Jr., who was a prospective purchaser of said automobile; that the defendant submitted to the petitioner a proof of loss in which it was set forth that the actual loss and damage to said automobile as the result of the collision was $500; that under the terms of said policy of insurance the plaintiff paid the defendant the sum of $400, and in consideration of said payment, the defendant executed on December 16, 1955, a loan receipt in which he agreed that said sum was a loan repayable in the event and to the extent of any net recovery that the defendant might make from any person causing or liable for the loss or damage to said automobile. The plaintiff alleged that the defendant further covenanted in said loan receipt that no settlement had been made by him with any other person against whom a claim might lie; that no release had been given or would be given without the written consent of the petitioner; and that by said loan receipt, the defendant appointed the plaintiff as his agent to collect from any person responsible for said loss or damage to said automobile, and further agreed to cooperate fully with the petitioner in any action which might be brought by the petitioner in the defendant's name against any person responsible for the loss. A copy of the proof of loss and of the loan receipt were attached as exhibits to the petition.
The petition alleged that after the execution of said loan receipt by the defendant a suit was filed in the Civil Court of DeKalb County at the instance of the plaintiff and in the name of the defendant against George P. Davis, Jr., seeking to recover damages in the amount of $600 representing the actual loss to said automobile as a result of said collision; that the petition in said suit alleged that the damage to the automobile resulted from the negligence of George P. Davis, Jr., in operating the automobile at the time and place of the collision; that prior to the bringing of said action, the same was discussed fully with the defendant and the defendant was requested to come to the office of the plaintiff's attorneys in order to discuss the matter, but that the defendant failed to do so; that on two separate occasions the case against Davis was on the trial calendar of the Civil Court of DeKalb County, and the defendant was notified to be present in order to testify therein, but that on each occasion the defendant failed and refused to appear and failed to cooperate with the plaintiff in the prosecution of the claim against the said George P. Davis, Jr.; that when the case was called the first time on September 11, 1956, counsel for George P. Davis, Jr., tendered an amendment to his answer setting out that L. C. Clark, the plaintiff in that suit and the defendant here, did on August 6, 1956, in consideration of the payment to him by George P. Davis, Jr., of the sum of $100, execute and deliver to the said George P. Davis, Jr., a general release whereby all claims set out in that suit were released. A copy of the release was attached as an exhibit to the petition. Finally, the petition alleged that because of the defendant's failure to cooperate with the prosecution of the suit against George P. Davis, Jr., and because of the execution of the release by the defendant, it was necessary that the suit be dismissed and that by said acts the defendant has injured and damaged your petitioner in the sum of $400 in breach of his contract with the plaintiff, said sum representing the amount paid under the terms of the loan receipt. The petition also set out that expenses for witness fees in the amount of $14 and court costs in the amount of $3, were necessarily incurred in the bringing of the foregoing suit and that the plaintiff was entitled to recover these sums; and, the plaintiff further alleged that on account of the bad faith of the defendant in failing to cooperate with the petitioner, and because of his wilful and malicious execution of the release without the knowledge or consent of the petitioner, and the wilful and malicious withholding of any information relative to the execution of said release and his failure
to appear when the case was called for trial entitled petitioner to reasonable attorney's fees for the bringing of the prior suit, as well as for the bringing of the instant suit.
The defendant filed an answer in which he admitted the allegations with respect to the issuance of the policy, the occurrence of the loss and damage to the automobile, the submission of the proof of loss and the payment to him of $400. All other material allegations of the petition were denied. He also filed a general and two special demurrers which were overruled by the court.
The case came on for trial in the Civil Court of DeKalb County before a judge sitting without a jury. The plaintiff introduced oral testimony by two attorneys as to the amount of its claim for attorney's fees, as to the issuance of the policy, as to the payment of the loss, and as to the execution of the loan receipt by the defendant, and placed the defendant on the stand for cross-examination. The plaintiff also introduced into evidence copies of the pleadings in the former suit and copies of the proof of loss, loan receipt and release signed by the defendant, and rested. The defendant did not introduce any evidence.
At the conclusion of the evidence, the trial judge entered an order and judgment finding for the plaintiff in the amount sued for ($414), and for the further sum of $100 as attorney's fees. The defendant filed a motion for new trial on the general grounds and amended it by the addition of 2 special grounds. The trial judge denied that motion and the exception here is to that judgment and to the judgment overruling the general and special demurrers.
(After stating the foregoing facts.) 1. The first ground of special demurrer attacks the petition on the ground that no copy of the policy of insurance is attached, nor are the complete terms thereof set out therein. This ground of demurrer is without merit. The action in this case was not an action on the policy, and the policy formed no basis for a recovery. The action was one for breach of contract, the contract being the loan receipt executed by the defendant in consideration of the payment of the loss under the policy. This was an entirely independent contract unrelated to the policy of insurance, and since the action was not one on the policy, it was not necessary that a copy of the policy be attached or referred to in the petition. Keene v. Lumbermen's Mutual Ins. Co., 60 Ga. App. 864, 865 (2) (5 S. E. 2d 379).
2. In ground 3 of the demurrer, the defendant demurred to and moved to strike the following language from paragraph 24 of the plaintiff's petition: "and has deprived himself and your petitioner of a recovery against the driver of said automobile, George P. Davis, Jr., whose negligence was responsible for said damage," on the ground that "said language is vague and indefinite in that the negligence of George P. Davis, Jr., is not specified or set out in said petition and it is not shown when, where, how, or in what manner George P. Davis, Jr., was negligent and in what way said negligence contributed to any injury of this plaintiff," and on the ground that "said allegation is a conclusion not based on the requisite facts." In this ground of the demurrer, the defendant apparently seeks to avail himself of the rule which requires a plaintiff to set forth his cause of action with sufficient particularity as to inform the defendant of the basis of the plaintiff's claim against him so that the defendant will be enabled to prepare his defense. However, the action in this case was not one based on the negligence of George P. Davis, Jr., in operating the automobile, but was an action for breach of contract by the defendant, L. C. Clark, in settling and releasing George P. Davis, Jr., after covenanting in the loan receipt that he had not settled with or released Davis and that he would not do so. Since the basis for the action was not the negligence of Davis but the breach of contract of Clark, it was only necessary that the petition set out generally the negligence of Davis. Universal Credit Co. v. Service Fire Ins. Co., 69 Ga. App. 357, 362 (25 S. E. 2d 526).
3. In their argument on the general grounds of the demurrer, counsel for the defendant contend that while the loan receipt executed by the defendant recites that the loss and damage to the automobile was caused when the insured attempted "to pass another car when this car started to make a left turn and insured struck this car" (italics ours) ; and, while the release executed by the defendant recites that the damage to said automobile resulted from a collision with a tractor-trailer of Central Truck Lines on Highway 42 at Moreland Avenue, the petition alleges that the damage occurred while the vehicle was being operated by George P. Davis, Jr. It is contended that these discrepancies between the loan receipt, the release and the petition indicate that the loan receipt and the release involved two different occurrences. In support of this contention, the plaintiff in error cites State Farm Mutual Automobile Ins. Co. v. Davis, 91 Ga. App. 850
(87 S. E. 2d 348). That case is authority for the proposition that the plaintiff in a suit for breach of a subrogation agreement must allege facts to show that the defendant has settled or compromised his claim against a third party growing out of the very same occurrence, but it is clearly distinguishable on its facts from the instant case in that there the petition failed to show these essential facts, while from the allegations of the petition in this case as outlined in the above statement of facts, it is clear that the occurrence referred to in the release and in the loan receipt are one and the same. There is no material difference in the allegations here and those in Service Fire Ins. Co. v. Powell, 70 Ga. App. 213
, 216 (27 S. E. 2d 896), the only exception being that in that case the settlement and release of the wrongdoer was made prior to the institution of the suit in the name of the insured, whereas, in this case, the settlement was made during the pendency of the suit. There it was held: "After making the above agreement [executing the loan receipt], in consideration of which the sum of $377.61 was advanced to him, the defendant could not rightfully, as between himself and the insurance company, settle and compromise any claim he had against the railroad company for damages sustained by him as a result of the collision, and in that manner escape liability to repay the $377.61. In doing so he breached his contract with the plaintiff, and rendered it impossible for the plaintiff to recover 'in the event and to the extent of any net recovery' he might obtain from the tortfeasor as the result of the damage to the Ford automobile insured by the plaintiff. In a suit against the railroad company the defendant might have
recovered the full amount of $377.61 which the plaintiff had advanced him." This ruling is in accordance with other rulings of this court and of the Supreme Court of this State and with the general rule in this country where it is almost universally held that the right of subrogation is an equitable right based on the rule against unjust enrichment. See Universal Credit Co. v. Service Fire Ins. Co., 69 Ga. App. 357, supra; 29 Am. Jur. 1008, Insurance, 1346.
4. The plaintiff introduced in evidence its Exhibit "A" attached to its petition which was a copy of the "Sworn statement and proof of loss" on one side, and "Loan receipt" on the other side. On the proof of loss side, the form bears both the names of American Casualty Company of Reading, Pennsylvania, and American Aviation & General Insurance Company. The defendant objected to the introduction in evidence of this form on the ground that the exhibit was vague and indefinite in that it was not clear whether the document was given to the American Casualty Company or to the American Aviation & General Insurance Company, and on the ground that neither the petition nor the evidence connected the exhibit with the plaintiff's cause of action; and finally, on the ground that there was no consideration moving from the plaintiff to the defendant in that the plaintiff's evidence showed that all moneys paid to the defendant were paid in consideration of and as the result of an existing insurance policy. The fourth ground of the motion for new trial assigns error on the overruling of these objections.
As to the first objection, it is clear from the pleading and all the evidence in the case, including admissions in the defendant's answer and the defendant's own testimony on cross-examination, that the policy of insurance involved was issued by the American Casualty Company, that the claim for the loss was made to the American Casualty Company under the terms of the policy and that the loss was paid by the American Casualty Company. The American Casualty Company was the plaintiff in the prior action referred to in the petition and was the plaintiff in this action, and aside from the mere immaterial reference to American Aviation & General Insurance Company made at the head of the proof of loss, there is no mention anywhere in the pleadings or the evidence that any other insurance company is involved. It is plain that the form was intended to be used in making proofs of loss to either company, and that the failure to strike from the heading of the proof of loss the name of American Aviation & General Insurance Company if material, was a mere inadvertence.
The second contention with respect to this evidence raises substantially the same question as is raised in connection with the general grounds of demurrer which are passed on in division 3 above. When all of the evidence in this case is viewed together, it is plain that there was only one collision giving rise to the payment of the defendant's claim submitted on the proof of loss and for which the release was given by the defendant to Davis in return for his payment of $100 to the defendant. For this reason the evidence was not subject to this objection.
As to the final objection, the validity of loan receipts and the right of an insurer to subrogation irrespective of provisions contained in the insurance policy or of the execution of loan receipts has been recognized and upheld by the courts of this State and is no longer open to question. Universal Credit Co. v. Service Fire Ins. Co., 69 Ga. App. 357, supra; See Phillips v. Clifton Manufacturing Co., 204 S. C. 496, 501 (30 S. E. 2d 146) (citing and quoting with approval Justice Brandeis in the case of Luckenbach v. W. J. McCahan Sugar Refining Co., 248 U. S. 139, 39 Sup. Ct. 53, 55, 63 L. ed. 170, 1 A. L. R. 1522). The trial court did not err in overruling the first special ground of the motion for new trial.
5. The second special ground of the motion for new trial assigns error because the court admitted into evidence a copy of the release signed by the defendant and given to Davis. The ground of objection was that the exhibit was not relevant and material to the plaintiff's cause of action in that it referred to a different occurrence from that referred to in the petition and other exhibits. This objection raises substantially the same issue as was raised by the plaintiff in error in his argument on the general grounds of the demurrer, and in the second objection made to the introduction of exhibit No. 1 referred to in the preceding division. This issue is answered and disposed of in the preceding divisions of this opinion. Furthermore, if in fact the release was given for an entirely different occurrence from that for which the insurance company paid the defendant, this was a matter of defense, which issue the defendant should have made by the introduction of appropriate evidence. This the defendant failed to do.
6. The evidence in this case consisted of oral testimony by the plaintiff's witnesses on direct examination, the oral testimony of the defendant on cross-examination, and the plaintiff's documentary evidence including the proof of loss, loan receipt, the release given by the defendant to Davis and copies of the pleadings in the former action. The evidence was ample to prove the case as laid in the petition, authorized the verdict and judgment, and no error of law appearing, the trial court did not err in denying the motion for new trial on the general grounds.
Judgment affirmed. Gardner, P. J., and Townsend, J., concur.