PUREFOY v. PACIFIC AUTOMOBILE INDEMNITY EXCHANGE.a1
Plaintiff had recovered judgment in a prior action against one W. S. Austin and his son, Jack Austin, by reason of injuries to plaintiff caused by the automobile of said Austin. This action is predicated upon the judgment in the former case and is brought against defendant as liability insurance carrier for Austin. The contention was made that defendant was not liable on its insurance contract because insured had failed to notify this defendant of the accident and had failed to co-operate with defendant in preparing and presenting a defense, contrary to the requirements of the contract, and that by reason thereof this defendant was unable to defend the action. From judgment for defendant, the plaintiff appeals on grounds that assured did not violate his insurance contract, and any breach that did occur would not preclude recovery by this plaintiff against the insurer.
The contract required that assured shall give “immediate written notice of any accident, claim, loss or suit hereunder with fullest information obtainable, especially the names and addresses of all witnesses to the accident or other occurrence, under which liability arises or might arise, and shall immediately deliver to the attorney every summons or any other papers served on him on behalf of third persons, and shall also render all assistance necessary for the proper defense of said action, as requested by the attorney or its legal representatives; and shall also be and appear in court upon and at all times during the trial of any action at law arising out of, or involving, any accident, claim, loss or suit hereunder. * * * The assured shall aid in securing information and evidence. * * *” It further provides that the duty imposed by the foregoing terms of the contract “is a condition subsequent and immediately upon a failure or refusal to perform any one or more of said conditions this policy and the liability of the exchange, if any, thereunder shall automatically terminate.”
The insurance contract was dated December 15, 1929. The accident occurred the next day, December 16th. No notice of the accident was given this defendant by assured or otherwise prior to March 15, 1930, when the former action was instituted against the Austins. On March 31, 1930, September 20, 1930, and April 10, 1931, insurer was advised of pendency of that action and was requested by attorneys for plaintiff, upon the last two dates, to appear on behalf of assured. On March 18, 1931, a year and three months after the accident, Austin was served with summons and complaint and transmitted them with a note to the broker or agent through whom the insurance had been placed, saying, “please advise procedure.” The latter answered on behalf of insurer disclaiming liability for lack of notice of the accident, and advising Austin to secure private counsel. The evidence indicates that Austin was out of the state for about a year immediately following the commencement of the action, and insurer was not informed of his address.
The court found that the contract contained in substance the terms above set forth; that neither Austin nor any one acting for him had given the information or notice required thereby except as above outlined, and that the same constituted a violation of the contract; that by reason thereof defendant was “unable to properly or otherwise or at all defend the action mentioned.”
The right of action of an injured party against an insurer (St. 1919, p. 776) is not absolute, but is subject to lawful terms and limitations of the policy when the latter are reasonably necessary for the protection of the insurer and can be readily complied with by assured. It must be shown, of course, to establish a valid defense based on a violation of the condition by assured, that such violation caused substantial prejudice to insurer. Hynding v. Home Acc. Ins. Co., 214 Cal. 743, 7 P. (2d) 999, 85 A. L. R. 13. The findings, amply supported by the evidence, conform to the above rule so as to render effectual the defense relied upon by respondent.
SCOTT, Justice pro tem.
We concur: STEPHENS, P. J.; DESMOND, J.