J. Fred Jones, Justice.
This is an appeal by Members Mutual Insurance Company, hereinafter called Mutual, from a circuit court judgment rendered on a jury verdict in favor of Thon is Blissett in a suit brought by Blissett to recover the excess of a judgment rendered against him in a suit for personal injuries instituted by Mr. and Mrs. Frisby.
The background facts are these: Mr. and Mrs. Frisby brought suit against Mr. Blissett for personal injuries growing out of an automobile collision and obtained a judgment on a jury verdict against Blissett in the amount of $21,418 and the judgment was affirmed on appeal to this court. Blissett v. Frisby, 249 Ark. 235, 458 S.W. 2d 735. Blissett carried his liability insurance with Mutual under a policy with $10,000 limit for each person. Under the terms of the policy Mutual agreed to defend any suit against the insured alleging bodily injury or property damage and seeking damages payable under the terms of the policy. Among other things the policy provided as follows:
“. . . the company may make such investigation and settlement of any claim or suit as it deems expedient.
* * *
The insured shall cooperate with the company and upon the company’s request, assist in making'settlements, in the conduct of suits and in enforcing any right of contribution or indemnity against any person or organization who may be liable to the insured because of bodily injury, property damage or loss with respect to which insurance is afforded under this policy; and the insured shall attend hearings and trials and assist in securing and giving evidence and obtaining the attendance of witnesses. The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for such immediate medical and surgical relief to others as shall be imperative at the time of accident.”
Mr. Blissett filed the present suit against Mutual alleging that he was sued for $40,350 by the Frisbys; that Mutual furnished and paid for a defense to that lawsuit but that during the pendency of the lawsuit and prior to the trial thereof, the Frisbys made frequent demands for a settlement of their claims for sums less than the limits under Mutual’s policy, but that Mutual’s highest offer in settlement was the sum of $4,000 which was so meager as to constitute bad faith and negligence on the part of Mutual. Mr. Blissett prayed damages in the amount of $21,-776 together with 12% penalty, reasonable attorney’s fee and 6% interest from December 16, 1969, until paid.
In Mutual’s answer it denied that it was guilty of negligence or bad faith in its negotiations for a settlement with the Frisbys. A jury trial resulted in a judgment for Mr. Blissett in the amount of $11,418 still owed on the Frisby judgment together with all interest accumulated thereon, said amounts to be paid into the registry of the court for the satisfaction of the judgment in favor of the Frisbys against Blissett. The policy limits of $10,000 had already been paid by Mutual.
On appeal to this court Mutual contends that its motion for directed verdict should have been granted by the trial court and that the trial court erred in ordering the payment of interest on the Frisby-Blissett judgment accruing prior to the entry of judgment in the case at bar.
In the argument in support of its contention that the court erred in not directing a verdict in its favor, Mutual narrows the issues to two points stated as follows:
“First we submit that the law in this State is that if the insurance company is to be held liable for a negligent failure to settle, there must have been a demand by the insured that the company settle the case within the policy limits.
Secondly, . . . there was no evidence submitted on which it could be concluded that the defendant was guilty in failing to settle.”
In support of its contention that a demand must be made by the insured before liability attaches for failure to settle, the appellant cites Southern Farm Bureau v. Parker, 232 Ark. 841, 341 S.W. 2d 36, and argues that even though the necessity of a demand was not discussed in the opinion in that case, that we should now declare such to be the law. The Parker case was decided in 1960. In State Farm Mutual Automobile Ins. Co. v. Jackson, 346 F. 2d 484 (1965), the Eighth Circuit Court of Appeals stated:
“As to the matter of a demand to settle: Although the Arkansas court in Southern Farm Bureau Insurance Company v. Parker, supra, approved a set of instructions, including, inter alia, one requiring a demand for settlement by the insured, that specific point was not discussed or specifically ruled by the Court in that case. No case has been cited, and we find none, in which the Arkansas Supreme Court has affirmatively decided the above question.”
The Eighth Circuit Court of Appeals affirmed the District Court in holding that a demand to compromise was not necessary to liability and it was pointed out in the Jackson decision that under the terms of the policy contract the company was given the power to determine whether an offer of compromise should be accepted or rejected within its coverage limits.
We do not deem it advisable to lay down a strict rule of law in this case that would require the insured to make demands upon the company that the claim be settled within the policy limits regardless of the provisions of the agreed contract. As already pointed out, in the case at bar, Mutual reserved the right to make such investigation and settlement of any claim or suit as it deemed expedient and the contract provided that the insured “shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than such immediate medical or surgical relief to others as shall be imperative at the time of the accident.” As a matter of fact, the policy contract provides that “the insured shall cooperate with the company and upon the company’s request, assist in making settlement. . .” (Emphasis added). There is no suggestion in the case at bar that Mr. Blissett, the insured, failed to co-operate with Mutual.
We now come to the question of whether there was sufficient evidence of negligence on the part of Mutual to take the case to the jury and we con-elude that there was. In Hoffman Wholesale Supply Co. v. Terry, 240 Ark. 399, 399 S.W. 2d 658, in dealing with a directed verdict, we said:
"... this court has said on numerous occasions that, in determining the correctness of the trial court’s action in directing a verdict for either party, we must take that view of the evidence which is most favorable to the party against whom the verdict is directed, and, .if there is any substantial evidence tending to establish an issue in favor of the party against whom the verdict is directed, it is error for the court to take the case from the jury. See Barrentine v. The Henry Wrape Company, 120 Ark. 206, 179 S.W. 328, and cases cited therein. Also, in Smith v. McEachin, 186 Ark. 1132, 57 S.W. 2d 1043, we said:
‘. ...
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J. Fred Jones, Justice.
This is an appeal by Members Mutual Insurance Company, hereinafter called Mutual, from a circuit court judgment rendered on a jury verdict in favor of Thon is Blissett in a suit brought by Blissett to recover the excess of a judgment rendered against him in a suit for personal injuries instituted by Mr. and Mrs. Frisby.
The background facts are these: Mr. and Mrs. Frisby brought suit against Mr. Blissett for personal injuries growing out of an automobile collision and obtained a judgment on a jury verdict against Blissett in the amount of $21,418 and the judgment was affirmed on appeal to this court. Blissett v. Frisby, 249 Ark. 235, 458 S.W. 2d 735. Blissett carried his liability insurance with Mutual under a policy with $10,000 limit for each person. Under the terms of the policy Mutual agreed to defend any suit against the insured alleging bodily injury or property damage and seeking damages payable under the terms of the policy. Among other things the policy provided as follows:
“. . . the company may make such investigation and settlement of any claim or suit as it deems expedient.
* * *
The insured shall cooperate with the company and upon the company’s request, assist in making'settlements, in the conduct of suits and in enforcing any right of contribution or indemnity against any person or organization who may be liable to the insured because of bodily injury, property damage or loss with respect to which insurance is afforded under this policy; and the insured shall attend hearings and trials and assist in securing and giving evidence and obtaining the attendance of witnesses. The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for such immediate medical and surgical relief to others as shall be imperative at the time of accident.”
Mr. Blissett filed the present suit against Mutual alleging that he was sued for $40,350 by the Frisbys; that Mutual furnished and paid for a defense to that lawsuit but that during the pendency of the lawsuit and prior to the trial thereof, the Frisbys made frequent demands for a settlement of their claims for sums less than the limits under Mutual’s policy, but that Mutual’s highest offer in settlement was the sum of $4,000 which was so meager as to constitute bad faith and negligence on the part of Mutual. Mr. Blissett prayed damages in the amount of $21,-776 together with 12% penalty, reasonable attorney’s fee and 6% interest from December 16, 1969, until paid.
In Mutual’s answer it denied that it was guilty of negligence or bad faith in its negotiations for a settlement with the Frisbys. A jury trial resulted in a judgment for Mr. Blissett in the amount of $11,418 still owed on the Frisby judgment together with all interest accumulated thereon, said amounts to be paid into the registry of the court for the satisfaction of the judgment in favor of the Frisbys against Blissett. The policy limits of $10,000 had already been paid by Mutual.
On appeal to this court Mutual contends that its motion for directed verdict should have been granted by the trial court and that the trial court erred in ordering the payment of interest on the Frisby-Blissett judgment accruing prior to the entry of judgment in the case at bar.
In the argument in support of its contention that the court erred in not directing a verdict in its favor, Mutual narrows the issues to two points stated as follows:
“First we submit that the law in this State is that if the insurance company is to be held liable for a negligent failure to settle, there must have been a demand by the insured that the company settle the case within the policy limits.
Secondly, . . . there was no evidence submitted on which it could be concluded that the defendant was guilty in failing to settle.”
In support of its contention that a demand must be made by the insured before liability attaches for failure to settle, the appellant cites Southern Farm Bureau v. Parker, 232 Ark. 841, 341 S.W. 2d 36, and argues that even though the necessity of a demand was not discussed in the opinion in that case, that we should now declare such to be the law. The Parker case was decided in 1960. In State Farm Mutual Automobile Ins. Co. v. Jackson, 346 F. 2d 484 (1965), the Eighth Circuit Court of Appeals stated:
“As to the matter of a demand to settle: Although the Arkansas court in Southern Farm Bureau Insurance Company v. Parker, supra, approved a set of instructions, including, inter alia, one requiring a demand for settlement by the insured, that specific point was not discussed or specifically ruled by the Court in that case. No case has been cited, and we find none, in which the Arkansas Supreme Court has affirmatively decided the above question.”
The Eighth Circuit Court of Appeals affirmed the District Court in holding that a demand to compromise was not necessary to liability and it was pointed out in the Jackson decision that under the terms of the policy contract the company was given the power to determine whether an offer of compromise should be accepted or rejected within its coverage limits.
We do not deem it advisable to lay down a strict rule of law in this case that would require the insured to make demands upon the company that the claim be settled within the policy limits regardless of the provisions of the agreed contract. As already pointed out, in the case at bar, Mutual reserved the right to make such investigation and settlement of any claim or suit as it deemed expedient and the contract provided that the insured “shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than such immediate medical or surgical relief to others as shall be imperative at the time of the accident.” As a matter of fact, the policy contract provides that “the insured shall cooperate with the company and upon the company’s request, assist in making settlement. . .” (Emphasis added). There is no suggestion in the case at bar that Mr. Blissett, the insured, failed to co-operate with Mutual.
We now come to the question of whether there was sufficient evidence of negligence on the part of Mutual to take the case to the jury and we con-elude that there was. In Hoffman Wholesale Supply Co. v. Terry, 240 Ark. 399, 399 S.W. 2d 658, in dealing with a directed verdict, we said:
"... this court has said on numerous occasions that, in determining the correctness of the trial court’s action in directing a verdict for either party, we must take that view of the evidence which is most favorable to the party against whom the verdict is directed, and, .if there is any substantial evidence tending to establish an issue in favor of the party against whom the verdict is directed, it is error for the court to take the case from the jury. See Barrentine v. The Henry Wrape Company, 120 Ark. 206, 179 S.W. 328, and cases cited therein. Also, in Smith v. McEachin, 186 Ark. 1132, 57 S.W. 2d 1043, we said:
‘. ... In testing whether or not there is any substantial evidence in a given case, the evidence and all reasonable inferences deducible therefrom should be viewed in the light most favorable to the party against whom the verdict is directed, and, if there is any conflict in the evidence, or where the evidence is not in dispute but is in such a state that fair-minded men might draw different conclusions therefrom, it is error to direct a verdict.’”
See aslo Home Mut. Fire Ins. Co. v. Cartmell, 245 Ark. 45, 430 S.W. 2d 849.
It is clear, therefore, in the case at bar that the trial court did not err in refusing to direct a verdict in favor of Mutual if there was evidence upon which fair-minded men might draw different conclusions therefrom. It is well established in this state than an insuror is liable to its insured for any judgment in excess of the insured’s policy limits if the insuror’s failure to settle the claim was due to fraud, bad faith or negligence. Tri-State Ins. Co. v. Busby, 251 Ark. 568, 473 S.W. 2d 893.
We now examine the evidence in the light of the above rules. The facts surrounding the collision out of which the original lawsuit arose are set out in Blissett v. Frisby, supra. There was the usual conflict in that evidence; Mrs. Frisby contending that she had gradually slowed her automobile and was in the process of driving it to the shoulder of the highway when she was suddenly struck from the rear by the Blissett automobile. Mr. Blissett testified that he observed Mrs. Frisby having difficulty with her small child in the seat with her and he contended that she suddenly stopped her automobile in the highway ahead of him and he could not avoid striking her automobile.
Mrs. Frisby underwent thoracic surgery after several months medical treatment as a result of injuries she sustained in the collision and the sufficiency of the evidence to sustain the amount of the judgment for her injuries is not questioned. We now consider the evidence as it relates to Mutual’s alleged negligence in its failure to settle the Frisby claim against Blissett within the policy limits.
Mr. John M. Shackleford, Jr., an attorney in El Dorado, represented Mr. and Mrs. Frisby in their suit against Mr. Blissett and he testified at length as to the efforts made to settle the Frisby claim. The substance of his testimony was to the effect that both prior and subsequent to his employment, the Frisbys offered to settle for $5,000 and Mutual offered $3,000. He said that after the issues were joined in litigation with attorney Richard H. Mays representing Mutual and Mr. Blissett, a first trial of the case resulted in a mistrial because of the jury being unable to agree on a verdict. He said that it was established by evidence at the trial of the case that Mrs. Frisby had sustained medical and related special damages of $4,408.39 and a 10% to 20% permanent partial disability because of the injuries. He said he still offered, on behalf of the Frisbys, to settle their claim for $8,500 together with $200 property damage and the costs, and that Mutual did finally offer an additional $1,500 on the medical, making a total of $4,500 as its best and final offer. Mr. Shackleford testified that after the judgment was entered in this case, in recognition of Mr. Blissett’s limited assets, he offered to settle the judgment for substantially less than the amount of it but to no avail. He said that after the judgment was affirmed by this court, Mutual paid the $10,000 limits of their coverage and also paid $350 property damage together with accumulated interest.
Mrs. Evon Blissett testified that she was a passenger in her husband’s automobile; that she gave her deposition but did not testify at either trial. She said she did not have any contract with any representative of Mutual before suit was filed but did talk with attorney Mays after suit was filed. She said that she does not remember the exact amount the Frisbys were asking in setdement but it seemed to her at the time that it was a rather small amount. She said that prior to the first trial when she and her husband were in Mr. Mays’ office, and her husband inquired as to why Mutual did not settle the Frisby claim, Mr. Mays replied: “They’re just being stubborn.”
Mr. Blissett’s testimony was about the same as that of Mrs. Blissett. He said that when the accident occurred, he reported it to Mutual’s Dallas office; that the Dallas office referred him to an adjuster in Texarkana who in turn referred him to the Ed Morneau’s Claims Service in Hope, Arkansas. He said he was subsequently contacted by an adjuster from that firm. He said he did not consider the collision in any way his fault, but that no one discussed the matter with him from the time he discussed it with the adjuster immediately following the collision until about a year later when he was served with summons. He said that during the preparation for one of the trials, he asked Mr. Mays whether the Frisbys had offered to settle and was advised that they had. He said that he then inquired as to why the matter had not been settled and that Mr. Mays replied: “Well, they wouldn’t. Thev were being stubborn and wouldn’t settle.” He said he did not know whether there was any offer after that or not. He said he didn’t inquire any further into the matter because he knew nothing about procedure of that nature and didn’t know whether his insurance company should settle or not settle; that he left the matter entirely up to Mr. Mays to handle.
Mr. Vernon T. Winchester, assistant claims manager for Mutual, testified that he is sure that he reviewed the file in this case after the Morneau firm had finished its investigation. He said that he did not feel that Mr. Blissett was at fault. He said that he selected attorney Mays to defend the lawsuit and sent him the copy of complaint and the investigation file. He said that he received a letter from Mr. Mays advising that depositions had been taken and recommending a figure of not in excess of $5,500 as a top offer in settlement. He said that he acts on the advice of Mutual’s attorney, and upon receipt of Mr. Mays’ letter he raised the reserves on the claim from $3,100 to $6,100 on the personal injuries in addition to the reserve for medical subrogation and property damage. Mr. Winchester testified, “I do not reserve in excess of what I think a case is possibly worth.” He said that after he learned that Farm Bureau was also being represented on its subrogation claim by Mr. Shackleford, he extended settlement authorization to Mr. Mays in the total amount of $4,500 and that Mr. Mays never aid make other recommendations above the $5,500 figure. He said that after the judgment totaling over $21,000 was rendered at the second trial and before appeal to this court, Mutual was willing to pay the $10,000 limit plus property damage if it could wipe the whole thing out and “get Mr. Blissett off the hook.”
On cross-examination Mr. Winchester testified that he never did tell Mr. Mays to offer as much as the $5,500 recommended by Mr. Mays. He said that after the first trial resulting in a hung jury and prior to the second trial, he did not increase the authority by calling Mr. Mays and saying, “Richard, offer so much.” He said that he did ask Mr. Mays to delve into the possibility of negotiation. He testified that he had no recall of increasing the authorization to Mr. Mays between the two trials. He testified that he changed the reserves on this case from $3,100 to $6,100 for bodily injuries and a separate reserve for property damage and said he would have authorized the payment of $6,100 for the bodily injuries because he did not reserve more than the maximum amount he thinks a claim is worth. He said that he could not tell from his files whether Mr. Mays ever knew that Mutual would be willing to pay $6,100 in settlement of the claim. He said he never did give Mr. Mays authority to settle the claim for $6,100, but did ask Mr. Mays to delve into the possibility of negotiating the claim after he had authorized $4,500 and after demand was made for $8,500 plus property damage. He testified that the maximum authority reflected in his files was $4,500, and he never did extend any further written authority to Mr. Mays to settle the case.
Mr. Mays testified that Mutual sent the file to him and advised that it was advising the Blissetts that he had been retained to represent their interest in the case and that they should communicate with him, which they did. He said that he had several conversations with the Blissetts and discussed the fact that they were being sued for more than the policy limits. He said that after going over the matter he suggested to Mutual a settlement figure not to exceed $5,500. He said that in making this suggestion he took into consideration the extent of injuries on what he considered to be a questionable case of liability, and that because of what he considered to be comparative negligence on the part of Mrs. Frisby, he felt there was a reasonable possibility of a defendant’s verdict. He testified that he does not recall the Blissetts inquiring as to why the case was not being settled. He said he was under the impression that the Blissetts were hoping that the case could be settled as a matter of convenience, but that he does not recall ever stating to them that Mutual was being stubborn. He testified that after Mr. Shackleford got into the case the offer he made on behalf of the Frisbys was $8,500, which included the medical expenses but that they wanted in addition $250 to $550 property damage and court costs including costs of depositions. He said that he felt that if the Frisbys were willing to come off the $8,500 plus offer, he would be willing to go back to Mutual and see if it would be willing to increase the authority it had given him. He said he believed he had a telephone conversation with Mr. Winchester prior to the first trial and he believes, as the trial was nearing, Mr. Winchester authorized him to make an offer of $4,500. He said, as he recalls, Mr. Winchester advised him to see if the offer of $4,500 would be accepted and, if it was not accepted, maybe they could find out what they would come down to. He said that he obtained the impression, however, from Mr. Winchester, that if the case could be settled for $5,000 or $6,000 that Mr. Winchester would have considered authorizing a settlement in that neighborhood. He said that he evaluated the case and in his opinion it was worth $5,500 to $6,000 in settlement value, but that Mr. Winchester never did give him authoritv to go to $6,000. He said that Mr. Winchester did tell him in a telephone conversation to offer $4,500 and if that was refused, and the Frisbys made a counter offer, to call him back and he would see what could be done. He said that he was never given settlement authority in excess of $4,500 and he never made request for authority above that amount, except for his original evaluation.
In Mr. Mays’ letter of January 15, 1969, to Mr. Winchester, he reported that depositions were taken in the case on January 13 and that Mrs. Frisby made a most impressive witness in her own behalf. He advised that she was an attractive and articulate woman who had not exaggerated her injuries but at the same time had not played them down, and he stated:
“Frankly, I was quite impressed with her bearing as a witness and I am afraid she is going to hurt us considerably if the jury finds against us on the issue of negligence.
Your insured, Mr. and Mrs. Blissett, made adequate witnesses although unfortunately they seem to have seen the accident in different ways. However, the inconsistencies in their testimony are not substantial or particularly material.”
Mr. Mays then pointed out in his letter the conflict in the testimony as to how the accident occurred and also advised as to the law on comparative negligence in Arkansas, and then stated:
“However, the jury makes this comparison and reduces the damages, and on a general verdict, we do not know what the jury thought about the comparative negligence of the plaintiff or whether they took this into consideration in affixing the plaintiff’s judgment.”
He then explained to Mr. Winchester the trial court’s reluctance to submit a case on interrogatories as to the degrees of negligence where there are only two parties involved. He then stated:
“In my opinion, the case is one which would be worthy of settlement if it can be done so for a reasonable figure. The plaintiff has offered to settle the case for the sum of $8,500.00 plus $200.00 property damage plus Court costs (including the expenses of the depositions). The plaintiffs apparently have approximately $1,500.00 of direct medical expense, plus an additional $1,500.00 of caretaking expense, transportation expense to doctors, etc. * * * The $8,500.00 figure mentioned above includes these medical expenses.
It is my opinion that the plaintiffs will be agreeable to reducing this offer somewhat and in my opinion we should come up somewhat from the previous offers which have been made. It is my understanding that the highest previous offer of settlement by your company was $4,000.00. This is going to be an expensive suit for both parties to try, due to the number of physicians who are involved, most of whom are not local physicians. Therefore, I would suggest a figure not to exceed $5,500.00 as our top settlement offer.
As soon as I have received the transcripts of the depositions and other medical information, I shall forward them on to you.
I would appreciate having your thoughts on this matter at your earliest opportunity.”
Summarizing the evidence of negligence in this case, Mutual reserved in its contract with Mr. Blissett, the right to investigate and settle claims made against him, and Mr. Blissett was only authorized under the contract to assist in making settlements when requested to do so by Mutual. Before attorneys were employed and suit was filed, the Frisbys asked $5,000 and Mutual offered $3,000. After attorneys were employed and suit was filed, the Frisbys, through their attorney, asked $8,500 and Mutual, through its attorney, offered $4,500. Mutual, through its Dallas home office claims supervisor, carefully selected a competent local trial attorney to represent it and its insured. He made investigation and reported in detail his impression of witnesses on both sides and evaluated the impression they would probably make on a jury and he recommended to Mutual a top settlement figure of $5,500. Instead of authorizing its attorney to offer that amount, or to use his own judgment in the light of his experience and the local situation, Mutual simply increased its reserves to what its claims supervisor considered the case was probably worth but only authorized its attorney to offer a total amount of $4,500.
We are of the opinion that the settlement authority Mutual reserved to itself under its contract with Blissett estopped it from relying on a demand from Blissett that the claim against him be settled within the policy limits, and we are also of the opinion there was enough evidence of negligence on the part of Mutual to take the case to the jury on the question of whether Mutual was negligent in not settling the claim within policy limits.
We hold that the trial court did not err in refusing to direct a verdict for Mutual, but we are of the opinion that the trial court did err in awarding judgment for accumulated interest on the Frisby judgment against Blissett. The substance of our holding on this point in Southern Farm Bureau Cas. Ins. Co. v. Hardin, 233 Ark. 1011, 351 S.W. 2d 153, and Tri-State Ins. Co. v. Busby, supra, is that a suit by an insured against his liability insurance carrier for negligent failure to settle a claim or lawsuit within policy limits, is a separate tort action and a judgment thereon only bears its own interest from the date of its rendition. With this modification the judgment is affirmed.
Affirmed as modified.
Brown and Fogleman, JJ., dissent as to the affirmance. Byrd, J., dissents to the modification: Holt, J., not participating.