Ruiz v. Commercial Insurance

83 P.R. 312
CourtSupreme Court of Puerto Rico
DecidedAugust 15, 1961
DocketNo. 12374
StatusPublished

This text of 83 P.R. 312 (Ruiz v. Commercial Insurance) is published on Counsel Stack Legal Research, covering Supreme Court of Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ruiz v. Commercial Insurance, 83 P.R. 312 (prsupreme 1961).

Opinion

Mr. Justice Blanco Lugo

delivered the opinion of the Court-

On April 22, 1955, the Ponce Part of the Superior Court rendered judgment in civil case No. C.S.-53-1737, and, among other pronouncements, it ordered Ramón Ruiz and its insurer Commercial Insurance Company of Newark, New Jersey,, to pay the sum of $1,351.73 to The American Insurance Company of Newark, New Jersey. The insurer paid [314]*314■'•$391.78, thereby complying with its liability under the terms «of a public-liability policy which it had issued in favor of Ruiz with a coverage of $1,000.1 The sum of $960 remained unpaid.

Thereafter Ruiz brought an action under No. C.S.-56-736 of the same court against Commercial Insurance Company, claiming damages caused to his automobile, under the risk covered by policy No. 62-11203-H. As a matter of fact, this policy had been issued by Commercial and another company belonging to the same group, Pacific National Fire Insurance Co., assuming proportionately the risks covered, so that Commercial assumed the risk of the damages caused by Ruiz while operating the insured vehicle — public liability— and Pacific assumed the risk for the damages that might be caused to the said vehicle — collision.

In order to secure by judgment the payment of the balance of the credit amounting to $960 and interest thereon, American obtained an order in case C.S.-53-1737, directed to Ramón Ruiz and his insurer Pacific, to withhold the said amount2 out of any sum which the latter would be bound to [315]*315pay to the former under the terms of policy No. 62-11203-H. This order was duly served on Pacific and Ruiz.3 As we have seen, Ruiz did not join the Pacific as a defendant, which was the company which had assumed the risk of collision under the insurance contract, but through inadvertence directed his action against Commercial. However, Ruiz and Commercial agreed on a stipulation that judgment be rendered for the sum of $2,900. On December 11, 1956, the court, pursuant to the terms of the stipulation, rendered judgment in favor of Ruiz for the aforesaid sum. The same day judgment was rendered, one of the attorneys for Commercial, who was also attorney for Pacific, because both companies belonged to the same group of insurers and had in Puerto [316]*316-Rico the same agent — Insular Underwriters Corporation— -informed by telephone one of the attorneys for American that he proposed to deposit the amount of the judgment in the office of the clerk of the court. He also notified by telegraph the other attorney for American, who had offices in Ponce. The attorney for Commercial and Pacific prepared a motion on December 11, which he sent by mail to the office of the clerk of the Superior Court, Ponce Part, in which he made reference to the writ of garnishment which had been served on him and to the notice which he had given to the attorneys of American of his intention to deposit in the office of the clerk the amount of the judgment. In that motion he moved the court “to admit the check which he had deposited in the office of the ■clerk together with this motion4 in full payment of the amount of the settlement in this case.” It appears that this motion was received and filed at 4:20 p.m. of December 12. On that same day of December 12, evidently before the motion for deposit was filed, Ruiz’s attorney filed a motion for deposit and withdrawal of funds in which he set forth that “the defendant has delivered to the plaintiff a check for the said sum of $2,900, in payment of the judgment, but the check was made payable to the order of the Clerk of this Court,” and requested that the cheek be received and that another be issued in its stead to the order of the plaintiff for the aforesaid amount. It was so ordered. In this way Ruiz withdrew the full amount of the judgment, thereby ignoring the rights which American might have secured by virtue of the writ of garnishment which had been legally served, Armour Fertilizer v. Ramírez, 52 P.R.R. 521 (1938), particularly where there is no controversy as to the fact that, [317]*317although the deposit was made by Commercial, the funds belonged to Pacific, which was the only one liable for the payment of the judgment pursuant to the insurance policy.

As we have already said, Commercial filed a motion in case C.S.-56-736 to accept the $2,900 check in full payment of the judgment. In the meantime, American filed a motion in case C.S.-53-1737, within which it had obtained an order to secure the effectiveness, summoning Pacific to show cause why it should not be held liable for the payment of the sum which it was ordered to withhold. Both motions were heard jointly. On the day set for the hearing, Pacific appeared and alleged that it had been relieved from responsibility from the moment it notified the attorneys for American that it proposed to deposit the full amount of the judgment. It assumes the same position before this Court upon stating in its brief that “there is no doubt that the attachment levied by American Insurance Company was a valid attachment, but the latter, through its attorneys, learned that an error had been committed when the Commercial Insurance Company answered the complaint filed by Ramón Ruiz, and that it was notified in time that the sum stipulated by the parties was going to be deposited and finally that it was deposited in the office of the clerk of the Superior Court of Ponce. The appellant (American) had an opportunity to intervene promptly in the case, but failed to do so.” The trial court held that Pacific “complied with the order of the court by depositing the full amount of the judgment rendered on December 11, 1956, and that it was not liable to the appearing party herein (American) because the latter had not been paid the sum due to it.” Appeal was taken from this judgment.

Reversal is in order.

A brief examination of the order to secure effectiveness directed to Pacific shows that it was expressly required, through its agent, to withhold the amount due Amer[318]*318ican. Since there was no contingency or condition on the existence of liability on the part of Pacific under the policy, and the controversy was confined to the measure of damages, no objection could be interposed to the enforcement of the writ of garnishment. General Acc. Fire & Life Assur., Corp. v. Mitchell, 259 P.2d 862 (Colo. 1953); Rodenkirk v. State Farm Mutual Automobile Ins. Co., 60 N.E.2d 269 (Ill. 1945); Allor v. Dubay, 26 N.W.2d 772 (Mich. 1947); cf. Water Resources Authority v. Irizarry, supra; Garnishment —Provisions in Insurance Policies Prohibiting Assignments, 6 Rutgers L. Rev. 619 (1952). It is clear that it obtains no relief from this obligation merely by depositing in the office of the clerk of the court the full amount of the judgment and notifying this fact to the attorneys for American. The general rule on this matter is that the creditor who attaches property of his debtor in the hands of a garnishee subrogates himself to the rights of the latter. In re Boyd’s Estate, 146 A.2d 816 (Pa.

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Bluebook (online)
83 P.R. 312, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ruiz-v-commercial-insurance-prsupreme-1961.