Aetna Casualty & Surety Co. v. Quarles

On April 23, 1935, the Aetna Casualty & Surety Company issued to one H. E. Quarles a policy of automobile liability insurance, which was admittedly in effect on January 26, 1936, when his wife, Mrs. Carrie Mae Quarles, was injured while riding in the insured automobile that he was driving. Shortly after the injury she brought an action against him in a South Carolina state court to recover damages in the sum of $5,000 on account thereof. Thereafter, on June 4, 1936, the company filed suit in the court below, alleging that under the policy of insurance it was the duty of Quarles to co-operate with the company in the defense of any suit brought against him which was covered by the policy, that the suit instituted by Mrs. Quarles against her husband was collusive and was an attempt on the part of insured to have his wife obtain a judgment to be enforced against the company under the policy, and that the company had denied liability under the policy and had declined to defend the action for damages or to recognize any liability to the insured on account of her claim. Both the insured and his wife were made parties to the suit, and a declaratory judgment was asked to the effect that the company was not bound to defend the action for damages or to pay any judgment that might be recovered therein.