Hurt v. Pennsylvania Threshermen & Farmers' Mut. Cas. Ins. Co.

• Decision Date: 16 November 1938
• Docket Number: 23.
• Citation: 2 A.2d 402,175 Md. 403
• Parties: HURT v. PENNSYLVANIA THRESHERMEN & FARMERS' MUT. CASUALTY INS. CO. HURT
• Court: Maryland Court of Appeals

2 A.2d 402

175 Md. 403

HURT v. PENNSYLVANIA THRESHERMEN & FARMERS' MUT. CASUALTY INS. CO.

No. 23.

Court of Appeals of Maryland

November 16, 1938

Appeal from Superior Court of Baltimore City; Eli Frank, Judge.

Action by Porter A. Hurt against the Pennsylvania Threshermen & Farmers' Mutual Casualty Insurance Company, on a policy of insurance issued by defendant to plaintiff's employer. From a judgment on a directed verdict for defendant plaintiff appeals.

Affirmed.

Raymond S. Williams and George Cochran Doub, both of Baltimore (R. Lewis Bainder, of Baltimore, on the brief), for appellant.

Roszel C. Thomsen and W. Hamilton Whiteford, both of Baltimore (Walter L. Clark and Webster C. Tall, both of Baltimore, on the brief), for appellee.

Argued before BOND, C.J., and URNER, OFFUTT, PARKE, MITCHELL SHEHAN, and JOHNSON, JJ.

BOND Chief Judge.

The appellant, an exerciser of race horses for a trainer, his employer, was awarded workman's compensation by the State Industrial Accident Commission of Maryland for disability from an injury sustained in the state (Code, art 101), and having failed to obtain payment sued the employer for it, and recovered judgment, under the Speedy Judgment Act of Baltimore City. Charter, sec. 404 et seq. The employer being insolvent, execution failed, and the judgment creditor, the employee, has sought recovery on a policy of insurance issued to the employer by the appellee company. The trial court held that the employer had not, on this policy, obtained insurance against the liability sued on, and accordingly directed a verdict for the company; and the plaintiff employee appeals from the resulting judgment. Only the exceptions to the direction of the verdict are pressed, and they being up only the question of applicability of the policy.

The evidence is that the employer, Lucius P. Harlan, a resident of Hatboro, Montgomery County, Pennsylvania, was engaged in training race horses belonging to his father while they were at race tracks in Maryland, New York and elsewhere, and that he employed the appellant as an exercise boy, and another as groom or rubber. And the accidental injury to the boy occurred in Maryland on April 6, 1937. About a year earlier, the employer, when at the Belmont Park race track in New York, had requested a Miss Yerkes, who was also at the track, to cover his men with insurance. Miss Yerkes was a neighbor and acquaintance of many years who, with a sister, carried on an insurance and real estate business at the place of the employer's residence. A declaration on a filled-in form, attached to the policy as a basis of its issue, but which the employer testified was not in his words, stated only that the 'Location of the Risk' was 'Montgomery County and elsewhere in Pennsylvania.' Miss Yerkes testified that she ordered by telephone insurance 'for Lucius P. Harlan at Idle Dell, Montgomery County, Pennsylvania,' giving the address, and adding that the employees worked at tracks in Maryland, New York and Florida, and were to be covered whereever they were. Admissibility of the negotiations in evidence need not be discussed now. A workmen's compensation policy, so entitled, was obtained from the company now sued on May 7, 1936, and in it the risk was located, in accordance with the declaration, only in Pennsylvania. It had attached to it two riders or endorsements, a 'Standard Pennsylvania Workmen's Compensation Endorsement,' and one entitled 'Endorsement: Employer's Liability,' the latter in these terms:

'One (b) to indemnify this employer against loss by reason of the liability imposed upon him by law for damages on account of such injuries to such of said employees as are legally employed wherever such injuries may be sustained within the territorial limits of the United States of America or the Dominion of Canada. In the event of the bankruptcy or insolvency of this employer the company shall not be relieved from the payment of such indemnity hereunder as would have been payable but for such bankruptcy or insolvency. If because of such bankruptcy or insolvency, an execution against this employer is returned unsatisfied in an action brought by the injured, or by another person claiming by, through or under the injured then an action may be maintained by the injured, or by such other person claiming by, through or under the injured, against the company under the terms of this policy for the amount of the judgment in said action not exceeding the amount of this policy.

'It is hereby understood and agreed between the Company and the employer that the Company's limit under Paragraph One (b) above noted shall be limited to $25,000 as the result of one or more claims arising from a single accident.

'It is also agreed that Paragraph One (b) stated above does not afford insurance with respect to occupational disease.'

There is thus no clause providing the employer with workmen's compensation insurance in terms anywhere except in Pennsylvania, but on behalf of the appellant it is contended that the quoted rider should be construed to extend insurance of that kind to cover an award in Maryland. Some correspondence between the parties seems opposed to that conclusion.

When the policy was issued and forwarded to Miss Yerkes, there followed correspondence concerning the amount of the employer's pay roll and the corresponding compensation insurance premium, an adjustment of the two figures having been reserved ultimately, and concerning the extent of the insurance. The discussion on this latter subject, received in evidence subject to exception, was subsequently stricken out on the plaintiff's motion. In so far as there might be in the terms of the policy any uncertainty in extent of the insurance, it would be admissible as evidence of an interpretation by both parties, Miss Yerkes having acted as agent for the employer. American Fire Insurance Co. v. Brooks, 83 Md. 22, 34 A. 373. Where there is any uncertainty in the terms used, the construction placed upon them by both parties before any controversy has arisen would be an important aid in construction. Citizens' Fire Ins. Co. v. Doll, 35 Md. 89, 107, 6 Am.Rep. 360; Mitchell v. Wedderburn, 68 Md. 139, 145, 11 A. 760; Canal Company's Case, 83 Md. 549, 618, 35 A. 161, 354, 581; Dexter Sulphite Pulp & Paper Co. v. McDonald & Fisher, 103 Md. 381, 391, 63 A. 958; Product Sales Co. v. Guaranty Co., 146 Md. 678, 682, 127 A. 409. Presumably this part of the correspondence was stricken out, as would then be necessary, because the trial court concluded that the written terms of the insurance were free from doubt.

Miss Yerkes, on receipt of the policy from the company's agent in Philadelphia, wrote him on May 27, 1936, 'I note that this covers Livery stable in Montgomery County and elsewhere in Pennsylvania. It was our understanding that this was to cover anywhere in the United States the employees of this particular stable, whether they should be at the track or at 'Idle Dell Farms.' Should the policy be endorsed?' To this the agent, on June 3, 1936, quoted a reply in a letter from the home office of his company: 'This contract like any other policy provides coverage for Montgomery County (the location of the risk) and elsewhere in Pennsylvania. If the assured has out of state work, exceeding ninety consecutive days, it is naturally necessary that he have compensation coverage elsewhere.' And the agent himself added, 'In other words, this policy will cover the assured in the State of Pennsylvania at all times and out of the state for a period not exceeding ninety consecutive days. This is in accordance with the Workmen's Compensation Law, applying to employees who are citizens of the State of Pennsylvania only. We trust this answers your inquiry'. Only compensation insurance was the subject of this discussion. There was no change made as a result of it; no additional insurance was taken out by endorsement or otherwise; the insurance as written was retained. Commercial Casualty Co. v. Schmidt, 166 Md. 562, 571, 171 A. 725; Bitting v. Home Ins. Co., 161 Md. 56, 64, 155 A. 329.

These communications do not show an extension of the insurance beyond the letter of the policy; they rather tend, as stated, to show that there was none, and that the limitation to Pennsylvania was understood. A misunderstanding in the formation of the contract, if there had been one, would not, in an action at common law, even if it would in equity, enable the court to make an alteration of it. The suit is not one for reformation, ignoring now any question whether the employee would be in a position to bring such a suit; and in the absence of an extension by addition of an endorsement as suggested, or otherwise, the intention in the policy as it is must determine the scope of the insurance.

Recurring then to the rider, or endorsement, in which the extension of the compensation...