Southern Ry. News Co. v. Fidelity & Cas. Co. of New York

• Decision Date: 09 December 1904
• Parties: SOUTHERN RY. NEWS CO. v. FIDELITY & CASUALTY CO. OF NEW YORK.
• Court: Kentucky Court of Appeals

83 S.W. 620

SOUTHERN RY. NEWS CO. v. FIDELITY & CASUALTY CO. OF NEW YORK.

Court of Appeals of Kentucky.

December 9, 1904

Appeal from Circuit Court, Jefferson County, Chancery Division.

"Not to be officially reported."

Action on a policy of indemnity by the Southern Railway News Company against the Fidelity & Casualty Company of New York. From a judgment for defendant, plaintiff appeals. Reversed.

Barnett & Barnett and Chas. F. Taylor, for appellant.

Forcht & Field, for appellee.

O'REAR J.

The appellant, the Southern Railway News Company, is a corporation engaged in the sale and supplying of books newspapers, periodicals, refreshments, and other articles and goods on railways, stages, steamboats, and other conveyances in the United States, and along the lines or ways of same. The appellee, the Fidelity & Casualty Company of New York, is a corporation engaged in the issuing of policies of insurance, insuring employers against liability for injuries to persons in their employment.

On February 11, 1890, appellee issued to appellant an employer's liability insurance policy, in consideration of $150 premium, insuring the news company for one year against injuries to its employés, for which it might become liable in damages, subject to the limitation that its liability should not be more than $5,000 in respect to an accident which would cause the death or injury of any one person. If any legal proceedings should be taken against the insured to enforce a claim for indemnity for such injuries, the insurer engaged at its own cost and expense to have the absolute conduct and control of defending the same throughout in the name and on behalf of the insured; but, if the insurer should offer to pay the insured the full amount insured, then it should not be bound to defend the case, nor be bound for any costs and expenses which the insured might incur in defending it. It is also agreed that, upon the occurrence of an accident in respect of which a claim might arise, notice thereof should be immediately given to the insurer at its office in New York, and appellant should furnish full information in relation to it. The period covered by the policy, it was agreed, was fixed on the assumption that the amount of the estimated yearly pay roll to the employés of the insured would not exceed $30,000, and the premium paid was based on that amount. "Therefore, as soon as the said amount of wages shall have been paid, this policy shall terminate as if the said period had expired, unless it shall have been continued for a further period by the payment and acceptance of a further premium in respect thereof." The insurer's officers were granted the right at any reasonable hour to inspect the books of the insured, so far as they related to the wages paid to its employés. The seventh clause of the agreement reads thus: "The company shall not be liable to a suit in any court for the recovery of a claim under this policy, unless the same is commenced within two years after the accident, which is the cause of action, has occurred."

On December 28, 1889, about two months previous to the date of the above-named policy, appellant entered into a written contract with the Kansas City, Memphis & Birmingham Railroad Company, by which the railroad company, in consideration of a stipulated sum, granted to the news company the privilege of selling upon its regular passenger trains during the year beginning January, 1890, periodicals, newspapers, books etc., under certain conditions and regulations therein set out, including the following: "In consideration of the foregoing grant and the privileges therein specified, said news company releases said railroad company from any right of action, claim, or demand which may accrue to it by reason of the loss of any of its property while being transmitted on any of the trains of the railroad company under the terms of the contract, and further agrees, for such consideration, to indemnify said railroad company and save it harmless from all claims, demands, damages, actions, costs, and charges to which the railroad company may be subject, or which it may have to pay, by reason of any injury to any person or property, or loss of life or property, suffered or sustained by any agent or employé of the news company while in, upon or about any of the stations, platforms, cars, or other premises of the railroad company, whether such injuries or loss arise from the negligence of the employés of said railroad company, or otherwise."

Under that contract the railroad company carried the news company's agents upon its trains, including one George W Davis, who in the course of his employment as news...