American Mut. Liability Ins. Co. of Boston v. Tuscaloosa Veneer Co.

• Decision Date: 12 January 1939
• Docket Number: 6 Div. 371.
• Citation: 237 Ala. 187,186 So. 133
• Parties: AMERICAN MUT. LIABILITY INS. CO. OF BOSTON v. TUSCALOOSA VENEER CO. ET AL.
• Court: Alabama Supreme Court

186 So. 133

237 Ala. 187

AMERICAN MUT. LIABILITY INS. CO. OF BOSTON v. TUSCALOOSA VENEER CO. ET AL.

6 Div. 371.

Supreme Court of Alabama

January 12, 1939

Rehearing Denied Feb. 9, 1939.

Appeal from Circuit Court, Jefferson County; W. L. Hogue, Special Judge.

Action in general and special assumpsit by the Tuscaloosa Veneer Company (and the individuals composing the partnership) against the American Mutual Liability Insurance Company of Boston. From a judgment for plaintiffs, defendant appeals.

Reversed and remanded.

London & Yancey and Frederick Koenig, Jr., all of Birmingham, for appellant.

B. F Smith, of Birmingham, for appellees.

BROWN Justice.

General assumpsit on account and for money paid by plaintiffs to defendant's use, and special assumpsit for breach of the conditions of a policy of insurance, wherein the defendant for a consideration, engaged to indemnify and hold the plaintiffs harmless against liability to their employees under the Workmen's Compensation Act, Code 1923, § 7534 et seq.

Counts in special assumpsit added by amendment, aver inter alia "That on towit: the 3rd day of May, 1935, when said policy was in full force and effect, plaintiffs, having performed all the duties and obligations concerning said policy incumbent on them to perform, an employee of plaintiffs' to-wit: Claude Martin, received an injury in the line and scope of his employment with plaintiffs, arising out of his employment, while in the service of plaintiffs in their business covered by the policy constituting a liability under the policy." [ Italics supplied.] The obligations and duties imposed by the policy on plaintiffs and its coverage are not otherwise stated than as above indicated. The italicized averments are purely pleader's conclusion. The demurrer, by specific grounds pointed out these defects. Code 1923, § 9479. The Circuit Court, therefore, erred in overruling the demurrer. Powell v. Life & Casualty Ins. Co. of Tennessee Ala.Sup., 184 So. 899; Worthington v. Davis, Director General of Railroads, 208 Ala. 600, 94 So. 806; Birmingham Ry., Light & Power Co. v. Littleton, 201 Ala. 141, 77 So. 565; Thomas v. Irvine, 171 Ala. 332, 55 So. 109.

The question of controlling importance, and the one upon which the result of this litigation must be determined, is whether or not the policy covers "Woods operation," the work in which the employee Martin was engaged at the time of his injury, the place of his work being located some ten miles or more from the plaintiffs' place of operation disclosed in the "Declaration" attached to and made a part of the policy and limiting its coverage.

The policy is what is known as the "Standard Workmen's Compensation and Employer's Liability Policy" issued on the 17th of December, 1934, in which it is stipulated that the Insurer "Does hereby agree, with this employer, named and described as such in the declarations, forming a part hereof, as respects personal injuries sustained by employees, including death at any time resulting therefrom as follows:

"I (a) To pay promptly to any person entitled thereto, under the workmen's compensation law, and in the manner therein provided, the entire amount of any sum due, and all installments thereof as they become due.

"I (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.

"III To defend, in the name and on behalf of this employer, any suits or other proceedings which may at any time be instituted against him on account of such injuries, including suits or other proceedings alleging such injuries and demanding damages or compensation therefor, although such suits, other proceedings, allegations, or demands are wholly groundless, false, or fraudulent.

"This Agreement is Subject to the Following Conditions:

"Basis of Premium

"A. The premium is based upon the entire remuneration earned, during the policy period, by all employees of this employer engaged in the business operations described in said declarations together with all operations necessary, incident or appurtenant thereto or connected therewith whether conducted at such work places or elsewhere in connection therewith or in relation thereto. * * * If any operations as above defined are undertaken by this employer but are not described or rated in said declaration, this employer agrees to pay the premium thereon, at the time of the final adjustment of the premium in accordance with condition C hereof, at the rates, and in compliance with the rules, of the manual of rates in use by the Company upon the date of issue of this policy. At the end of the policy period the actual amount of the remuneration earned by employees during such period shall be exhibited to the Company, as provided in condition C hereof, and the earned premium adjusted in accordance therewith at the rates and under the conditions herein specified. If the earned premium, thus computed, is greater than the advance premium paid, this employer shall immediately pay the additional amount to the Company, if less, the Company shall return to this employer the unearned portion, but in any event the Company shall retain the minimum premium stated in said declarations.

"C. The Company shall be permitted, at all reasonable times during the policy period, to inspect the plants, works, machinery and appliances covered by this policy, and to examine this employer's books at any time during the policy period, and any extension thereof, and within one year after its final expiration, so far as they relate to the remuneration earned by any employees of this employer while this policy was in force." [ Italics supplied.]

In the " Declarations" are the following limitations of coverage:

"Item 3. Locations of all factories, shops, yards, buildings, premises, or other work places of this Employer, by Town or City, with Street and Number Tuscaloosa, Tuscaloosa County, Alabama, near Southern Railway Station. * * * Minimum Premium for this Policy shall be $87.00 Estimated Advance Premium [[Deposit] $169.37.

"Item 5. This employer is conducting no other business operations at this or any other location not herein disclosed-- except as herein stated. No Exceptions." [ Italics supplied.]

It is familiar law, as well as human experience, that: " 'The parties speak in their contract from the fountain of their mutual knowledge, and if we would properly interpret their words we must put ourselves exactly in their position and know just what they mutually know, with neither addition nor abatement.' Bish. Cont. § 370. It is only by the aid of parol evidence that courts can be certain what were the circumstances under which a contract was made, what was the relation of the parties, and what was within their mutual knowledge." McGhee et al. v....