American Sur. Co. of N.Y. v. City of Clarksville

• Decision Date: 11 July 1958
• Parties: , 204 Tenn. 67 AMERICAN SURETY CO. OF NEW YORK, Appellant, v. CITY OF CLARKSVILLE, Tennessee, et al., Appellees.
• Court: Tennessee Supreme Court

Page 509

315 S.W.2d 509

8 McCanless 67, 204 Tenn. 67

AMERICAN SURETY CO. OF NEW YORK, Appellant, v. CITY OF CLARKSVILLE, Tennessee, et al., Appellees.

Supreme Court of Tennessee.

July 11, 1958.

Daniel & Harvill, Clarksville, Manier, Crouch & White, Nashville, for appellant.

James C. Cunningham, Clarksville, for appellees.

SWEPSTON, Justice.

This is a suit for a declaratory judgmen filed by the American Surety Company of New York against the City of Clarksville, the members of the Board of Education of Clarksville, the Administrator and the distributees of the estate of Misher H. Cunningham, Jr., deceased, and the Travellers Insurance Company.

The complainant seeks a declaration of its rights under certain insurance policies issued to the City of Clarksville and its Board of Education with particular reference to its rights and duties under said insurance policies because of (1) a petition for Workmen's Compensation and (2) a suit at common law by reason of the death of the said Misher H. Cunningham, Jr.

During the argument of this case, some of the members of the Court expressed some doubt as to whether or not this suit might be premature but counsel for appellant has submitted a comprehensive brief which convinces us that the suit is properly maintainable at this time.

There is no issue of fact involved. On the 13th day of April, 1953, complainant issued to the City of Clarksville a standard Workmen's Compensation and Employer's Liability policy containing the two separate items of coverage (a) coverage for actions brought against the insured under the Workmen's Compensation Act, T.C.A. § 50-901 et seq., and (b) actions brought against the insured alleging common law employer's liability. As to the second coverage, i. e., (b) the policy contained an exclusion to the effect that it did not cover actions brought by employes other than legally employed persons.

The Travellers Insurance Company is named a defendant because it also issued a standard Workmen's Compensation and Employer's Liability policy to the Board of Education of the City of Clarksville.

Also, on April 13, 1953, complainant issued to the City of Clarksville a standard form of Comprehensive General Liability policy and on May 5, 1953, the complainant issued to the Clarksville Board of Education a standard form of Comprehensive General Liability policy. By these two policies complainant obligated itself to pay on behalf of the insured all sums which the insured should become obligated to pay by reason of the legal liability imposed upon assured by law for damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person or persons and caused by accident, to pay property damage liability, to perform various investigations, and to conduct the defense of any actions brought against the insured arising out of accidents covered by the policy provisions.

The above policy issued to the City of Clarksville contained, among other exclusions, the following:

'(c) Under coverage (a), except with respect to liability assumed under contract covered by this policy, to bodily injury or to sickness, disease or death of any employe of the insured while engaged in the employment of the insured, or to any obligation for which the insured or any company as his insurer may be held liable under any Workmen's Compensation Law;'

The policy issued to the Board of Education contained, among others, the following exclusion:

'(c) Under coverage (a) except with respect to liability assumed under contract covered by this policy, to bodily injury to or sickness, disease or death of any employe of the insured while engaged in the employment of the insured, other than a domestic employe whose injury arises out of the maintenance or use of an automobile covered by this policy while such employe is not engaged in the operation, maintenance or repair thereof, or to any obligation for which the insured or any company as his insurer may be held liable under any Workmen's Compensation Law;'

The stipulation shows that during the years 1951-1953, the City of Clarksville had undertaken an extensive building program for the City schools, which included the construction of new buildings and the enlargement of existing buildings, as a result of which the grounds of the school were pretty well torn up. As soon as school was out for the 1953 summer vacation and sometime prior to the 6th day of July, 1953, Misher Cunningham, Jr., a 14-year old boy was employed by the Board of Education to attend the water sprinklers and pick up loose objects on the ground at the various landscape projects, for which he was to receive $21.00 per week and said amount was paid to him until his death on the 6th day of July, 1953, when he was struck by lightning while performing his duties in accordance with the terms of employment by the Board of Education on behalf of the City of Clarksville. No employment certificate was obtained either by the City of Clarksville or the Board of Education for the employment of this boy.

As indicated above, his mother and father filed a petition in the Circuit Court of Montgomery County for a Workmen's Compensation award by reason of the employment of their son. His father also filed a suit in the Circuit Court seeking damages for the wrongful death of said Misher H. Cunningham, Jr., averring that he was an employe of the City of Clarksville and Board of Education and that defendants were negligent in failing to provide him with a safe place in which to work and as a second ground of liability that he was employed in violation of the Child Labor statute.

The Travellers Insurance Company simply joined in the request for a declaration of rights.

The complainant averred that it was anxious to perform its duties under said policy contracts but that it was placed in the position of determining at its peril whether it provided coverage under any of said policies and was obligated to defend any such suits, suggesting that the Court declare that complainant was not obligated to furnish coverage under either the Comprehensive Liability policies or Workmen's Compensation and Employer's Liability policy or to defend the suit of the Administrator.

The answer of the Cunninghams denied the complainant's contention that there was no coverage under the Comprehensive Liability policies because the said Misher H. Cunningham, Jr., deceased, was (1) merely an occasional, incidental or casual employe, and not a continuous or regular employe, and was (2) employed in violation of the Child Labor Laws of the State, and being an infant without capacity in general to make or enter into any express contract of employment, and, therefore, would not be covered under the Workmen's Compensation and Employer's Liability policy.

The answer of the City and the Board of Education simply denied that there was no coverage under these policies.

The Chancellor decreed that neither the complainant nor the Travellers Insurance Company was obligated to afford coverage under their Workmen's Compensation and Employe's Liability policies because the said Misher H. Cunningham, Jr., was illegally employed in violation of the Child Labor Laws of the State and was, therefore, not a legal employe as contemplated and covered by the terms and provisions o said policies; but that complainant was bound and obligated to furnish coverage under the Comprehensive Liability policies...