American Surety Co. v. BANKERS'SAVINGS & LOAN ASS'N
Decision Date | 26 December 1933 |
Docket Number | No. 9761.,9761. |
Citation | 67 F.2d 803 |
Parties | AMERICAN SURETY CO. OF NEW YORK v. BANKERS' SAVINGS & LOAN ASS'N OF OMAHA, NEB. |
Court | U.S. Court of Appeals — Eighth Circuit |
Matthew A. Hall, of Omaha, Neb. (Raymond G. Young and Laurens Williams, both of Omaha, Neb., on the brief), for appellant.
Clement L. Waldron, of Omaha, Neb. (David O. Mathews, of Omaha, Neb., on the brief), for appellee.
Before GARDNER and VAN VALKENBURGH, Circuit Judges, and DEWEY, District Judge.
This is a second appeal of an action to recover on a fidelity bond issued by appellant to appellee to cover loss to appellee for dishonesty of its secretary, one A. D. Touzalin. At the first trial below the judgment was for plaintiff, appellee here; that judgment was reversed upon the ground that plaintiff had failed to comply with the requirements of the bond, which provided that notice of loss should be given the surety company within ten days after its discovery. The case was remanded "for further proceedings not inconsistent with this opinion." That opinion is found in 59 F.(2d) 577, 580, reference to which is made for a statement of the issues and facts and the rulings thereon. A petition for rehearing was denied. The original pleadings consisted of petition, answer, and reply. Upon the coming down of the mandate, plaintiff moved for leave to amend its reply by adding thereto a new and additional paragraph as follows:
This motion was granted, the amendment was made, and defendant's motion to strike said paragraph 4 was overruled. A jury was waived by stipulation, the court found the issues for the plaintiff, appellee here, and rendered judgment accordingly.
Section 44-322, Compiled Statutes of Nebraska 1929, contains this provision: "The breach of a warranty or condition in any contract or policy of insurance shall not avoid the policy nor avail the insurer to avoid liability unless such breach shall exist at the time of the loss and contribute to the loss, anything in the policy or contract of insurance to the contrary notwithstanding."
This section, taken over by successive revisions from the Revised Statutes of Nebraska 1913, was in force when the bond in suit was executed. Intermediately between the decision of this court on the first appeal and the filing of petition for rehearing, the Supreme Court of Nebraska, October 1, 1931, decided the case of George v. ?tna Casualty & Surety Co., 121 Neb. 647, 238 N. W. 36, 39, in which it construed the foregoing provision of section 44-322, and held, in reference to the failure to give the notice required by contract, that "insurer cannot avoid liability unless it is shown that such breach of condition contributed to the loss," and, further, that "a lack of literal compliance with provisions of the policy is insufficient to avoid liability where it does not contribute to the loss or injure insurer."
This section of the Nebraska Statutes was before this court on the first appeal, and was held not to apply. The case of George v. ?tna Casualty & Surety Co., supra, was brought to the attention of the court in the petition for rehearing, which was denied. While counsel for appellee seek to reargue substantially all the points raised by them on the first appeal, their main reliance is upon the quoted section of the Nebraska statute as construed by the Nebraska court of last resort. Appellant, while not abandoning any of its contentions advanced on the former appeal, emphasizes the language of this court, commanding that further proceedings should be "in conformity with the opinion and judgment of this court," as constituting the "law of the case" and finally determinative of the controversy. We think this matter may be disposed of by confining ourselves to these two main propositions of appellant and appellee.
Under the terms of the indemnity bond in suit, in the absence of an applicable state statute, the requirement that notice should be given the surety company within ten days after the discovery of the loss was a condition precedent to liability on the part of the indemnity company. Imperial Fire Ins. Co. v. Coos County, 151 U. S. 452, 14 S. Ct. 379, 38 L. Ed. 231; St. Louis Architectural Iron Co. v. New Amsterdam Casualty Co. (C. C. A. 8) 40 F.(2d) 344; Home Building & Savings Association v. New Amsterdam Casualty Co. (C. C. A. 8) 45 F.(2d) 989; Odegard v. General Casualty & Surety Co. (C. C. A. 8) 44 F.(2d) 31, 37. And this is generally true whether or not the policy contains a forfeiture provision. St. Louis Architectural Iron Co. v. New Amsterdam Casualty Co., supra, loc. cit. 346 of 40 F. (2d). Such stipulations in insurance contracts, voluntarily entered into, have uniformly been recognized as valid, and are intended to foreclose speculation as to whether the insurer would be able to prevent or minimize loss if prompt notice had been given. Whalen v. Western Assurance Co. (C. C. A. 2) 185 F. 490, 492. Compare Northern Assurance Co. v. Grand View Building Association, 183 U. S. 308, 364, 22 S. Ct. 133, 46 L. Ed. 213. However, "if an insurance company does business in a state it must do so subject to such valid regulations as the state adopts," and "a state may adopt such public policy as it deems best, provided it does not in so doing come into conflict with the Federal Constitution; and, if constitutional, the legislative will must be respected, even though the courts be of opinion that the statute is unwise." Whitfield v. ?tna Life Ins. Co., 205 U. S. 489, 495, 27 S. Ct. 578, 51 L. Ed. 895.
"The character of the covenants of a contract for life insurance depends upon the law of the State where made." ?tna Life Ins. Co. v. Moore, 231 U. S. 543, 34 S. Ct. 186, 58 L. Ed. 356. So also contracts for indemnity insurance. Odegard v. General Casualty & Surety Co. (C. C. A. 8) 44 F. (2d) 31, 37; Northwestern Mut. Life Ins. Co. v. Johnson, 254 U. S. 96, 100, 41 S. Ct. 47, 65 L. Ed. 155. Under this rule, the Nebraska statute limiting the effect of warranties or conditions in contracts or policies of insurance, as construed by the Supreme Court of Nebraska, is controlling, if here applicable.
The phrase "law of the case" has been employed and applied in many decisions of this and other federal courts. Stated generally, the rule is that, "where evidence is substantially the same on both trials, questions of law determined on writ of error or appeal are `law of the case,' both for trial court and appellate court, on second writ of error or appeal." Pennsylvania Mining Co. v. United Mine Workers of America et al. (C. C. A. 8) 28 F.(2d) 851; Thompson v. Maxwell Land-Grant Co., 168 U. S. 451, 18 S. Ct. 121, 42 L. Ed. 539. This rule has been announced and received adherence in many decisions of this court. Finley v. United Mine Workers, 300 F. 972; Federal Reserve Bank v. Omaha National Bank, 45 F.(2d) 511; Page v. Arkansas Natural Gas Corp., 53 F.(2d) 27; City and County of Denver v. Denver Tramway Corp., 23 F.(2d) 287; ?tna Life Ins. Co. v. Wharton, 63 F.(2d) 378; Coffee Co. v. Reid, Murdoch & Co., 60 F.(2d) 387.
In Northern Pacific Railway Co. v. Van Dusen Harrington Co., 60 F.(2d) 394, 397, this court, speaking through Judge Booth, said: ...
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