Attleboro Mfg. Co. v. Frankfort Marine, Acc. & Plate Glass Ins. Co.

• Decision Date: 27 February 1917
• Docket Number: 1254.,1253
• Parties: ATTLEBORO MFG. CO. v. FRANKFORT MARINE, ACCIDENT & PLATE GLASS INS. CO. FRANKFORT MARINE, ACCIDENT & PLATE GLASS INS. CO. v. ATTLEBORO MFG. CO.
• Court: U.S. Court of Appeals — First Circuit

240 F. 573

ATTLEBORO MFG. CO. v. FRANKFORT MARINE, ACCIDENT & PLATE GLASS INS. CO.

FRANKFORT MARINE, ACCIDENT & PLATE GLASS INS. CO. v. ATTLEBORO MFG. CO.

Nos. 1253, 1254.

United States Court of Appeals, First Circuit.

February 27, 1917

On Petition for Rehearing April 11, 1917.

On Petition for Rehearing. [Copyrighted Material Omitted]

Alexander Lincoln, of Boston, Mass. (Sherman L. Whipple and Whipple Sears & Ogden, all of Boston, Mass., on the brief), for plaintiff.

Charles F. Choate, Jr., Choate, Hall & Stewart, Frank W. Knowlton and Robert Hale, all of Boston, Mass., for defendant.

Before DODGE and BINGHAM, Circuit Judges, and ALDRICH, District Judge.

BINGHAM Circuit Judge.

These are writs of error from a judgment in favor of the Attleboro Manufacturing Company against the Frankfort Marine, Accident & Plate Glass Insurance Company, entered in the District Court for Massachusetts, in an action brought to recover damages alleged to have been suffered by the plaintiff through the defendant's negligence.

The Attleboro Manufacturing Company is a corporation engaged in the manufacture of jewelry, at Attleboro, Mass., and on the 8th day of July, 1902, procured from the defendant, the Frankfort Marine, Accident & Plate Glass Insurance Company, an employer's liability policy for the term of one year, from the 11th day of July, 1902, to the 11th day of July, 1903, wherein the defendant agreed to indemnify the plaintiff--

'against loss arising from legal liability for damages on account of bodily injury or death suffered by any employe or employes of the assured resulting from any and every accident of whatsoever nature or cause happening in, upon, or about the premises of the assured; * * * but the liability of the company in respect to any one employe suffering injury or death shall in no case exceed the sum of five thousand dollars ($5,000), nor shall the total liability of the company in respect to any one accident resulting in injury to or the death of several employes in any event exceed the sum of ten thousand dollars ($10,000).'

In furtherance of its obligation to indemnify the plaintiff, the defendant agreed:

'That if any legal proceedings are taken to enforce a claim against the assured, covered by this policy, the company shall, at its own cost, undertake the defense of such legal proceedings in the name and on behalf of the assured, and shall have the entire control of such defense. But if the company shall offer to pay the assured the full amount for which the company is liable in respect to the claim sought to be enforced, it shall not be bound to defend any legal proceedings, nor be liable for any costs or expenses which the insured may incur in defending the same. * * * The company may undertake at its own cost the settlement of any claim, * * * and the assured shall not, except at his own cost, settle any claim nor incur any expense without the consent of the company thereto previously given in writing.'

During the existence of the policy, and on the 28th of January, 1903, an accident occurred to one Hodde while employed in the plaintiff's business at Attleboro. As a result of the accident, an action was brought by Hodde against the Attleboro Company March 31, 1903, in the superior court of Massachusetts, and on January 7, 1907, a verdict having been returned for Hodde, judgment was entered in his behalf for the sum of $17,343.81. January 19, 1907, the Attleboro Company paid the judgment. Thereafter, but prior to May 13, 1911, when the present action was brought, the Frankfort Company paid the Attleboro Company the $5,000, and interest, called for in the policy.

The declaration in the present suit contains three counts. In the first count the plaintiff recites the issuance of the policy and the stipulations therein contained, above set forth. It then alleges the happening of the accident, the assertion of a claim of legal liability, the assumption by the defendant of the defense of the Hodde suit, and the entire and exclusive control thereof; that it was the duty of the defendant--

'in defending said suit to conduct itself with a reasonable degree of care, skill, and diligence commensurate with the duties and responsibility assumed by it, as aforesaid, but that defendant, unmindful of its duty in the premises, so carelessly, negligently, and unskillfully conducted and demeaned itself in the premises that the plaintiff in said suit recovered final judgment against this plaintiff in the sum of $17,343.81, which judgment this plaintiff has been compelled, on writ of execution issued against plaintiff by said superior court, at the instance of said Hodde, to satisfy and pay in full, principal, interest, and costs; that the aforesaid negligence and misconduct of the defendant consisted in this: That defendant, although given by plaintiff timely and ample notice of said accident, claim and suit, negligently failed to make any timely, proper, or intelligent investigation touching the facts and circumstances under which said bodily injuries were sustained by said William Hodde, Jr., whereby material evidence favorable to this plaintiff would, could, and should have been produced at the trial of said suit, was not produced or offered thereat on this plaintiff's behalf; that no intelligent, adequate, or timely preparation was made by the defendant in this suit for the trial of said suit of said William Hodde, Jr.; that competent and legal evidence material to the issues in said suit, and tending to exculpate this plaintiff of liability therein, and which was known, available, and accessible to defendant herein, and which could and should have been produced on this plaintiff's behalf on the trial of said suit, was not produced or offered by defendant; that it was charged by said Hodde in said suit that his said injuries had been caused by the negligence of this plaintiff, as it was alleged, in furnishing said Hodde with a defective and unsuitable pitcher for carrying certain acid, which claim that said pitcher was defective and unsuitable was denied by plaintiff, so that the actual condition of said pitcher became and was one of the vital issues on the trial of said suit; that said pitcher, if it had been offered in evidence on the trial of said action, would have tended strongly to rebut and negative said charge of negligence of said Hodde, and would on said trial have seriously impaired the weight and credibility of the evidence offered on his behalf; that this plaintiff, before the trial of said suit, at defendant's request, delivered into defendant's custody and care the said pitcher, but the defendant, instead of taking care of the same, carelessly and negligently permitted said pitcher to become lost or destroyed, so that it was not and could not be used or offered in evidence in this plaintiff's behalf on the trial of said suit. And plaintiff states that it was by reason of the aforesaid negligence, carelessness, and unskillfulness of defendant in and about the premises that said judgment was rendered against this plaintiff and became final as aforesaid.'

In the second count, after reciting the issuance of the policy and the stipulations therein contained, with reference to the payment of the indemnity, the defense of the suit, and settlement thereof, it was alleged that:

'Thereupon, by the terms of said policy, the defendant acquired the right and it became the defendant's duty either to pay the plaintiff the sum of five thousand dollars ($5,000), the amount of the indemnity provided for in said policy of insurance, or in the alternative, acting in behalf of the plaintiff, to take charge of said claim against the plaintiff and of negotiations for settlement of said claim by way of compromise, and to take entire control of the defense of the suit brought in behalf of said Hodde to enforce said claim'; that 'the defendant elected the alternative, and thereafter did in fact take charge of said claim and of negotiations for settlement thereof, and undertook the defense of said suit'; that 'it entered into various negotiations with said Hodde's counsel and representatives, caused the appearance of its attorneys to be entered in court as attorneys for this plaintiff, entered upon the preparation of the defense of said suit and had entire and exclusive control of said claim and negotiations for settlement thereof and of the defense of said suit throughout the pendency thereof'; that 'it became the duty of the defendant, having undertaken in the plaintiff's behalf, and for a consideration, the exclusive control and management of said claim and the negotiations for settlement thereof, and the defense of said suit to enforce said claim, to conduct itself in respect to such negotiations for compromise and the management of the defense of said claim and suit with a reasonable degree of care, skill and diligence for the protection of the plaintiff's interests, and, among other things, it became the defendant's duty to report to the plaintiff seasonably, in order to permit the plaintiff to act thereon, any offers for settlement of said claim. But the plaintiff says that the defendant was negligent in the performance of the duties which it assumed, and wholly failed in the diligent performance thereof, in that it entirely failed to conduct said negotiations for settlement by way of compromise with reasonable skill and diligence, failed to report to the plaintiff offers of settlement made by said Hodde's representatives in compromise of said claim, whereby the plaintiff might have settled said claim by a reasonable compromise at its own cost; and, furthermore, immediately preceding the trial of said suit, although it was advised that the plaintiff was under a legal liability to said Hodde and

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