Bridal Veil Lumbering Co. v. Pacific Coast Casualty Co.

• Decision Date: 26 January 1915
• Citation: 145 P. 671,75 Or. 57
• Parties: BRIDAL VEIL LUMBERING CO. v. PACIFIC COAST CASUALTY CO.
• Court: Oregon Supreme Court

145 P. 671

75 Or. 57

BRIDAL VEIL LUMBERING CO. v. PACIFIC COAST CASUALTY CO.

Supreme Court of Oregon

January 26, 1915

Department 2.

Appeal from Circuit Court, Multnomah County; George E. Davis, Judge.

Action by the Bridal Veil Lumbering Company against the Pacific Coast Casualty Company, on an employers' liability insurance policy to recover the sum of $2,750. The cause was tried before a jury mainly upon a stipulation of the facts. A verdict was rendered in favor of the defendant. From a judgment rendered thereon, the plaintiff appeals. Affirmed.

A. R. Watzek, of Portland (Platt & Platt and Palmer L Fales, all of Portland, on the brief), for appellant. S. C Spencer, of Portland (Wilbur & Spencer, of Portland, on the brief), for respondent.

BEAN, J.

The defendant, a California corporation, engaged in the accident insurance business in the state of Oregon, in consideration of a premium paid by the plaintiff, issued to the latter an employers' liability insurance policy covering the sawmill and other parts of the plaintiff's plant at Bridal Veil, Or., and insuring against loss or expense arising from claims upon it for damages on account of bodily injuries accidently suffered or alleged to have been suffered by any employé of the plaintiff by reason of the prosecution of the work described in the policy. Condition H of the policy, containing an exception, reads as follows:

"This policy does not cover accidents to or caused by any minor employed in violation of law, nor any accident if the insured has not in force a certificate of inspection from the state labor commissioner, or has failed to comply with any law relative to safeguarding machinery and places of work." On February 11, 1912, during the term of the policy, Joe Stricklewich, an employé of the plaintiff at its sawmill and box factory, while working on a lumber flume, in the course of his employment fell from a walkway alongside the flume or trough and was injured. Afterwards the injured man brought an action against the Bridal Veil Lumbering Company to recover damages in the sum of $25,000 for the injuries sustained. The defendant, the Pacific Coast Casualty Company, undertook the defense of the action as required by the terms of the policy reserving, however, all its rights, and refusing to pay any judgment which might be recovered against the Bridal Veil Lumbering Company in that action, upon the ground that the Pacific Coast Casualty Company claimed that under the exception to the policy, above quoted, it was not liable to the lumbering company for any judgment that might be recovered, for the reason that such company was operating its sawmill and plant in violation of law, and that the injury to Stricklewich was caused by the fact that the plaintiff was not complying with the law of the state of Oregon, to wit the Employers' Liability Act, in failing to guard with a railing the walkway from which the employé fell. The plaintiff's sawmill is located some distance from the railroad by which it ships lumber when ready for market. In order to convey the lumber from the sawmill to the point where it can be loaded upon the cars, the company has constructed around the mountain side a large flume or trough into which water is allowed to enter at the sawmill, and the lumber is floated down this flume. It varies in height in different places in its course, and at the particular place where Stricklewich fell and received his injury it was 50 feet above the ground. On the side of the flume a plank walkway had been constructed, evidently intended to be used by employés in doing the work necessary to be done in connection with the plant. There was no hand rail or guard rail on the outside. It was constructed along the edge of the flume in some places one plank in width.

Before the trial of the case an adjustment was made with Stricklewich by which he was paid the sum of $3,750 in full settlement for all claims for damages against the plaintiff on account of the injuries which he had received. Of this amount the Pacific Coast Casualty Company contributed the sum of $1,000, and the Bridal Veil Lumbering Company the sum of $2,750, for which latter amount this action is brought.

It is the claim of the Pacific Coast Casualty Company that the walkway from which Stricklewich fell is one which the Employers' Liability Act requires to be safeguarded by an efficient railing on the outside, and that the failure of the Bridal Veil Lumbering Company to safeguard the walk in order to prevent employés from falling off while using the same in the course of their employment, with the result that Stricklewich fell therefrom, brings the case within the exception named in the policy, and that the insurance company is therefore not liable for any claim for damages because of such failure. The defendant company also pleads and claims that the payment of plaintiff towards the settlement with Joe Stricklewich was a voluntary one and cannot be recovered. Some evidence was introduced, and the stipulation of facts was read to the jury. At the close of plaintiff's case, there being no evidence introduced by the defendant, the latter moved the court for a nonsuit, which was overruled. The defendant then requested the court to instruct the jury to return a verdict in favor of the defendant. This motion was also overruled. The defendant took a cross-appeal and assigns as error the refusal of the court to direct a verdict in defendant's favor.

It is claimed by plaintiff upon this appeal that the defendant has not shown that the loss suffered by plaintiff comes within the exception of the policy of insurance. The defendant has alleged that the loss to the plaintiff comes within condition H of the policy above quoted. Where a policy of insurance covers certain general risks, and in a separate clause of the policy excepts losses resulting from certain causes or under certain circumstances, the burden is on the insurer to allege and prove that the loss was one excepted from the general risk covered by the policy. It is the general rule that the burden is on the insurer to show a loss is within such an exception. 4 Cooley's Briefs on Law Ins. pp. 3179, 3180. This principle has beeen applied in an action on a policy of life insurance in the case of Denver Life Ins. Co. v. Price, 18 Colo. App. 30, 69 P. 313. See, also, Newman v. Covenant Mut. Ins. Association, 76 Iowa, 56, 40 N.W. 87, 91, 1 L. R. A. 659, 14 Am. St. Rep. 196. The same precept holds in accident insurance. Sutherland v. Standard Ins. Co., 87 Iowa, 505, 54 N.W. 453; Martin v. National Livestock Association, 65 Or. 29, 32, 131 P. 511. We are not directed to any case in which this question was passed upon in relation to an employers' liability insurance policy. We think, however, that, if in life, accident, indemnity, and fire insurance the burden is on the insurer to prove that a loss is within an exception, it must follow that the same rule would prevail in an action upon a policy of employers' liability insurance.

In the case at bar the plaintiff contends that the walkway from which Joe Stricklewich fell is not embraced within the provisions of the Employers' Liability Act; that plaintiff was not required to provide such a walk with an efficient safety rail or other contrivance, so as to prevent any person from falling therefrom; and that the defendant has failed to show a noncompliance with the law on the part of the plaintiff. That part of the Employers' Liability Act of 1910 (Gen. Laws Oregon 1911, p. 16), so far as deemed material in this case, is as follows:

"All owners, contractors, subcontractors, corporations or persons whatsoever, engaged in the construction, repairing, alteration, removal or painting of any building, bridge, viaduct, or other structure, or in the erection or operation of any machinery, or in the manufacture, transmission and use of electricity, or in the manufacture or use of any dangerous appliance or substance, shall see that all metal, wood, rope, glass, rubber, gutta percha, or other material whatsoever, shall be carefully selected and inspected and tested so as to detect any defects, and all scaffolding, staging, false work or other temporary structure shall be constructed to bear four times the maximum weight to be sustained by said structure, and such structure shall not at any time be overloaded or overcrowded; and all scaffolding, staging or other structure

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