Conqueror Zinc & Lead Co. v. Ætna Life Ins. Co.

• Decision Date: 03 January 1911
• Parties: CONQUEROR ZINC & LEAD CO. v. ÆTNA LIFE INS. CO.
• Court: Missouri Court of Appeals

133 S.W. 156

152 Mo. A. 332

CONQUEROR ZINC & LEAD CO. v. ÆTNA LIFE INS. CO.

Springfield Court of Appeals. Missouri.

January 3, 1911.

1. INSURANCE (§ 597) — INDEMNITY INSURANCE — CONTRACTS — CONSTRUCTION.

The obligation of an insurer in a policy of indemnity against liability becomes fixed when liability attaches to insured, but the obligation of an insurer in a policy of indemnity against loss does not attach until loss has been suffered by insured paying the damages awarded against him.

2. INSURANCE (§ 598) — INDEMNITY INSURANCE — CONTRACTS — CONSTRUCTION.

The obligation of an insurer issuing a policy to indemnify insured against loss from common-law or statutory liability for injuries to employés does not become fixed until insured has paid the judgment rendered against it for injuries to an employé, and insured may not recover interest on the judgment for time between date thereof in circuit court and its affirmance by the Supreme Court.

3. INSURANCE (§ 513) — INDEMNITY INSURANCE — CONTRACTS — CONSTRUCTION.

An indemnity policy giving insurer absolute control of actions against insured, requiring it, at its own cost, to defend actions, unless it elected to pay to insured the indemnity provided for, made insurer liable for all costs occasioned by unsuccessfully defending an action against insured for a liability within the policy.

4. CONTRACTS (§ 154) — CONSTRUCTION.

The court will not give a contract such a construction as will permit one party to secure an unreasonable advantage over the other party, unless compelled to do so by the language of the contract.

Appeal from Circuit Court, Jasper County; Henry L. Bright, Judge.

Action by the Conqueror Zinc & Lead Company against the Æna Life Insurance Company. From a judgment granting insufficient relief in favor of plaintiff both parties appeal. Affirmed.

Perkins & Blair, for plaintiff. Spencer, Grayston & Spencer, for defendant.

COX, J.

This is an action upon an indemnity insurance policy issued by the defendant to plaintiff, to indemnify it against damages which it might sustain by reason of injury to its employés. Mack S. Phelps was injured while in the employ of plaintiff, and on October 24, 1905, recovered judgment in the circuit court of Jasper county for $7,500 and costs, by reason of said injury. This judgment was affirmed by the Supreme Court February 25, 1909. On April 26, 1909, the plaintiff paid the Phelps judgment, and, at that time, paid the face of the judgment, $7,500, and the further sum of $1,575, interest thereon from date of its rendition in the circuit court to the date of payment, and $178.05 costs; then made demand upon defendant for reimbursement. On July 9, 1909, the defendant paid the plaintiff $5,061.65, being the maximum liability, as it claimed, under its policy of insurance and interest thereon from the date that plaintiff paid the judgment against it. July 22, 1909, the plaintiff filed this suit, seeking thereby to recover the interest on the judgment paid by it and the costs of the suit. Trial by the court upon an agreed statement of facts, and the court rendered judgment in favor of plaintiff for the costs, $186.65, but refused to allow the plaintiff for interest paid upon the judgment prior to the date of its affirmance by the Supreme Court. Both parties have appealed from this judgment.

The questions to be decided here are: First, whether the defendant insurance company was, under its policy, liable for interest upon the Phelps judgment from the date of its rendition in the circuit court, or whether its liability for interest began on the date of the affirmance of that judgment by the Supreme Court; second, whether or not the defendant is liable for the payment of the costs in the Phelps suit.

The policy issued by defendant to plaintiff in this case limited its liability for injuries to one person to the sum of $5,000. It will thus be seen that the recovery against plaintiff by the party injured was greater than the defendant's liability under its policy. The provisions of the policy necessary to notice here are as follows:

The company "does hereby agree to indemnify the Conqueror Zinc & Lead Company of Joplin, the assured, for the period of twelve months, beginning on the 17th day of January, 1904, * * * subject to the following special and general agreements which are to be construed as co-ordinate, as conditions: Against loss from common-law or statutory liability for damages on account of bodily injuries, fatal or nonfatal, accidentally suffered within the period of this policy by an employé or employés of the assured," etc.

"Special Agreements.

"(A) The company's liability for an accident resulting in injuries to one person is limited to five thousand dollars."

"General Agreements.

"(1) The assured upon the occurrence of an accident shall give immediate written notice thereof, with the fullest information obtainable at the time, to the home office of the company at Hartford, Conn., or to its duly authorized local agent. He shall give like notice with full particulars of any claim that may be made on account of such accident, and shall at all times render to the company all co-operation and assistance in his power.

"(2) If thereafter any suit is brought against the assured to enforce a claim for damages on account of an accident covered by this policy, the assured shall immediately forward to the company every summons or other process as soon as the same shall have been served on him, and the company will at its own cost, defend against such proceeding in the name and on behalf of the assured, or settle the same, unless it shall elect to pay to the assured the indemnity provided for in clause A of Special Agreements as limited therein.

"(3) The assured shall not settle any claim except at his or its own cost, nor incur any expense, nor interfere in any negotiations for settlement or in any legal proceeding, without the consent of the company previously given in writing; but he may provide at the time of the accident such immediate surgical relief as is imperative. The assured, when requested by the company, shall aid in securing information, evidence, and the attendance of witnesses and in effecting settlements and in prosecuting appeals."

"(7) No action shall lie against the company as respects any loss under this policy unless it shall be brought by the assured himself to reimburse him for loss actually sustained and paid by him in satisfaction of a judgment within sixty days from the date of such judgment and after trial of the issue."

The question as to when defendant became liable for interest depends upon when it became liable to pay the plaintiff. The judgment having been more than the maximum liability provided for by the policy, the defendant would not be responsible for interest, even though interest might have been paid by the plaintiff, until defendant's liability to plaintiff became fixed. The contention of defendant is that its liability did not become fixed until the judgment of the circuit court was affirmed by the Supreme Court; while the plaintiff contends that it became liable when the judgment was rendered by the circuit court. We must determine this question by the terms of the policy of insurance, which is the contract between the parties.

There is a distinction between contracts of indemnity against loss and contracts of indemnity against liability. In the latter case, the obligation of the insurance company becomes fixed when liability attaches to the insured. In the former case, the insurance company does not become liable until loss has been suffered,...