Empire State Sur. Co. v. Northwest Lumber Co.

• Citation: 203 F. 417
• Decision Date: 24 February 1913
• Docket Number: 2,184.
• Parties: EMPIRE STATE SURETY CO. v. NORTHWEST LUMBER CO.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

203 F. 417

EMPIRE STATE SURETY CO. v. NORTHWEST LUMBER CO.

No. 2,184.

United States Court of Appeals, Ninth Circuit.

February 24, 1913

This is an action instituted by the Northwest Lumber Company against the Empire State Surety Company to recover on a policy of liability insurance. The lumber company prevailed, and the surety company prosecutes a writ of error in this court.

The policy of insurance upon which the action is prosecuted contains the following clause: 'Assured on the occurrence of an accident in respect of which claim can be made under this policy shall at once given written notice thereof to the company at New York or to the company's duly authorized agent. Assured shall give like notice with full particulars of any claim made on account of an accident so reported, and if steps are taken to enforce such claim by suit or otherwise, assured shall also deliver to the company all papers and information pertaining thereto immediately upon receipt thereof, whereupon the company shall at its own cost undertake on behalf of and in the name of assured the settlement of such claim or the defense of such suit and the prosecution of any appeal which it may undertake.'

The lumber company was engaged in getting out logs, and had a crew of men working under a foreman named Dan Williams. Among the crew was one John Hall, who was injured, in that his leg was broken. This occurred November 4, 1908. Hall instituted an action against the lumber company in the superior court of the state of Washington to recover. He served summons and a copy of the complaint therein October 26, 1909, and later recovered judgment for $10,000.

Trial was had in the case at bar before a jury. When the testimony was fully submitted, the court was requested to direct a verdict of nonsuit, which was denied. The testimony given at the trial, so far as pertinent, is contained in the bill of exceptions, which recites:

'That on the 4th day of November, 1908, one John Hall, an employe of the plaintiff, who came within the terms of the policy working in one of the three logging and loading camps maintained by the plaintiff at or near Kerriston, Wash was injured by having his leg broken, and that he was there working under Dan Williams, a foreman of the gang of camp where the said Hall was injured, all being foreigners and speaking the English language very little. That the company maintained three logging camps for getting out logs and loading the same on cars, a general sawmill plant where it operated its mills, or did its sawing, and a logging railroad for carrying lumber and logs, and that over all was a superintendent named John McRea, who had general charge and control of all the affairs at Kerriston, Wash., and general affairs of the plaintiff were in charge of its general secretary and treasurer, L. G. Horton, at Seattle. That about 11 months after the injury the said John Hall brought an action for damages in the superior court of King county, Wash., which was prosecuted, and a judgment recovered in the sum of $10,000, which cause was afterwards appealed to the Supreme Court of the state, and there affirmed, and thereafter with the costs paid by the plaintiff. That the plaintiff's superintendent aforesaid and the secretary testified that, until suit was brought by said Hall, they had no personal knowledge of the occurrence of the accident whereby the said John Hall was injured, the other officers of the company having no knowledge of the affair, and made no report thereof to the defendant, or any agent thereof, and gave no notice of the accident or anything pertaining thereto, until the service of the summons and complaint in the case brought by Hall in said superior court on the 26th day of October, 1909, whereupon notice was at once given to defendant, and, when the notice was given, the defendant reserved its right in an agreement made between the parties to this action regularly introduced in evidence as exhibit . . ., which agreement is as follows:

"Nov. 15th, 1909.

"Northwest Lumber Company, White Building, Seattle, Wash.

"Gentlemen:-- In regard to the case of Hall against you pending in the superior court of this county on summons and complaint served Oct. 26th last, I beg to say that in accordance with our understanding I will defend this action as the representative of the Empire State Surety Company, but with the understanding that it will not prejudice your rights, or that of the surety company, respecting the matter as to whether notice of this accident has or has not been given. The matter of notice referred to in the policy which you hold insuring you will be a matter of future adjustment, and without in any way affecting my appearance as attorney in the case or your consenting to my appearance as your attorney in this case and upon the record.

"If this is agreeable to you, please indicate it by your approval hereon, and that will be satisfactory to all parties.

"Yours very truly,

(Signed) John P. Hartman.

"The foregoing is read and approved the date first herein stated.

"(Signed) Northwest Lumber Co., G. B. Barclay,

Pres.'

-- and the said agreement had not been thereafter altered or amended at any time. That after the accident to the said John Hall, whose leg was broken, he was taken in charge by the said foreman, Dan Williams, and from there conveyed first upon the logging road to a railroad, and thence to a hospital in Seattle, about 40 miles distant from the place where the accident occurred, and all being in King county, Wash., in which hospital he remained about 11 months. Thereupon the defendant offered testimony tending to show that it had no knowledge or information in any way of the accident to John Hall occurring November 4, 1909, until after the service of summons and complaint in his case as aforesaid. That because it did not have immediate notice of the accident it was greatly prejudiced and damaged, in that it could not prepare for the trial of the case, as it was bound to under the terms of the policy if notice was immediately given, that it was unable to prepare to defend and defend the case and to obtain testimony, and that prejudice resulted against the defense because of the want of notice, all of which the witness claimed was prejudicial to the interests of the defendant, and all of which the witness claimed was caused by want of compliance with the terms of the policy insuring against loss, for which this suit is brought, and upon cross-examination plaintiff showed that all eyewitnesses were at the trial for Hall save one, whose whereabouts was unknown, which trial was held in the state court of Washington about April 11, 1910, which witness were all called for the said Hall.'

John P. Hartman, of Seattle, Wash., for plaintiff in error.

George Donworth, Ovid A. Byers, Alpheus Byers, and Elmer E. Todd, all of Seattle, Wash., for defendant in error.

Before GILBERT and ROSS, Circuit Judges, and WOLVERTON, District judge.

WOLVERTON District Judge (after stating the facts as above).

The question is presented upon this record whether the court should have determined as matter of law that notice was not given by the lumber company to the surety company as required by...