Employers' Liability Assur. Corp., Ltd., of London, England v. Morrow

• Decision Date: 23 February 1906
• Docket Number: 1,468.
• Citation: 143 F. 750
• Court: U.S. Court of Appeals — Sixth Circuit
• Parties: EMPLOYERS' LIABILITY ASSUR. CORP., LIMITED, OF LONDON, ENGLAND, v. MORROW.

143 F. 750

EMPLOYERS' LIABILITY ASSUR. CORP., LIMITED, OF LONDON, ENGLAND, v. MORROW.

No. 1,468.

United States Court of Appeals, Sixth Circuit.

February 23, 1906

Walter Stokes and E. W. Strong, for plaintiff in error.

James C. Bradford, for defendant in error.

Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.

LURTON Circuit Judge.

This is an action upon a contract of insurance against accident. Under the general liability clause the American corporation insured the defendant in error, Dr. William Morrow 'against bodily injuries within the meaning of this policy, caused by external, violent and accidental means during the period covered by this policy, subject and according to the agreements and conditions herein contained which are to be considered as conditions precedent, in the principal sum of ten thousand dollars. ' Among the so-called agreements and conditions referred to in the general liability clause set out, which are supposed to be applicable in the present controversy, are clauses C, E, G and M, which are as follows:

'(C) If such injuries alone within ninety days result in the loss by actual separation, of one entire hand or one entire foot, the corporation will pay one-half the principal sum aforesaid, on surrender of this policy.

(E) If such injuries shall not be fatal and are not as described in clause B, C, or C, but shall alone result in the assured being immediately and wholly disabled, and he shall thereby be prevented from transacting any and every kind of business pertaining to his occupation, then so long as the assured shall be so disabled, not exceeding two hundred consecutive weeks in respect of any one accident, the corporation will pay the sum of fifty and 00/100 dollars per week.

'(G) If such injuries alone are sustained while riding as a passenger in or upon a public conveyance propelled by steam, electricity or cable, or while being a passenger within an elevated car provided for passenger service only, then the amount payable under clauses A, B, C, D, E, or F, shall be doubled, provided that no payment so made for weekly indemnity shall be in excess of the money value of the assured's time, and provided also that the addition of five per cent. named in clause A shall not be calculated on double the principal sum assured.

'(M) If the assured is injured in any occupation or exposure classed by this corporation as more hazardous than that herein given, his insurance and weekly indemnity shall be only for such amounts as the premium paid by him will purchase at the rate fixed for such increased hazard. No claim for indemnity in excess of the money value of the assured's time shall be valid. If the assured carries insurance, either in this or other companies or associations, or both, making an aggregate weekly indemnity in excess of the money value of his time, then (except in the case of a claim consequent on the death of the assured or loss of the sight of both eyes or the loss of two entire limbs), this corporation shall be liable for only such proportion of this insurance for weekly indemnity, fixed indemnity or otherwise, as such money value of his time shall bear to the aggregate of the weekly indemnity of the entire insurance so held by him.'

The case was submitted to the jury upon an agreed statement of facts. The only facts having any bearing upon the interpretation of the contract are these: (1) Dr. William Morrow, the plaintiff below, while traveling as a passenger upon a public conveyance, sustained an injury through violence by which he suffered the loss of an arm within 90 days. He made full proof of loss as required, but payment was refused. He was at the time the holder of the policy in suit and of another of like terms, except that the second had no clause similar to clause M, in the Maryland Casualty Company. (2) His weekly income at the time of the accident was $75 from his occupation, which was that of a real estate agent. Upon the agreed statement of facts the court instructed the jury to return a verdict for the plaintiff for $10,000, with interest from the time the payment was due and owing under the contract. The principal sum for which the American association was liable was $10,000. For the loss of an arm they were liable to pay one-half the principal sum under clause C; but, if the loss, as in this case, occurred while traveling as a passenger in a public conveyance, the agreement was, under clause G, to pay double the amount due under other circumstances.

Thus far the contract was plain, so plain that there was no room for controverting a liability for a principal sum of $10,000. But the insistence of the insurer was that the principal sum thus confessedly payable under the general liability claim and clauses C and G of the agreements and conditions should be cut down from $10,000 to $3,750 through the operation of clause M. For convenience we again set out this clause, as the case must turn upon its meaning:

'If the assured is injured in any occupation or exposure classed by this corporation as more hazardous than that herein given, his insurance and weekly indemnity shall be only for such amounts as the premium paid by him will purchase at the rate fixed for such increased hazard. No claim for indemnity in excess of the money value of the assured's time shall be valid. If the assured carries insurance, either in this or other companies, or associations, or both, making an aggregate weekly indemnity in excess of the money value of his time, then (except in the case of a claim consequent on the death of the assured or loss of the sight of both eyes or the loss of two entire limbs), this corporation shall be liable for only such proportion of this insurance for weekly indemnity, fixed indemnity or otherwise, as such money value of his time shall bear to the aggregate of the weekly indemnity of the entire insurance so held by him.'

The construction of this clause insisted upon by the plaintiff in error is best shown by the request made for an instruction, which was in these words:

'From the agreed statement of facts in this case it appears (1) that the money value of plaintiff's time, or his income, was $75 per week; (2) that under this policy in suit plaintiff was entitled to receive from this defendant $100 per week as indemnity; (3) that under the policy held by the plaintiff in the Maryland Casualty Company was entitled to receive from said company the sum of $100 per week; (4) that the total weekly indemnity to be received by the plaintiff from both companies was $200 per week. The court therefore instructs you that, inasmuch as the money value of plaintiff's time was but 37 1/2 per cent. of the aggregate weekly indemnity to be received from both companies, the plaintiff in this action, if he recover at all, is entitled to recover as a principal sum only 37 1/2 per cent. of $10,000, or $3,750.'

This was denied and the action of the court in so refusing to interpret clause M presents the single question to be decided. No question of weekly indemnity for a disability, either total or partial, arises under this contract and the facts of this case. Under clause E of the contract the insurer agreed to pay, in case of an injury not fatal and not resulting in the loss of one or more eyes, or one or more limbs, but producing total disability, the sum of $50 per week, so long as the assured shall be so disabled not exceeding 100 consecutive weeks. If the disability of the insured from his injury is not complete, and is not an injury of the character for which a lump sum is payable under other clauses, then the insurer agrees, under clause F, to pay a weekly indemnity not exceeding 50 per cent. of the sum stipulated in clause E, during continuance of such partial disability, not exceeding 26 weeks. Under clause G the amounts payable as weekly indemnity under clause E or F are to be doubled, subject to this important provision, namely, 'that no payment so made for weekly indemnity shall be in excess of the money value of the assured's time. ' But no right to receive any weekly indemnity whatever exists for the loss of an arm. For such a loss the contract is that a lump sum of $5,000 shall be paid, unless the loss occurred while the assured was a passenger upon a public conveyance. In that event, the express agreement, contract, or covenant, is to pay the assured the sum of $10,000.

To defeat this plain, indisputable result, the assurance corporation relies upon clause M, and contends that under that provision the lump sum payable for such a loss is only that proportion of the principal sum otherwise payable which the actual money value of the assured's time bears to the aggregate maximum weekly indemnity payable, in some circumstances, under this and all concurrent accident insurance. Thus, it is said that the maximum weekly indemnity payable under the assured's contract with the Maryland Casualty Company was $100, and that the weekly indemnity payably under this policy is $100. The aggregate weekly indemnity under both policies was therefore $200 per week, while the weekly salary or income of the assured was only $75. Thus it is said that the lump sum payable is 75/200 of $10,000, the principal sum otherwise payable, which would be $3,750.

In short, the amount recoverable by a plaintiff for the loss of an arm would be in an inverse ratio to the...