Georgia Life Ins. Co. v. Mississippi Cent. R. Co.

• Decision Date: 12 November 1917
• Docket Number: 19488
• Citation: Georgia Life Ins. Co. v. Mississippi Cent. R. Co., 116 Miss. 114, 76 So. 646 (Miss. 1917)
• Court: Mississippi Supreme Court
• Parties: GEORGIA LIFE INS. CO. v. MISSISSIPPI CENT. R. CO

76 So. 646

116 Miss. 114

GEORGIA LIFE INS. CO. v. MISSISSIPPI CENT. R. CO

No. 19488

Supreme Court of Mississippi

November 12, 1917

APPEAL from the chancery court of Adams county, HON. R. W. CUTRER Chancellor.

Suit by the Mississippi Central Railroad Company against the Georgia Life Insurance Company. From a decree for plaintiff defendant appeals.

The facts are fully stated in the opinion of the court.

Judgment reversed.

ETHRIDGE J. STEVENS, J., dissenting.

HOLDEN, J., concurs in this dissenting opinion.

OPINION

ETHRIDGE, J.

This is an appeal from the chancery court of Adams county, from a judgment against the appellant in favor of the appellee for five thousand dollars, on a policy issued by the Great Southern Accident & Fidelity Company, to the Mississippi Central Railroad Company, which policy was assumed by the Georgia Life Insurance Company.

The policy covered a period from the 11th day of November, 1911, to the 11th day of November, 1912. By his policy the insurance company, hereafter called the "company," agreed to indemnify the assured railroad company against loss for damages within the amounts named in the policy, on account of bodily injuries or death accidentally suffered by any employee of the assured while engaged in the occupations called for by the policy. Clauses B, C, D, and H of the policy are involved in this litigation, and reads as follows:

"B. Subject to the above conditions the company's liability for loss from an accident resulting in bodily injuries, including death resulting therefrom, to one person is limited to five thousand dollars ($ 5,000), and, subject to the same limit for each person, the company's total liability for loss from an accident resulting in bodily injuries, including death resulting therefrom, to more than one person is limited to ten thousand dollars ($ 10,000).

"C. In addition to these limits, however, the company will at its own cost (court costs and attorney's fees being considered part thereof) investigate all accidents and defend all suits, even if groundless, of which notices are given to it as hereinafter required, unless the company shall elect to settle the same, or to pay over to the assured the limits provided for in the preceding paragraph, provided that if the company elects to pay the assured the limit provided for, such payment must be made before the return day of the suit.

"D. It is further agreed and understood that when the company has the opportunity to settle the claim of any injured employee within the limit designated in this policy, viz. five thousand dollars ($ 5.000), and fails to take advantage of such opportunity for settlement within the time provided in the preceding paragraph, the company shall thereafter protect the assured from any judgment not in excess of ten thousand dollars ($ 10,000), which may be rendered in favor of the injured employee. But this stipulation is of no effect, unless the opportunity of compromise as herein mentioned is submitted to the company by the injured employee, or his duly authorized representative, within the period mentioned in the preceding paragraph."

"H. The company is not responsible for any settlement made, or any expense incurred by the assured, unless such settlements or expenditures are first specifically authorized in writing by the company, provided the assured at the time of the accident has the right to provide necessary medical or surgical assistance for immediate relief and to provide means for the immediate comfort of the party or parties injured."

J. M. Winslow, an employee of the assured, engaged in an occupation covered by the policy, and in the service of the assured, was killed on the 14th day of August, 1912; said Winslow being a brakeman, and leaving as his only heirs a widow and a posthumous child. Two suits were filed against the assured, the appellee, in the circuit court of Lincoln county during September, 1912; one suit being filed by D. M. Higdon, administrator of the deceased, under the federal law; and the other by Mrs. Arcola Winslow, the widow, who also was a minor, by D. M. Higdon as next friend, under the state law. The first named of said suits was tried on the merits, in the month of January, 1913, and resulted in a judgment against the assured for twenty-five thousand dollars. The other suit was dismissed. An appeal was prosecuted from the judgment for twenty-five thousand dollars, but was afterwards compromised for ten thousand dollars; the appellee contributing seven thousand dollars, and the appellant three thousand dollars, of the said amount of ten thousand dollars. The appellee contended, at the time of settlement, that the appellant was liable under the policy to the extent of ten thousand dollars, under clauses B and D, and the appellant insisted that it was only liable to the extent of five thousand dollars under clause B of the policy, and declined to pay the same without a full release. In this situation of the matter the settlement was effected, the appellee surrendering two thousand dollars of the admitted liability in order to leave open appellants liability for the other five thousand dollars under said clause D of the policy; and this suit was entered for the five thousand dollars under clause D, and does not involve the primary liability of five thousand dollars under the other clauses of the policy.

When the suits were brought in the circuit court, the administrator of the deceased and the widow, by herself and her father as next friend, entered into a contract with H. V. Wall, an attorney, in which contract. Wall was assigned a one-half interest in the litigation, which contract was filed as required by the statute with the papers in the cause.

After the filing of these suits, and on or about the 26th day of October, 1912, shortly before the birth of the child, Mrs. Winslow, the mother of the deceased, wrote the assured, the railroad company, as follows:

"I have had a talk with my daughter-in-law, and she says she is willing to accept the compromise you stated to me, if you cannot make this sum larger. Now, if possible, please fix this for her regardless of her father and lawyer. See what can be done as soon as possible, as she is in need of the money."

Thereupon the claim attorney of the railroad company, the assured, wrote the insurance company as follows:

"Under the terms of our liability contract with your company, you are hereby formally notified that the above-styled causes, both growing out of the killing of Brakeman Winslow at Wanilla, Miss., August 14, 1912, can be settled for five thousand dollars."

The general attorneys of the insurance company replied to this letter under date of October 3, 1912, as follows:

"We have your favor of the 28th inst., advising us that the case of D. M. Higdon, administrator, and Mrs. Arcola Winslow, against the Mississippi Central Railroad Company, can be settled for five thousand dollars. We are unwilling to make this offer."

It is the contention of appellee that, under the terms of the contract of insurance, this constituted an offer of compromise which must be accepted by the insurance company, or else that the insurance company would be liable for all under ten thousand dollars that might be recovered against the railroad company. If the proposition had been made to the insurance company by the legal representatives of the deceased, or if it had been made by such representatives or attorney of such representatives to the railroad company and transmitted to the insurance company there would have been merit in this contention and if such had been the case the judgment of the chancery court would be upheld. But we are dealing with the completed case, with all matters that the record shows in connection therewith, and from the whole record it appears that there was no such offer of compromise in fact made, and that if the insurance company had undertaken to settle for the five thousand dollars it could not have done so.

The concluding clause of paragraph D, bearing on the compromise proposition, to wit, "but this stipulation is of no effect, unless the opportunity of compromise as herein mentioned is submitted to the company by the injured employee, or his duly authorized representative, within the period mentioned in the preceding paragraph," was evidently put in the contract to prevent just such judgments as was rendered here. The proposition of compromise, under the terms of the policy, is to be submitted to the insurance company by the injured employee or his duly authorized representative within the period mentioned. The evident purpose and intention of this contract, requiring the acceptance of a proposition made in good faith, was that it should be tendered in such manner that the insurance company could accept it.

The railroad company did not abandon its efforts to compromise the litigation against it referred to above, but continued its efforts to bring about a settlement, and all the circumstances following must be taken into consideration. It is manifest from the letters of the railroad company to the insurance company that neither Mr. Higdon, the administrator, nor Mr. Wall, the attorney (having a half-interest in the matter), had been consulted about a compromise, and it plainly appears from the correspondence that the railroad company knew that Mr. Higdon and Mr. Wall would not consent to a compromise, and no proposition had ever been obtained from them justifying an assumption that a compromise could be effected. On October 31, 1912, the claim agent of the assured wrote the insurance company as follows:

"Mrs Arcola Winslow, widow of R. M. Winslow, deceased, a former employee who was killed at Wanilla, and for whose death two suits for damages are now...