Getchell & Martin Lumber & Mfg. Co. v. Employers' Liab. Assur. Corp.

• Decision Date: 22 May 1902
• Citation: 117 Iowa 180,90 N.W. 616
• Court: Iowa Supreme Court
• Parties: GETCHELL & MARTIN LUMBER & MFG. CO. v. EMPLOYERS' LIABILITY ASSUR. CORP., LIMITED.

117 Iowa 180

90 N.W. 616

GETCHELL & MARTIN LUMBER & MFG. CO.

v.EMPLOYERS' LIABILITY ASSUR. CORP., LIMITED.

Supreme Court of Iowa.

May 22, 1902.

Appeal from district court, Polk county; C. P. Holmes, Judge.

Both parties hereto are corporations. Plaintiff is engaged in manufacturing, and employs labor, and defendant's business is that of insuring employers against loss on account of personal injuries suffered by their employés, in the line of duty. Plaintiff had a policy with defendant in which it was insured to the amount of $1,500 in case of injury to any one employé. During the existence of this policy, one Harry A. Newbury met with an accident while in plaintiff's employ, which resulted in the loss of his right hand. He instituted an action for damages against plaintiff on account thereof. The petition in the case at bar is in three counts. The first claims the sum of $1,500, the amount of the insurance under the policy. The second and third counts, which are substantially the same, set up the fact that defendant undertook to defend the action brought by Newbury, and, through its negligence, judgment was permitted to go against plaintiff for the sum of $4,300, which, with interest and costs, amounting in all to $4,737.25, plaintiff has been obliged to pay. The amount claimed under these counts is $3,237.25. Defendant made a written tender of the sum of $1,500, and afterwards deposited that amount in court, acknowledging liability to that extent. The contest, therefore, is over the claim made in the other two counts. There was a denial of all liability under these counts. The case, by agreement, was tried to the court, and resulted in a judgment for plaintiff in the sum of $3,209, from which defendant appeals. Reversed.N. T. Guernsey, for appellant.

Clark & McLaughlin, for appellee.

WATERMAN, J.

One provision in the policy reserved rights to defendant in these words: “On receiving from the employer notice of any claim, the corporation may take upon themselves the settlement of same, and in that case the employer shall give them all necessary information and assistance for the purpose. The employer shall not, except at his own cost, settle any claim or incur any expense without the consent of the corporation: provided, however, that if, upon the happening of an accident covered by this policy, the employer shall, in his discretion, take any step for the immediate medical or surgical relief of an injured employé, the corporation shall reimburse any moderate expense so incurred. If any legal proceedings be taken to enforce a claim, the corporation shall, at their own cost and expense, have the absolute conduct and control of defending the same throughout, in the name and on behalf of the employer; but, if the corporation shall offer to pay the employer the full amount insured, they shall not be bound to defend the case, nor be liable for any costs or expenses which the employer may incur in defending such case. The employer shall, at the cost of the corporation, render them every assistance in his power in carrying on any suit which they shall undertake to defend on his behalf.”

The facts are that Newbury obtained judgment against plaintiff in the district court for $4,300, and defendant, in attempting to take an appeal, failed to perfect it in proper time, and the judgment was affirmed on motion. It is upon this failure to have the appeal heard upon its merits that the claim of liability is founded. We very much doubt whether defendant, under the clause of the contract we have set out, would be liable for failing to take an appeal if it thought it inadvisable, or in any event be under obligation to do more than employ a competent attorney; but it appears that, after the judgment below, it expressly agreed to take an appeal, and attempted to do so, and its liability in this action we think must rest upon this second agreement. The question of whether it was obliged to do more than select a competent attorney is extensively discussed by counsel, but we do not feel required to determine it. We may assume, for the purpose of this case, that defendant is liable for any default or negligence of the attorney it employed, and we then have this question: What damages have been shown? The case is a singular one in many of its features. Our attention has been called to none just like it in the books. Plaintiff lays much stress upon the fact that defendant was an insurance company, and some of the arguments made seem to embody the thought that it guarantied a hearing in this court, but...