Homan v. Employers Reinsurance Corp.

• Decision Date: 23 January 1940
• Docket Number: 36087
• Parties: Homer Homan and Homer Homan, Assignee, Appellants, v. Employers Reinsurance Corporation, a Corporation
• Court: Missouri Supreme Court

136 S.W.2d 289

345 Mo. 650

Homer Homan and Homer Homan, Assignee, Appellants, v. Employers Reinsurance Corporation, a Corporation

No. 36087

Supreme Court of Missouri

January 23, 1940

Reported at 345 Mo. 650 at 667.

Original Opinion of January 23, 1940, Reported at 345 Mo. 650. [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted]

Dalton, C. Hyde and Bradley, CC., concur.

OPINION

DALTON

On Motion for Rehearing.

Respondent contends that we have overlooked the fact that the present action was "brought exclusively under and by virtue of Sections 5898 and 5899, Revised Statutes Mo. 1929, and such statutes must be held to apply to reinsurance contracts to permit the present action," particularly since plaintiff in the prayer of his petition requests "the court to cause to be issued and equitable garnishment directed to defendant in accordance with" the above sections of the statute.

In the opinion we have outlined the facts pleaded in the petition and stated the particular theory upon which relief was sought. In addition to the prayer for special relief the petition closed with a prayer for general relief as follows: "And for such other and further orders as to the court may seem mete and just, the premises considered."

Plaintiff was only required to make "a plain and concise statement of the facts constituting a cause of action," and to make "a demand of the relief to which the plaintiff may suppose himself entitled." [Sec. 764, R. S. 1929 (Mo. Stat. Ann., 764, p. 983); Liese v. Meyer, 143 Mo. 547, 555, 45 S.W. 282.] The prayer was no part of the petition and could be disregarded in determining what relief, if any, is authorized by the petition [Caldwell v. Eubanks, 326 Mo. 185, 30 S.W.2d 976, 980.] Under a prayer for general relief the court may grant any relief consistent with the pleadings and evidence. [Muenks v. Bunch, 90 Mo. 500, 507, 3 S.W. 63.] We are here dealing with a demurrer to the petition, and "whether plaintiff was entitled to all or any of the relief prayed does not matter, provided he was entitled to some relief on the facts stated." [Barnett v. Ground, 304 Mo. 593, 263 S.W. 836, 840.] Since, as we have seen, the petition stated facts sufficient to constitute a cause of action requiring relief in equity, the demurrer should be overruled.

Respondent contends that we have twisted the contract away from its normal and ordinary meaning and have given it a strained and unnatural construction. It contends that we have in fact transposed various portions of the contract and confused "the insuring clause" with other terms of the contract which are said to be "conditions." Respondent says that it was unnecessary to define the word "loss" in every instance in which it was used, and insists that we have placed "undue emphasis" upon certain portions of the contract. We do not think the opinion is properly subject to this criticism.

In the opinion we held that the contract was not strictly a reinsurance contract. It was made before the contract of primary insurance was made. It is not a contract for indemnity against loss. It provided for the filing of all policies of primary insurance and agreed that thereupon each reinsurance should be subject to the general and special terms of such policies. It contains many additional provisions not appearing in the usual reinsurance contract referred to in reported cases, as for example, where it provides; "This reinsurance is excess . . . and applies only to the liability of the reinsured in excess of the amounts first herein stated, which amounts are retained at the risk of the reinsured as a first liability, before loss shall accrue to the corporation hereunder." No case dealing with a reinsurance contract having such a provision in that portion of the contract, which precedes the "conditions," has been called to our attention. The clause in question precedes the statement in the contract that this reinsurance is subject to the following "conditions."

Under "conditions" the contract provides for the filing of each policy form and endorsements and provides that "each reinsurance hereunder shall be subject to all general and special terms and conditions of such policies or endorsements." It was agreed that "the corporation will make prompt settlement of its losses hereunder as soon as the same are definitely and finally determined." Respondent concedes that there is no standard form of excess reinsurance agreements. In the case of Bruckner-Mitchell, Inc., v. Sun Indemnity Co. et al., 82 F.2d 434, 444, the court said: "It is true that typical reinsurance agreements do not operate in favor of the original insured. They are merely contracts of indemnity of the insurer and there is no privity between the original insured and the reinsurer. But nothing in the law forbids drafting reinsurance agreements in special terms so that they will operate in favor of the original insured." In that case the reinsurers of a contractor's bond given for the benefit of the District of Columbia and certain materialmen were held liable in a suit in equity by materialmen, although the reinsurance agreement did not mention the materialmen, but only the District of Columbia. The court said: "We think the first reinsurance agreements in the instant case were not typical agreements but were special, and we conclude that according to the terms thereof the reinsurers are liable to materialmen." As to who may enforce the liability of a reinsurer see extensive notes 35 A. L. R. 1348, and 103 A. L. R. 1485.

Respondent insists "the court places undue emphasis on that part of the contract stating that 'liability of the corporation upon each risk' shall 'continue simultaneously with that of the reinsured' and should 'continue concurrently with the liability of the reinsured.'" We believe that we have construed the contract as a whole and have arrived at its true intent and purpose from the terms used in the contract.

Respondent insists that the "subject to" clause merely fixes the liability of the reinsurer to the reinsured and gives no rights to third parties. The authorities cited by respondents, however, deal only with reinsurance contracts which are pure contracts of indemnity and which clearly do not undertake to make any provisions for the benefit of third parties. We have held in effect the provisions and...