Jefferson Realty Co. v. Emp. Liability Cor.

• Decision Date: 10 October 1912
• Citation: 149 Ky. 741
• Parties: Jefferson Realty Company v. Employers' Liability Assurance Corporation.
• Court: Kentucky Court of Appeals

149 Ky. 741

Jefferson Realty Company v. Employers' Liability Assurance Corporation.

Court of Appeals of Kentucky.

Decided October 10, 1912.

Appeal from Jefferson Circuit Court (Common Pleas Branch, Second Division).

WILLIAM M. WATTS, FRED FORCHT, JR., for appellant.

O'NEAL & O'NEAL for appellee.

OPINION OF THE COURT BY JUDGE CARROLL — Affirming.

In the Paul Jones Building, located in Louisville, and owned by the appellant realty company, there are four passenger elevators. The realty company took out insurance to protect itself from loss on account of accidents happening to passengers on two of these elevators in the Fidelity & Casualty Company of New York, and on two of them in the appellee assurance corporation. In February, 1909, T. M. Berry, a passenger, while using one of these elevators was seriously injured. Under the mistaken impression that the injury occurred in one of the elevators covered by the policy in the Fidelity & Casualty Company of New York, that company was at once notified of the accident by the realty company and without stopping to ascertain whether the accident occurred on an elevator insured by it, at once took such action as it deemed advisable to protect its interests. About a month after the accident, and in March, 1909, Berry brought suit against the realty company to recover damages for the injuries sustained in the accident, and the attorneys for the Fidelity & Casualty Company of New York, yet laboring under the belief that it was liable under its policy, undertook the defense of the case and continued in charge of it until January, 1910, the case not having been brought to a trial before this date. In January, 1910, it was discovered that the accident occurred in one of the elevators covered by the policy of the appellee company, and not the policy of the Fidelity & Casualty Company of New York; and, upon making this discovery, the appellee company was at once notified and placed in possession of all of the information that had been collected by the Fidelity & Casualty Company of New York. But, taking the position that it was not liable because of the delay in giving it information of the accident and the institution of the suit it declined to have anything to do with the suit brought by Berry. This suit, however, was settled between the realty company and Berry, a short time after this, by the payment to Berry of $2,500 and costs, the appellee company not objecting to the settlement, although denying its liability. After making the settlement, this action was brought by the realty company against the appellee company to recover from it the amount paid to Berry. The petition set up the facts before mentioned, and also the conditions of the policy upon which it rested its cause of action. To this petition a general demurrer was sustained, and declining to plead further the action of the realty company was dismissed, and it prosecutes this appeal.

The policy issued by the appellee company stipulated that it would indemnify the insured against loss, subject to certain conditions, among which were these:

"Condition C. Upon the occurrence of an accident involving bodily injuries or death, the assured shall give immediate written notice thereof, with the fullest information obtainable at the time, to the corporation's home office at Boston, Mass., or, to the corporation's authorized agent. If the claim is made on account of such accident, the assured shall give like notice thereof with full particulars. The assured shall at all times render to the corporation all co-operation and assistance in his power.

"Condition D. If thereafter any suit, even groundless, is brought against the assured to enforce a claim for damages on account of an accident covered by this policy, the assured shall immediately forward to the corporation every summons or other process as soon as the same shall have been served on him, and the corporation will at its own cost defend such suit in the name and on behalf of the assured, unless the corporation shall elect to settle the same or pay the assured indemnity, provided for in Condition A hereof, in which case the corporation shall not be liable for any further expense after such payment shall have been made."

To defeat the action, the appellee company relied upon these conditions, although it did not insist that under them it was entitled to immediate notice, only claiming that it was entitled to reasonable notice of the accident and reasonable notice of the institution of the action by Berry. On the other hand, the realty company seeks to avoid this defense upon the following grounds which we take from its petition:

"Plaintiff states that, believing that the elevator on which said accident occurred was one of the elevators insured in the Fidelity & Casualty Company of New York, notified the said Fidelity & Casualty Company of New York of the occurrence of said accident, and said Fidelity & Casualty Company of New York, through its attorneys, and by mistake on the part of said attorneys believing that said accident occurred on one of the elevators insured in the said Fidelity & Casualty Company of New York, made an immediate investigation of the cause of said accident, obtained the statements of witnesses and made a thorough and complete investigation thereof; and that said injured man, T. M. Berry was removed to one of the infirmaries in the city of Louisville, and that the said Fidelity & Casualty Company of New York, through its attorneys, in the belief that said accident occurred on one the the elevators insured in its company, attempted to compromise said accident with said T. M. Berry, and said T. M. Berry refused and declined to make any proposition of compromise or settlement or consider any proposition of compromise or settlement. That thereafter, on the 15th day of March, 1909, the said T. M. Berry instituted an action in the Jefferson Circuit Court against this defendant, seeking to recover damages for the personal injuries sustained by him in said elevator accident. Upon the service of process upon this plaintiff, as defendant in said action, and by mistake, this plaintiff believing this accident had occurred upon one of the elevators insured in the said Fidelity & Casualty Company of New York, immediately turned over said process served upon it by the sheriff to the attorneys for the said Fidelity & Casualty Company of New York, and said attorneys for the Fidelity & Casualty Company of New York by mistake on their part, still believing that said accident occurred on one of the...