London Guarantee & Accident Co. v. Mississippi Central Railroad Co.

• Citation: 97 Miss. 165,52 So. 787
• Parties: LONDON GUARANTEE & ACCIDENT COMPANY v. MISSISSIPPI CENTRAL RAILROAD COMPANY
• Decision Date: 06 June 1910
• Court: Mississippi Supreme Court

52 So. 787

97 Miss. 165

LONDON GUARANTEE & ACCIDENT COMPANY v. MISSISSIPPI CENTRAL RAILROAD COMPANY

Supreme Court of Mississippi

June 6, 1910

March 1910

FROM the circuit court of Adams county, HON. MOYSE H. WILKINSON Judge.

The railroad company, appellee, was plaintiff in the court below the guarantee, etc., company, appellant, was defendant there. From a judgment in plaintiff's favor defendant appealed to the supreme court. The facts are stated in the opinion of the court.

Reversed and remanded.

Mayes &amp Longstreet, for appellant.

Whether or not the guarantee company was liable to the railroad company in any sum, was purely a question of fact for the jury.

Clause "E" of the policy is as follows: "The assured shall not voluntarily assume any liability, nor shall the assured, without the written consent of the company previously given, incur any expense or settle any claim except at his own cost, or interfere in any negotiation for settlement or any legal proceedings; except that the assured may provide at the time of the accident, such surgical relief as is imperative. Whenever requested by the company, the assured shall aid in securing information and evidence and the attendance of witnesses, and in effecting settlements and in prosecuting appeals." The assured railroad company did not comply with this clause in the policy. Not only did it not attempt to show that it complied with this clause, but, on the other hand, it shows that it wholly ignored it. The evidence shows that the railroad company took into its own hands the claim sued on; and that it voluntarily assumed the liability; that it settled without written consent of the appellant guarantee company, absolutely violating the aforesaid policy.

After appellee's counsel in the court below were unable to show that clause "E" of the policy had been complied with, they next introduced the manager of the railroad company, and undertook to show by him that it was not the custom of the railroad company to comply with the conditions of the policy requiring the assured to obtain written consent and authority from the insurance company before any settlement was made. They undertook to get around the condition of the policy on the theory that by some sort of alleged custom or usage the railroad company was not required to live up to this part of the contract, because, they contend, the guarantee company is estopped from enforcing the contract entered into. 22 Ency. Pl. & Pr. 411.

The jury are the sole judges of the facts and credibility of witnesses. It is for them to say whether or not facts establish custom or usage; and if the jury decide that the evidence introduced established a custom or usage, then, and not until then, is it in the province of the court to say whether or not such custom or usage operates as an estoppel.

The court will observe that the court below erred in giving the peremptory instruction to find for the plaintiff for the whole sum sued for, less an offset of some $ 1, 100, for premiums due by the railroad company to the insurance company.

There are but two large claims upon which this suit is instituted; the first being the Messer settlement, which the insurance company repudiated, because, according to its contention, the protection under the policy expired before the accident occurred. The second was the Fairchilds claim, which counsel admitted was repudiated, but endeavor to claim protection by saying that the insurance company was estopped from repudiating this claim because, so contends appellee, the settlement was made by the attorney for the insurance company. We call the attention of the court to the fact that T. Brady, Jr., attorney, acted, according to his own statement, throughout the negotiations leading up to this settlement, solely as a legal representative of the railroad company, and that he did not represent, nor did he think that he was representing, the guarantee company in the transaction. Practically all settlements were made for small sums. But granting, for the sake of argument, that no notice was required by the guarantee company as to any claim other than the two aforesaid claims, we submit that there were no other claims involving amounts that called for notice or waiver, nothing of any consideration, can it be said, even if it were true, that because the railroad company settled a few claims now and then amounting to a few dollars each, and the bill against the guarantee company was paid for these sums, that there has been a custom or usage established by which the guarantee company is estopped from standing on and insisting upon the fulfillment of the contract and conditions of the policy, when items of some magnitude arise? Certainly not. We submit that in such a case, whether it be a question for the court or jury, by no sort of strained construction of the law or of the facts would any such usage or custom be established, so as to operate as an estoppel against the guarantee company, and to do violence to the very terms of the contract itself. 3 Cooley's Briefs on Insurance, 2513.

Learned counsel for appellee undertook to show that the guarantee company was estopped from insisting upon the enforcement of the terms of the policy in the Fairchilds claim because, he says, the settlement was made by the attorney of the appellant. The attorney referred to is Thos. Brady, Jr., Esq. His testimony, however, does not uphold such contention.

The appellant is liable for nothing on the Fairchilds claim because no notice was given in accordance with the terms of the policy as to those losses and settlements.

As to the Messer claim, which had been paid by the railroad company, it is to be noted that the railroad company had secured another employer's liability policy in the Ocean Company. The injury occasioning this loss occurred after the expiration of the contract period of the original policy sued on and for such reason it was not liable.

An assured cannot rely on an attempted waiver of a condition subsequent where the authority of the agent attempting to make the waiver is expressly limited by the contract. 3 Cooley's Briefs on Insurance, 2513.

In the case of Northern Assurance Co. v. Grand View Building Ass'n, 183 U.S. 219, it was held that, the insured not having complied with the conditions, the policy ceased and became of no effect on the subsequent insurance being effected, and that neither the agent nor the inspector had the power to waive a compliance with its terms.

Jeff Truly, for appellee.

An insurance policy of any character must be construed most favorably for the insured, and any of its conditions may be ignored or waived by the insurer. There is no denial in this case by the appellant and no testimony which can be construed as disputing the fact that all settlements made by the appellee, and herein concerned, were made after due notice of the respective accidents sent to the appellee and the settlement made thereafter ratified, and the amount of the settlement paid by appellee. This is, in fact, made manifest by the letter from Clark & Company, managers of the southern department of the appellant insurance company, in which, speaking of a certain accident, the agent of the guarantee company inquires: "If party will expect anything more than usual in settling." Thus recognizing the course of dealing which had existed theretofore, and which continued throughout the life of the policy. The peremptory instruction was granted correctly. As there was no dispute of facts, there was nothing to submit to a jury; as there was no denial of the statements made in behalf of appellee it was entitled to recover of the appellant guarantee company.

Stress is laid by appellant upon the refusal by the circuit court of the instructions asked by appellant restricting the recovery upon the Fairchilds claim to a sum not greater than five hundred dollars. To show the fallacy of this position the exact facts connected with the Fairchilds claim will be set forth so that the court may see that the instruction asked for by appellant was properly refused by the trial court.

On July 9, one Fairchilds was killed; notice was immediately sent, as required by the policy, to the insurance company. This notice was duly received and acknowledged on July 15. Notice of the witnesses' statements regarding the accident was also promptly sent to the appellant insurance company. On July 28 the superintendent of the railroad company wrote to appellant referring to the accident and asked for advice as to the proper course to pursue in so far as a settlement was concerned, and further asking if it was the wish of appellant insurance company to have its regular attorney, Thos. Brady, Jr., Esq., look after the matter. On July 30 receipt of this letter was acknowledged by appellant and the appellee was advised that "We have requested Mr. T. Brady, Jr., attorney, of Brookhaven, to investigate this subject at once." This investigation was immediately made by the aforesaid attorney selected by the insurance company, because, on August 14, the law department of the London Guarantee & Accident Company, through its general managers, notified the managers of its southern department that the Fairchilds case had been investigated by its law department who reported that the case was one of probable liability. The letter further stated that Mr. Brady, attorney, was of a similar opinion regarding the probable liability. It is evident from this that the insurance company had heard from attorney Brady regarding the claim, which, just one month before, he had been employed to investigate. The southern department of appellant was given a limit of seven hundred and fifty dollars in settling the claim. Appellant also suggested to its southern department...