Mears Mining Company v. Maryland Casualty Company

CourtCourt of Appeal of Missouri (US)
Citation144 S.W. 883,162 Mo.App. 178
Decision Date04 March 1912

144 S.W. 883

162 Mo.App. 178



Court of Appeals of Missouri, Springfield

March 4, 1912

Appeal from Newton Circuit Court.--Hon. Carr McNatt, Judge.

AFFIRMED (upon remittitur).

O. L. Cravens for appellant.

(1) Plaintiff cannot recover because it violated certain policy conditions. Ins. Co. v. Myers, 62 Oh. St. 529, 57 N.E. 458; Brown v. Railway Assoc., 45 Mo. 221; Dick v. Ins. Co., 10 Mo.App. 376, 81 Mo. 103; Carr v. Ins. Co., 100 Mo.App. 602; Hoover v. Ins. Co., 93 Mo.App. 111. (2) Under defendant's letter of June 18, 1910, to plaintiff, plaintiff became the agent of defendant to compromise the Overby judgment and could not act in its own interest but owed defendant the duty of acting strictly in its interest, and defendant is entitled to have pro rated the amount of the settlement. 31 Cyc. 1451, 1435; 2 Ency. L. & P., 1057, 1058, 1066; Bent v. Priest, 86 Mo. 482; Patterson v. Glass Co., 72 Mo.App. 492; Marshall v. Ferguson, 94 Mo.App. 175. (3) Even if plaintiff was not acting as the agent of defendant in the settlement of the Overby judgment, the facts disclosed compel a finding that the parties agreed between themselves as to the amount that would be due from defendant upon a settlement by plaintiff with Overby. Ins. Co. v. Witty, 208 Pa. 569, 57 A. 990; 9 Cyc. 257, 270; 1 Beach Mod. Law of Contract, sec. 57; Lunstrass v. Ins. Co., 48 Mo. 201; Allen v. Chouteau, 102 Mo. 309; Stotesburg v. Massengale, 13 Mo.App. 221; Lancaster v. Elliot, 28 Mo.App. 93; Gardner v. Crenshaw, 122 Mo. 79; Am. Pub. Co. v. Walker, 87 Mo.App. 503; Brown v. Smith, 113 Mo. 39; Smith v. Williams, 123 Mo.App. 485; Sawyer v. Walker, 204 Mo. 159. (4) Under the indemnity contract plaintiff can recover only five sevenths of the limit of defendant's liability, Lead & Zinc Co. v. Ins. Co., 152 Mo.App. 339; Land Co. v. Rhodes, 54 Mo.App. 129; Hayden v. Lauffenberger, 157 Mo. 88; Thompson v. Kellogg, 23 Mo. 281; Ridge v. Olmstead, 73 Mo. 578; Cowgill v. Robberson, 75 Mo.App. 42; Friermuth v. McKee, 86 Mo.App. 64; Way v. Caddell, 82 Mo.App. 144; Brown Banking Co. v. Baker, 99 Mo.App. 660; Winter v. Railroad, 73 Mo.App. 173, 160 Mo. 159; Chamberlain v. Smith, 110 Mo.App. 657; Tucker v. Dolan, 109 Mo.App. 442; Hanson v. Crawford, 130 Mo.App. 232; Clay v. Lakeman, 101 Mo.App. 563; Reinhold v. Kerrigan, 85 Mo.App. 256; Bassett v. Kern, 141 Mo.App. 24; Ewing v. Reilly, 34 Mo. 113; Bank v. Pettit, 85 Mo.App. 499; Franz v. Morgan, 6 Phila. 8; Allen v. Ins. Co., 145 F. 881. (5) The general words of section 7068 cannot properly be construed to include policies of the kind in question here. Langstaff v. Rock, 13 Mo. 579; Ex parte Neet, 157 Mo. 527; St. Louis v. Laughlin, 49 Mo. 559; State ex rel. v. Ennis, 79 Mo.App. 12; Bramell v. Adams, 146 Mo. 70; Joplin v. Leckie, 78 Mo.App. 70; McCutcheon v. Railroad, 72 Mo.App. 271; Hale v. Stimson, 198 Mo. 158; Miller v. Wagenhauser, 18 Mo.App. 14; Grumley v. Webb, 44 Mo. 457; Dart v. Bagley, 110 Mo. 42; Knox City v. Thompson, 19 Mo.App. 523; State ex rel. v. May, 106 Mo. 505.

George Hubbert for respondent.

(1) The jurisdiction of this court and the legality of its judgment and mandate in the Overby case, stand beyond reasonable question; and loss under the policy sued by payment of $ 5203.25 to satisfy the judgment is equally clear as the basis of appellant's legal liability under the law. Overby v. Cas. Co., 144 Mo.App. 363; Lead & Zinc Co. v. Ins. Co., 152 Mo.App. 333; State ex rel. v. Nixon, 232 Mo. 106. (2) Even if no judgment had ever been rendered, nor any defense made, on account of the failure of the insuring company to assume the defense under its policy, the assured would nevertheless be free from the onerous conditions of suffering and paying judgment and justified in making the best available terms of reasonable settlement with the claimant, in such case the insurer could not deny liability. News Co. v. Fidelity Co., 83 S.W. 620; Railroad v. News Co., 151 Mo. 390; St. Joseph v. Railroad, 116 Mo. 643; Beef Co. v. Casualty Co., 201 U.S. 173, 50 L.Ed. 712. (3) The amount of such payment or true cost to respondent in money, in satisfaction of the judgment, in whole or in part, marks the sum of the liability of the appellant for the loss, within the stipulated limits, with costs additional, equalling $ 5203.25, with interest from date of loss by payment; and this is true though such payment might have been through other persons, or by other than cash means, if of substantial money value. Cas. Co. v. Light Co., 157 F. 514; Stembon v. Engine Co., 119 N.W. 308, 20 L. R. A. (N. S.) 856, 956; Kennedy v. Fidelity Co., 110 N.W. 97, 9 L. R. A. (N. S.) 478; Railroad v. Cas. Co., 96 P. 509, 18 L. R. A. (N. S.) 121; Ins. Co. v. Moses, 49 A. (N. J. Eq.) 720, 92 A. S. R. 663. (4) Courts seek to conserve rather than destroy, and the first and greatest rule of all that bears to a true interpretation of the statute (section 7068), against vexatious delay in payment is, that "words and phrases shall be taken in their plain or ordinary and usual sense. R. S. 1909, sec. 8057; Interstate Drainage Co. v. Board, 158 F. 273; U. S. v. Mescall, 215 U.S. 26, 54 L.Ed. 77; Bank v. Ripley, 161 Mo. 126; Ex parte v. Smith, 231 Mo. 119; State v. Eckert, 232 Mo. 49; Rissell v. Taylor, 4 Mo. 550; Henderson v. Wabash, 81 Mo. 605; State v. Broderick, 7 Mo.App. 20; Wonner v. Carterville, 142 Mo.App. 126; State ex rel. v. Yates, 231 Mo. 276; State ex rel. v. Harter, 188 Mo. 516; Keeney v. McVoy, 206 Mo. 64; State v. Weber, 205 Mo. 43; Armstrong v. Modern Brotherhood, 132 Mo.App. 171.

OPINION [144 S.W. 884]

[162 Mo.App. 183] GRAY, J.

This action is predicated upon an employer's liability policy, issued by the appellant to respondent, July 2, 1907, by the terms of which the former agreed for a valuable consideration, to indemnify the respondent for a period of twelve months, against loss from liability that might be imposed by law upon respondent not exceeding $ 5000 on account of death or bodily injuries suffered by any one employed by the respondent. At the time the policy was issued, the respondent was engaged in mining in Newton county, and on the 30th day of July of that year, one Frank Overby, an employee of respondent, was killed in its mines. Mr. Overby's widow instituted suit against the respondent to recover damages for her husband's death, and secured a judgment for $ 6000. The appellant took charge of that suit, under the terms of the policy, and caused the same to be appealed, and the judgment was affirmed by this court on the 2nd day of May, 1910. After the affirmance, the respondent negotiated a settlement with the widow, by the terms of which the judgment, which at said time amounted, with interest and costs, to a little over $ 7000, was settled for the sum of $ 5203.35, which was the full amount the appellant was liable for under the terms of its policy, and which amount was paid to the widow and the judgment satisfied by her assignee. This suit is instituted to recover the amount so paid, together with the sum of $ 1100, which plaintiff claimed it was entitled to recover as damages and attorneys fees on account of defendant's vexatious refusal to pay the said $ 5203.35. The cause was tried before the court without a jury, resulting in a judgment in favor of the respondent for the amount claimed under the terms of the policy, and $ 1 damages, and $ 250 attorney's fee. From this judgment, the appellant appealed to this court.

The appellant's first contention is, that plaintiff is not entitled to recover because it violated certain [162 Mo.App. 184] conditions of the policy. The part of the policy it is claimed the plaintiff violated, reads as follows: "The assured shall at all times render to the company all co-operation and assistance in his power. 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, nor interfere in any legal proceeding."

While that suit was pending in this court, negotiations were entered into for the sale of the mining company's property in Newton county, but it was discovered that the judgment obtained by Mrs. Overby was a lien on the real estate of the company, and notwithstanding an appeal bond had been given, the purchaser, on account of this lien, refused to pay the purchase money to the company. In addition to the judgment lien, there was a prior mortgage lien, securing an indebtedness of $ 6500. The property was sold for $ 10,000, and the sale was consummated by the company agreeing that the $ 3500, the amount of the purchase price in excess of the mortgage debt, should be deposited in a bank in Neosho to be paid to Mrs. Overby in case her judgment was affirmed. It is claimed this action on the part of the mining company was in violation of the terms of the policy above set forth, and released the appellant herein. This contention is based on the theory that when the $ 3500 was put in the bank, it caused the plaintiff in the damage suit to feel secure as to that amount of her judgment, and therefore, rendered it more difficult to compromise with her than it otherwise would have been.

There is no evidence that the appeal bond was not good for the amount of the judgment, or that the fact that the money was put in the bank in any wise rendered a settlement with Mrs. Overby more difficult. The purchaser was willing to take the property subject to the lien, if the amount of the equity over and above the mortgage, and to which the widow [162 Mo.App. 185] could look for the collection of her judgment, was deposited in the bank, and not paid to the mining company.

Forfeitures are not favored, and the courts will not put upon language any technical construction for the purpose of creating a forfeiture. The appellant's attorney says: "We submit that while the appeal...

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