Myers v. Continental Cas. Co.

• Citation: 22 S.W.2d 867
• Decision Date: 03 December 1929
• Docket Number: No. 20859.,20859.
• Court: Court of Appeal of Missouri (US)
• Parties: WILLIAM H. MYERS, RESPONDENT, v. CONTINENTAL CASUALTY COMPANY, A CORPORATION, APPELLANT.<SMALL><SUP>*</SUP></SMALL>

22 S.W.2d 867

WILLIAM H. MYERS, RESPONDENT, v. CONTINENTAL CASUALTY COMPANY, A CORPORATION, APPELLANT.^*

No. 20859.

St. Louis Court of Appeals. Missouri.

Opinion filed December 3, 1929.

Appeal from the Circuit Court of the City of St. Louis. — Hon. John W. Calhoun, Judge.

REVERSED.

Watts & Gentry for appellant.

(1) The court erred in overruling defendant's demurrer to the evidence at the close of all the evidence offered in the case, because the evidence conclusively showed that the exemption clause in the liability insurance policy sued on which provided that the policy should not cover damages resulting from injuries to persons employed by assured contrary to law as to age had not been waived and constituted a perfect defense. Holland Laundry Co. v. Travellers Ins. Co., 152 N.Y. Sup. 92; Mason-Hentry Press v. Aetna Life Ins. Co., 211 N.Y. 489, 105 N.E. 826; Stearns Lbr. Co. v. Travelers Ins. Co., 150 N.W. 991; Fulton Co. v. Massachusetts Bonding & Ins. Co., 197 S.W. 866; Sargent Mfg. Co. v. Travelers Ins. Co., 165 Mich. 87; Unnewehr v. Ins. Co., 176 Fed. 16; Security Ins. Co. of New Haven, Conn., v. McAlister, 217 Pac. 430; Gise v. Fidelity & Cas. Co. of N.Y., 206 Pac. 624; Ford Hospital v. Fidelity & Casualty Co. of N.Y., 183 N.W. 656; American Candy Co. v. Aetna Life Ins. Co. 159 N.W. 917, 164 Wis. 266; Morrison v. Royal Indemnity Co., 167 N.Y. Sup. 732, 180 App. Div. 709; Joseph Gordon, Inc., v. Massachusetts Bdg. & Ins. Co., 128 N.E. 204, 229 N.Y. 424 (reversing order 174 N.Y.S. 844), 186 App. Div. 630; Mann. v. Employers Lia. Assur. Corp., 143 N.W. 794, 123 Minn. 305; Buffalo Steel Co. v. Aetna Ins. Co., 136 N.Y. Sup. 977, judgment affirmed 141 N.Y. Sup. 1027, 156 App. Div. 453, which is affirmed in 109 N.E. 1067, 215 N.Y. 638; Edgefield Mfg. Co. v. Maryland Cas. Co., 58 S.E. 969, 78 S.C. 73; Chicago-Coulterville Coal Co. v. Fidelity & Cas. Co. of N.Y., 130 Fed. 957; Meyers v. Cont. Cas. Co., 12 Fed. (2d) 52; Fidelity & Cas. Co. of N.Y. v. Stewart Dry Goods Co., 271 S.W. 444, 208 Ky. 429. (2) The court erred in striking out all of the allegations of the amended answer in this case by which defendant pleaded that the controversy here involved is res adjudicata. The facts pleaded in that defense conclusively show that United States Circuit Court of Appeals, in an action previously brought by plaintiff against defendant involving precisely the same issue involved in this case, fully adjudicated the controversy. Defendant should, therefore, have been allowed to plead and prove the facts set up in that defense. Richardson v. Dell, 191 S.W. 63; Michet et al. v. White et al., 64 Wash. 341; Clark v. Knox, 32 Colo. 342; Troxell v. Railroad Co., 227 U.S. 440; Cromwell v. County of Sac. 94 U.S. 352; Garland v. Smith, 164 Mo. 22; Dickey v. Heim, 48 Mo. App. 118; Murphy v. Barron, 228 S.W. 492; Radford v. Meyer, 231 U.S. 725; Baker v. Cumming, 181 U.S. 117; Last Chance Mining Co. v. Tyler Mining Co., 157 U.S. 683; Virginia-Carolina Chem. Co. v. Kirven, 215 U.S. 252.

G.T. Priest for respondent.

NIPPER, J.

This is a suit to recover on a liability insurance policy brought by William H. Myers against the Continental Casualty Company. There was a verdict and judgment in favor of plaintiff in the sum of $2999, and defendant has appealed.

The plaintiff was engaged in the manufacture of wooden boxes and crates, and he had purchased from the defendant the policy of insurance on which the suit is based.

The period of the policy was for one year, being dated November 2, 1921, and expiring November 2, 1922. By the terms of the policy defendant agreed to indemnify the assured against loss from the liability imposed by law, for damages on account of bodily injuries, including death resulting therefrom, accidentally suffered within the policy period, by any employee or employees of the assured. It also agreed to defend, in the name and on behalf of the assured, any suits brought against the assured to recover damages on account of such injuries. It was also provided that the company would have the exclusive right to contest or settle any of such suits or claims, and the assured should not incur any expense or settle any claim without the written authority of the defendant. The policy further provided that it did not cover any loss on account of injuries or death caused or suffered by any employee who had been employed in violation of law as to age.

One Theodore Hadaller was employed by plaintiff at his establishment in the city of St. Louis, and while this policy was in force he suffered injuries while operating a circular saw in plaintiff's establishment. Immediately thereafter, plaintiff notified defendant of the accident. On November 14, 1922, Hadaller brought an action against the plaintiff in the circuit court of the city of St. Louis to recover damages on account of such injuries. On November 17, following, plaintiff was served with summons in this suit. He delivered this to defendant. At the time Hadaller was employed he furnished plaintiff with a certificate indicating he was sixteen years of age. About the time summons was served on plaintiff defendant was furnished a certificate of the Superintendent of the Board of Education of Granite City, Illinois, to the effect that according to the records of that office, Hadaller was born February 3, 1906. Shortly thereafter, Hadaller filed a petition asking for the appointment of a guardian ad litem, stating that he was fourteen years and eleven months old. This petition was sworn to by his mother. The plaintiff furnished the defendant with information respecting these proceedings. On December 6, 1922, counsel for defendant filed an answer and a motion to elect in behalf of plaintiff, and on December 7, or the next day, such counsel forwarded to the plaintiff the following letter:

"We are attorneys for the Continental Casualty Company of Chicago, with which you carry a liability policy covering the operation of your factory in this city. A boy named Hadaller was injured in your plant on the 25th day of September, 1922, and has brought suit to recover damages for such injuries. There is a slight error in the name under which he has sued you, but that error is so slight that it can easily be corrected by leave of court.

"The Continental Casualty Company has called our attention to the fact that a controversy exists as to the exact age of this boy at the time of his injury. It is claimed by the boy that he was under sixteen years of age. A certificate from the Superintendent of the Board of Education at Granite City, Illinois, says that the records of the Board show that the boy was born on February 3, 1906. If that record is correct, the boy was over sixteen years of age when he was injured. If the plaintiff's contention is correct, then he was employed contrary to law, and since the insurance company's policy issued to you provides in substance that it shall not be liable for injury to an employee employed by you contrary to the law relating to age of minors who may be employed in this State, the insurance company will not be liable if it is established at the trial that the boy was unlawfully employed by you.

"In view of these facts, the Continental Casualty Company, through us as its attorneys, hereby notifies you that if investigation discloses the fact that the boy was employed by you at the time of his injury in violation of the law of this State as to age, then his case is not covered by the policy of insurance issued to you by the Continental Casualty Company, and that company will decline to pay any judgment rendered against you in favor of the plaintiff.

"In the meantime, until such controversy is settled, the company tenders you the service of its Claim Department for investigation and its attorneys for the defense of the case without charge to you up to the time that the question of age is determined. In so tendering you the service of its Claim Department and Legal Department, it must be distinctly understood that the Insurance Company does not thereby waive any of the provisions of the policy above referred to. If you are not willing to accept the services of the Claim Department and the Law Department of the Insurance Company during the making of such investigation on the terms herein stated, then please notify us at once, for we do not want to be put into the position of waiving any provision of the policy."

This letter was received in due course, but no answer thereto was made. On December 22, following, plaintiff called at the office of counsel for defendant and there discussed with Mr. Gentry the contents of this letter and the question of no liability. Mr. Gentry advised plaintiff that if it should be determined or discovered that Hadaller was not sixteen years of age at the time of the injury the defendant would disclaim liability and decline to go on with the defense of the action. Plaintiff then asked Mr. Gentry that in case the defendant decided not to continue with the defense on account of Hadaller's age, if he would represent him notwithstanding this fact. Mr. Gentry advised him that he would let him know about the matter later.

On April 10, 1924, the case came up for trial. The evidence showed that Hadaller was not sixteen years of age. After the evidence had been completed, and prior to the argument of counsel, defendant, through its counsel, addressed and delivered to plaintiff the following letter, dated April 11, 1924.

"Evidence offered by the plaintiff this morning having clearly established without contradiction for the first time that the plaintiff, Theodore George Hadaller, was under the age of sixteen years at the time when he was injured in your factory, and that contrary to the provisions of the statute of this State the said Theodore George Hadaller was engaged in the operation of a power-driven machine known as a jointer, this is to advise you that the Continental Casualty Company now hereby finally disclaims all...