National Paper Box Company v. Aetna Life Insurance Company

• Decision Date: 05 May 1913
• Citation: 156 S.W. 740,170 Mo.App. 361
• Parties: NATIONAL PAPER BOX COMPANY, Appellant, v. AETNA LIFE INSURANCE COMPANY, a Corporation, Respondent
• Court: Kansas Court of Appeals

156 S.W. 740

170 Mo.App. 361

NATIONAL PAPER BOX COMPANY, Appellant, v. AETNA LIFE INSURANCE COMPANY, a Corporation, Respondent

Court of Appeals of Missouri, Kansas City

May 5, 1913

Appeal from Jackson Circuit Court.--Hon. Jos. A. Guthrie, Judge.

Judgment affirmed.

Battle McCardle for appellant.

A policy may call for immediate proof of loss. But if it does not also provide, in express terms, that failure to give same shall work a forfeiture of the insurance, no forfeiture will result from failure to furnish such proof of loss and assured may recover its loss. Courts are powerless to insert a forfeiture clause in a contract of insurance, where the parties have omitted to do so, just as they are powerless to strike it out where the parties have inserted it. Dezell v. Fidelity & Casualty Co., 176 Mo. 253; James v Casualty Co., 113 Mo.App. 622; Spoke Co. v. Casualty Co., 143 S.W. (Ark. 1912) 84; Rheims v. Ins Co. 39 W.Va. 672; Ins. Co. v. Fielding, 35 Colo. 19, 83 P. 1013; Windle v. Surety Co., 151 Ill.App. 273; Ins. Co. v. Knight, 111 Ga. 622; 36 S.E. 821; Ins. Co. v. Downs, 90 Ky. 236, 13 S.W 882; Assurance Co. v. Hanna, 60 Neb. 29, 82 N.W. 97; Flatley v. Ins. Co., 95 Wis. 618, 70 N.W. 828; Mason v. Ins. Co., 82 Minn. 336, 85 N.W. 13.

Clyde Bissett and Rosenberger & Reed for respondent.

(1) The notice requirement of employer's liability policies, is in view of the purpose of such insurance, not only reasonable and valid, but is of the very essence of the contract, and the courts are united in holding that no recovery can be had if there has been unreasonable delay in giving such notice. Cooley's Briefs on Insurance, 3570; Paper Stock Co. v. F. & C. Co., 104 Mo.App. 157; Myers v. Ins. Co., 62 Oh. St. 760; 57 N.E. 458; London G. & Accid. Co. v. Siwy, 66 N. E. (Ind.) 481; Veneer Co. v. London G. & Accid. Co., 100 Wis. 378, 75 N.W. 996; Assurance Corp. v. Light Co., 28 Ind.App. 473, 63 N.E. 54; Wolverton v. Fid. & Cas. Co., 190 N.Y. 41, 16 L. R. A. (N. S.) 400. (2) The insurance being against liability, the purpose of the notice condition is to enable the company to prevent a liability from being fixed on the assured, whereas in life, accident and fire insurance, the company's liability is already fixed as soon as the loss occurs. Therefore the courts have quite uniformly given a more liberal construction to the notice provision in Employer's Liability policies than in such other forms of insurance. Cooley's Briefs on Insurance, 3570; Paper Stock Co. v. F. & C. Co., 104 Mo.App. 157; Myers v. Ins. Co. , 62 Oh. St. 760, 57 N.E. 458; London G. & Acc. Co. v. Siwy, 66 N. E. (Ind.) 481; Liability Assurance Co. v. Light Co., 28 Ind.App. 473, 63 N.E. 54; Veneer Co. v. London, etc., Accid. Co., 100 Wis. 378, 75 N.W. 996.

OPINION

JOHNSON, J.

--Action on a policy of Employers' Liability Insurance. At the close of all the evidence the court gave the jury a peremptory instruction to find for defendant and a corresponding verdict was returned. Plaintiff then filed motions non obstante veredicto, for a new trial and in arrest of judgment, all of which were overruled and plaintiff appealed.

There is no material controversy over the facts of the case. Defendant issued a policy to plaintiff, a large manufacturer in Kansas City, by the terms of which it undertook to insure plaintiff "against loss or expense arising or resulting from claims upon the assured for damages on account of bodily injuries . . . accidentally suffered, by reason of the operation of the trade or business described herein by any employee or employees of the assured while within the factory, shop or yard described herein," etc.

The policy began with the recitation that it was issued "in consideration of the warranties of the assured hereinafter set forth and of sixty-eight and 40-100 dollars estimated premium" and among the stipulations appearing on its face were the following: "This insurance is subject to the following conditions." Then appear conditions and restrictions from which we quote those which are essential to the present inquiry.

"Limits of Indemnity.

"A. The company's liability for loss on account of an accident resulting in bodily injuries to or in the death of one person is limited to five thousand dollars ($ 5000); and, subject to the same limit for each person, the company's total liability for loss on account of any one accident resulting in bodily injuries to or in the death of more than one person, is limited to ten thousand dollars ($ 10,000). The company will, however, as provided in conditions D and E hereof, pay the expense of litigation in addition to the sum herein limited, provided that if the company shall elect to pay the assured the sum as herein limited, it shall not be liable for further expenses of litigation after such payment shall have been made."

"Reporting Accidents and Claims.

"C. Upon the occurrence of an accident the assured shall give immediate written notice thereof with the fullest information obtainable to the home office of the company at Hartford, Conn., or its duly authorized agent. If a 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 company all co-operation and assistance in his power.

"Report and Defense of Suits.

"D. If thereafter any suit 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 company's home office every summons or other process as soon as the same shall have been served on him, and the company will, at its own cost, defend such suit in the name and on behalf of the assured, unless the company shall elect to settle the same or to pay the assured the indemnity as provided for in condition A, hereof.

"Co-operation of Assured. Expenses.

"E. The assured, whenever requested by the company, shall aid in effecting settlements, securing information and evidence, the attendance of witnesses and in prosecuting appeals, but the assured shall not voluntarily assume any liability, or interfere in any negotiations for settlement, or in any legal proceeding, or incur any expense, or settle any claim, except at his own cost, without the written consent of the company previously given, except that the assured may provide at the company's expense such immediate surgical relief as is imperative at the time of the accident."

On January 22, 1907, and during the term of the policy, one Hufford, an employee of plaintiff was injured in the factory. Both of his feet were run over and injured by a loaded truck under circumstances which suggested that negligence of defendant was the proximate cause of the injury. The superintendent of the factory was nearby and received immediate knowledge of the facts of the injury and its cause. At first there was no indication of a permanent injury and Hufford did not quit work until three days later. His injury appeared slight, at first, grew rapidly worse and became so serious that he had to remain at home on the fourth day and summon medical aid. Blood poisoning set in, gangrene appeared, and on May 1, 1907, his left leg was amputated. Six months later the other leg was amputated. The superintendent kept informed of plaintiff's condition and knew that he attributed his misfortunes to the injury. More than a year and a half elapsed before Hufford spoke of claiming damages from plaintiff, but the evidence shows quite clearly that plaintiff through its alter ego, the superintendent, had knowledge from the date of the injury of facts and circumstances that would have created apprehension in the mind of an ordinarily careful business man that a substantial claim of that character might be made sooner or later.

Plaintiff gave defendant no notice of the injury until after Hufford filed suit for damages in December, 1908. Then plaintiff called on defendant to take charge of the defense of the case. Defendant refused on the ground that the failure of plaintiff to give notice in accordance with the terms of the contract had released it from liability. Plaintiff defended the suit which proceeded to a judgment for Hufford in the sum of $ 2500. Plaintiff paid the judgment and costs and then brought this suit to recover the sum thus expended, together with the amount laid out in attorneys' fees and other expenses.

The provisions of the policy from which we have quoted imposed the duty on plaintiff of giving defendant "immediate written notice" on the occurrence of an accident which term, of course, referred to an injury to an employee that might be the basis of a claim for damages against defendant. The subject-matter of the insurance contract was indemnity to the assured for "loss or expense arising or resulting from claims upon the assured for damages" made by employees on account of bodily injuries "suffered by reason of the operation" of plaintiff's factory and the provision for the giving of notice obviously was intended to apply only to accidents that fell within the scope of the subject-matter and not to those that could not afford a reasonable basis for a claim for damages on the part of an injured employee.

The term "immediate notice" as used in policies of insurance is liberally construed in the decisions in this State and in other jurisdictions to mean notice given with due diligence and in a reasonable time, "due regard being had to the attending circumstances." [Columbia, etc. Co. v. Fidelity &...