National Quicksilver Corporation v. World Ins. Co.

• Decision Date: 12 January 1944
• Docket Number: No. 12518.,12518.
• Citation: 139 F.2d 1
• Parties: NATIONAL QUICKSILVER CORPORATION v. WORLD INS. CO. OF OMAHA, NEB.
• Court: U.S. Court of Appeals — Eighth Circuit

139 F.2d 1 (1943)

NATIONAL QUICKSILVER CORPORATION v. WORLD INS. CO. OF OMAHA, NEB.

No. 12518.

Circuit Court of Appeals, Eighth Circuit.

December 20, 1943.

Rehearing Denied January 12, 1944.

Alfred Featherston, of Murfreesboro, Ark., and G. C. Hardin, of Fort Smith, Ark. (J. Clib Barton and Bruce H. Shaw, both of Fort Smith, Ark., on the brief), for appellant.

Malcolm W. Gannaway, of Little Rock, Ark. (Jack W. Marer, of Omaha, Neb., on the brief), for appellee.

Before SANBORN, WOODROUGH, and RIDDICK, Circuit Judges.

SANBORN, Circuit Judge.

This is an action upon an "Employer's Security Accident Policy" issued by the appellee under date of February 13, 1942, in which Ira Cox, the mine foreman of the appellant, was the insured and the appellant was the beneficiary. Cox died on February 27, 1942, from accidental injuries received in the course of his employment the day before. If the policy in suit, which had been applied for before his death but which had not at that time been written or delivered, was in force on February 26, 1942, the appellant was entitled to $5,000. The appellee denied that the insurance was in force. The action was brought in the Circuit Court of Pike County, Arkansas. The appellee removed it to the court below. The bond on removal was defective in an essential particular. The appellant moved for a remand of the case to the State court on the ground that the bond was fatally defective and was not subject to amendment after the time within which the case could be removed had expired. The motion to remand was denied, and the appellee was permitted to amend the bond. Issues were joined and the case was tried to a jury. There was no substantial dispute as to the material facts. At the close of the evidence, each side moved for a directed verdict. The court, being of the opinion that the policy in suit was not in force on February 26, 1942, directed a verdict in favor of the defendant (appellee), and the plaintiff (appellant) has appealed from the judgment entered upon the verdict.

The appellant contends (1) that the bond on removal was void and that the case should therefore have been remanded to the State court; and (2) that, under the undisputed facts, the appellant was entitled to judgment.

We think that the giving of a defective bond on removal does not defeat jurisdiction, and that the defect is subject to correction. See and compare Ayers v. Watson, 113 U.S. 594, 597, 598, 5 S.Ct. 641, 28 L.Ed. 1093; Kinney v. Columbia Savings & Loan Ass'n, 191 U.S. 78, 82, 24 S.Ct. 30, 48 L.Ed. 103; Hodge v. Chicago & A. R. Co., 8 Cir., 121 F. 48; Beede v. Cheeney, C.C.Minn., 5 F. 388; Johnson v. F. C. Austin Mfg. Co., C.C.Kan., 76 F. 616; Chase v. Erhardt, D.C., 198 F. 305; Gray v. Oregon Short Line R. Co., D.C., 37 F.2d 591, 593; C. I. T. Corp. v. Ambrose, D.C., 36 F.Supp. 311. Even in the absence of amendment, we have no doubt that if suit were brought to recover upon a defective removal bond, the court would treat it as what it was intended to be, a proper statutory bond on removal. The denial of the appellant's motion to remand was not error.

The appellant operates a cinnabar mine in Pike County, Arkansas, is an employer of labor, and is subject to the Workmen's Compensation Act of Arkansas. Acts 1939, Act 319. The appellee is an insurance company, the Home Office of which is in Omaha, Nebraska. In 1942 it was writing in Arkansas "Employer's Security Accident Policies", which were intended to afford protection to employers against claims of their employees under the Workmen's Compensation Act resulting from accidental occupational injuries. In these policies the employee was named as the insured, and the employer as the beneficiary. The policies provided for an accidental death benefit of $5,000. In January, 1942, the appellant's Board of Directors authorized the procurement of such insurance on the appellant's employees from the appellee through W. A. Stackable, one of the appellee's agents who was also a small stockholder of the appellant and its acting secretary. On February 7, 1942, the appellant had six of its employees sign separate applications for policies. One of these applicants was Ira Cox, the appellant's mine foreman. The appellant arranged with Stackable to take stock for the amount of the premiums to be paid on the policies.

On February 10, 1942, the applications were sent by Stackable to S. V. Abraham, manager of the appellee's Arkansas office in Little Rock, Arkansas, with a letter reading as follows:

"Dear Sam:

"Here are the apps on employees we talked about today.

"Check for the quarterly nets is attached. Lets see you get them issued and in the mails back to me before Saturday — air mail, please! Issue them complete!

"I'll have about 6 more as soon as the foreman can contact the men."

Abraham forwarded the applications to the Home Office of the appellee, where they were received on February 13. Abraham wrote Stackable on February 13, as follows: "This will acknowledge receipt of your applications together with your check in the amount of $22.74. However, you must have miscalculated the premiums, for the premiums should have been $28.42. I know that you failed to charge the additional first premium." On February 18, Abraham again wrote Stackable relative to the employees (including Ira Cox) who on February 7 had applied for insurance, as follows: "We have applications from above employees of the National Quicksilver Corporation and observe that their occupations are shown as Mining. Please inform us the type of mine in which they work and if they are underground miners, the premium will have to be rated up 20 per cent over the one quoted." In this letter Abraham also asked for additional information relative to Curtis Chambers, one of the applicants. Again, on February 25, Abraham wrote Stackable asking him to attend to his (Abraham's) letter of February 18, which he quoted in full. On February 25, Stackable wrote to Abraham as follows:

"This is in reply to your letter about the risks submitted as indicated on top of your letter of Feb. 18, 1942.

"I return the bottom of your letter concerning applicant Curtis Chambers, indicating the facts with reference to his health history.

"Do I understand that the applications are still in your office? I have also your letter of February 13 in which you state that I did not send you enough money, apparently neglecting to include the additional `first premium' in my basis for figuring the net. You are right about that, and of course, I will have to remit the difference which I am sending with this letter, in amount of $5.68 which is the difference between the $22.74 and the $28.42 you referred to.

"As to these men's occupations, I rated them the highest that was showed on the application list of prices. They are listed as miners, but they are not coal miners, and they do not all work underground. In fact, they are `hard rock' miners in the cinnabar mine area in Pike County, Arkansas. They never have any gas to contend with, and they never have a fall of rock hurt a man. They have a watchman who never goes underground, and they have a hoist-man who operates a small engine and never goes underground, and other also never go underground. Other men do ride down in the `bucket' in shaft about 65 feet and work with air jack-hammers and put small charges of dynamite in drill holes, and then come out to `shoot' the charges, returning to shovel the cinnabar ore into the `bucket' so it may be hoisted out. If this means that they are all to be rated as underground miners and charged 20% extra, that will have to be O. K., so go ahead with the rating, and charge my account. The main thing is to get the coverage, because I supposed we would have the policies back before now on some kind of basis.

"Call the watchman a top man, the foreman both a top and shaft man, William Whiteman and Joe Chambers top men, and the others, A. M. Jones and C. Chambers shaft men, and we'll change later if we find it is not correct. Or call all of them underground, if the company rules require it when all work around such a mine."

On February 26, Ira Cox, one of the applicants for insurance, was accidentally burned while in the course of his employment. He died of his injuries the following day. Stiles, the president of the appellant, was immediately informed of the death of Cox, and he advised Stackable. On February 28, Stackable wrote Abraham and sent in an application for insurance on another of the appellant's employees, but did not mention the death of Cox.

On March 4, the appellee, which did not know of the death of Cox, forwarded to Abraham the six policies — including the policy covering Cox — the applications for which had been received by the appellee at its Home Office on February 13. The letter of transmittal stated:

"In connection with above names of six applicants, we have issued policies and rated them up 20 per cent on account of their occupations. Regardless of how many times they go underground, the same rate would apply.

* * * * * *

"* * * We have changed the first premium on the Ira Cox policy from $15.15 to $17.80."

On March 6, Abraham sent the six policies to Stackable for delivery to the appellant, with a letter containing the language quoted above from the appellee's letter of transmittal. On the same day, Stackable wrote Abraham a letter enclosing another application for insurance upon an employee of the appellant, and again made no mention of the death of Cox. In this letter Stackable stated: "Finally, you had up with me the matter of charging these cinnabar miners an extra 20% if they worked underground. When you and I talked about it, you said the highest rate on the blue blanks was the one that should be charged to miners, and I sold the employer on that basis. But the employer is wanting the protection and the Home Office should know what cinnabar mining is, as compared with other kinds of mining, such as gold, lead,...