Phoenix Cotton Oil Co. v. Royal Indem. Co.

• Decision Date: 09 August 1918
• Parties: PHOENIX COTTON OIL CO. v. ROYAL INDEMNITY CO.
• Court: Tennessee Supreme Court

205 S.W. 128

140 Tenn. 438

PHOENIX COTTON OIL CO. v. ROYAL INDEMNITY CO.

Supreme Court of Tennessee.

August 9, 1918

Appeal from Chancery Court, Shelby County; F. H. Heiskell Chancellor.

Action by the Phoenix Cotton Oil Company against the Royal Indemnity Company. From an order overruling demurrer to the bill defendant appeals. Demurrer sustained, and bill dismissed.

C. L Marsilliot and F. C. Jacobs, both of Memphis, for appellant.

Gates & Martin, of Memphis, for appellee.

NEIL C.J.

The bill was filed in this case to recover of the defendant the sum or $5,000, with interest and costs, money which the complainant was compelled to pay at the suit of one Landon Tipton, one of its employés.

It appears from the bill that the defendant executed to the complainant an indemnity policy, whereby the former agreed to pay the latter the sum of $5,000, and costs of litigation, in case any employé of the latter should be injured in course of his employment, but made it a condition precedent of such liability that the former should "upon the occurrence of any accident covered by this policy give immediate written notice thereof to the company."

It further appears from the bill that on the 28th day of November, 1914, complainant's employé, the before-mentioned Landon Tipton, received an injury in complainant's mill at Covington, Tenn., for which he was entitled to recover damages; that complainant's manager, at Covington, failed to inform the complainant's chief office at Memphis that such injury had occurred; that on the 29th day of June, 1915, Landon Tipton brought his suit at Memphis, and caused a summons to be served upon the complainant on the 30th day of June, 1915; that this service was the first knowledge complainant's president had that an injury had occurred; that the complainant's manager, at Covington, by oversight, as aforesaid, had failed to inform complainant's office at Memphis; that upon suit being thus brought against complainant it immediately gave notice in writing to the defendant, but the latter replied on August 6, 1915, that because immediate written notice had not been given, it disclaimed all liability; that thereafter the complainant defended the damage suit with all due diligence, but was unable to defeat it, and that judgment was rendered against it, which it subsequently paid, and thereupon, as stated, brought the present suit to recover of defendant $5,000 of the amount of the judgment, and the court costs, also the amount of the attorney's fee it had been compelled to pay.

The bill contained other allegations to the effect that prior to the trial of the damage suit an attorney and representative of the defendant visited the plant at Covington, and there made investigations, interviewing the man who was the superintendent of complainant's mill at the time the accident occurred, and from such former superintendent obtained complete and explicit information, together with the names of all witnesses who could testify touching the matter; that the former superintendent gave defendant's attorney all possible assistance, and brought to his attention all evidence which could possibly be produced, or which could have been produced if the immediate notice of the accident had been given; that there were no other witnesses that could be introduced whose testimony would have been of assistance, or favorable to the complainant while defending that cause; that immediate written notice to the present defendant, and immediate investigation following the accident, would have developed no other, further, or additional facts or evidence.

It was further alleged that at no time could the case have been compromised for less than the amount which would have been acceptable to Landon Tipton after the first trial of the case, which occurred on May 25 and 26, 1916, at which time the present complainant expressly notified the present defendant that Tipton was willing to accept a reasonable amount in settlement, and suggested that the present defendant attempt to settle it.

The bill was demurred to on the ground, in substance, that it showed no cause of action, since it appeared therefrom that the condition in respect of giving immediate notice had not been complied with. The chancellor overruled the demurrer, but granted the defendant an appeal under the statute applicable to that subject.

We think the learned chancellor was in error. The failure to give the required notice defeated the policy. By its express terms the giving of immediate notice was made a condition precedent to the right of recovery. The case falls directly within the authority of Blackman v. Casualty Co., 117 Tenn. 578, ...