Service Mut. Ins. Co. v. Erskine

• Decision Date: 11 March 1943
• Docket Number: No. 2490.,2490.
• Citation: 169 S.W.2d 731
• Parties: SERVICE MUT. INS. CO. OF TEXAS v. ERSKINE et al.
• Court: Texas Court of Appeals

169 S.W.2d 731

SERVICE MUT. INS. CO. OF TEXAS v. ERSKINE et al.

No. 2490.

Court of Civil Appeals of Texas. Tenth District.

March 11, 1943.

Appeal from District Court, Falls County; Terry Dickens, Judge.

Action by John Conrad Erskine against Durwood Chatham to recover amount plaintiff would have been entitled to recover over against a compensation carrier if workmen's compensation policy had been in force and effect at time of injury, wherein the defendant filed a cross-action against the Service Mutual Insurance Company of Texas. From an order overruling a plea of privilege filed by the third-party defendant, the third-party defendant appeals.

Reversed, and judgment rendered transferring the cause of action against the third-party defendant to district court of McLennan county.

Scott & Wilson, of Waco, for appellant.

Cecil R. Glass, of Marlin, for appellees.

TIREY, Justice.

This is an appeal from an order overruling plea of privilege filed by The Service Mutual Insurance Company of Texas, "a third-party defendant," under Rule 38, Vernon's Texas Rules of Civil Procedure, to be sued in McLennan County, the county of its residence. The cause was tried without a jury and the action of the court is assailed substantially on the ground that plaintiff did not sue the Insurance Company, and that the defendant's cross-action against the Insurance Company was based solely on an asserted breach of an oral executory contract to renew a compensation policy of insurance containing a "no action clause" and by reason thereof a part of the cause of action "had not arisen at the time the plea was filed." The point requires a comprehensive statement.

Plaintiff Erskine, a resident citizen of Falls County, brought this suit in the District Court of said county against Durwood Chatham, a resident citizen of Falls County. He alleged substantially that Chatham was engaged in the business of operating a cotton gin in said county and was an employer within the meaning of the Workmen's Compensation Law of this state, Vernon's Ann.Civ.St. art. 8306 et seq., and that plaintiff was an employee of defendant within the meaning of such Act, and that while plaintiff was operating a gin stand in the furtherance of the usual business of his said employer he received an injury to his left arm, on September 3, 1941, and that same was amputated as the result of said accident; that defendant carried a policy of workmen's compensation insurance at all times up to July 15, 1941; that on said date the defendant, without notice to this plaintiff, ceased to be a subscriber for workmen's compensation insurance and on the date plaintiff received his injuries defendant was not a subscriber and plaintiff could not recover for his injuries under the Workmen's Compensation Law of the State of Texas. Plaintiff alleged that at the time he received his injuries had defendant been a subscriber to workmen's compensation insurance he would have been entitled to recover 60% of his average weekly wage amounting to a total of $3,300; and that he would have been entitled to a lump sum settlement and doctors' and hospital bills necessarily incurred. Plaintiff sought to recover against Chatham the amount he would have been entitled to recover over against the compensation carrier if such policy had been in force and effect.

The trial court, on application of Chatham, granted to him permission to file a cross-action against The Service Mutual Insurance Company. Chatham's cross-action alleged substantially that he had been sued by the plaintiff for damages arising out of an accident which plaintiff sustained in the course of his employment with defendant, "as more fully shown by the plaintiff's petition which is on file herein, and made a part hereof for all purposes"; that Chatham began the operation of a cotton gin in Falls County in the year 1938, and he had in his employ more than three employees, and that he became a subscriber to workmen's compensation; that the Company issued to this defendant, on July 15, 1938, its policy of compensation insurance, by the terms of which it agreed to pay any employee of this defendant the sums of money due under the Compensation Law in the event an employee received a compensable injury; that this defendant had numerous policies with said third-party defendant, and said third-party defendant from time to time renewed all of said policies, including the workmen's compensation policy, until July 15, 1941, at which time it failed to renew the workmen's compensation policy to this defendant, which policy expired July 15, 1941; that prior to the expiration of said compensation policy, the third-party defendant agreed with the defendant that it would issue and renew said compensation policy each time it expired without notice from defendant to do so; that it would continue to renew such compensation policy unless said third-party defendant actually notified the defendant prior to the expiration of such policy that it would no longer carry said policy or renew same; that this defendant did not know that such compensation policy had not been renewed and that same had expired on July 15, 1941; that at the time said plaintiff herein was injured on September 3, 1941, this defendant immediately notified said Company of said injury, and said Company at said time denied liability and refused to defend the suit filed by plaintiff. Defendant alleged "that the agreement on the part of the defendant insurance company to keep said policy of insurance in force was made with this defendant in Falls County, Texas, and the injury to the plaintiff occurred in Falls County, Texas, and the cause of action herein asserted against said defendant insurance company by this defendant arose in Falls County, Texas." Defendant in his prayer asked that "he have judgment over against said third-party defendant for whatever amount of money the plaintiff obtains against this defendant" and for attorney's fees and all expenses and for costs.

The Company seasonably filed its plea of privilege and Chatham filed his controverting plea. The controverting plea referred to the cross-action filed by him against said third-party defendant and attached a copy of the same to such plea and made it a part of the same for all purposes, and it alleged that the allegations contained in said cross-action were true and correct. Said controverting plea alleged that Erskine and Chatham both resided in Falls County, Texas, and "that said third-party defendant, under the terms of the Workmen's Compensation Law and under and by virtue of the provisions contained in the insurance policy herein sued upon, is directly and primarily liable to the plaintiff * * * for a portion of the damages...