Shedd v. American Credit Indemnity Co., of New York
| Decision Date | 06 June 1911 |
| Docket Number | 7,261 |
| Parties | SHEDD, RECEIVER, v. AMERICAN CREDIT INDEMNITY COMPANY OF NEW YORK |
| Court | Indiana Appellate Court |
From Superior Court of Marion County (77,581); Vinson Carter Judge.
Action by the Gem Garment Company (Edwin H. Shedd, as receiver thereof being substituted as appellant), against the American Credit Indemnity Company of New York. From a judgment for defendant, plaintiff appeals.
Affirmed.
Charles R. Willson and Romney L. Willson, for appellant.
Brown & Kepperley, for appellee.
This action was instituted by the Gem Garment Company against appellee, on an insurance policy or indemnity bond, by the terms of which said Gem Garment Company claimed there was due to it the sum of $ 2,392.95, net losses suffered on account of the insolvency of certain of its customers. The Gem Garment Company, since submission, passed into the hands of a receiver, and Edwin H. Shedd, as receiver of the Gem Garment Company, was, by order of the court, substituted as appellant herein.
The amended complaint is in one paragraph, and alleges that the Gem Garment Company (designated herein as appellant), is an Indiana corporation, with its chief place of business in the city of Indianapolis; that appellee is a New York corporation, doing business in the State of Indiana in accordance with the laws regulating foreign insurance companies, and engaged in writing credit insurance; that on December 5, 1906, in consideration of $ 300, premium paid by appellant, appellee executed and delivered to appellant a policy of insurance, which guaranteed appellant against certain actual losses that might be sustained on account of the insolvency of its customers for one year from February 1, 1907 (a copy of such policy being attached to and made a part of the complaint); that during the term of the policy appellant suffered a large loss on account of the insolvency of certain of its customers (setting out said loss in detail, and aggregating the amount of the demand); that appellant has performed all the terms and conditions of said policy on its part to be performed, except as provided in clause five of said policy, which is as follows:
The complaint then avers that during the term of the policy, appellant had, in compliance with the provisions thereof, notified appellee on the blanks furnished by it, of the insolvency of each of its debtors, and of the amount that each owed appellant, and that at the expiration of said policy appellee had full notice of the losses so sustained by appellant; that appellee, for a number of years prior to the execution of the policy sued on, had written credit indemnity insurance for appellant, and during such years appellee always, within thirty days from the expiration of each of said policies, by an authorized agent came to appellant and prescribed the manner in which it should make out its claims under such policies for the year then expired.
The complaint also avers that, after the execution of the policy in suit, appellant, relying upon the terms of said clause five, and of the custom of appellee in prescribing the manner of making final statement, expected to receive instructions from appellee for making out its final statement of claim as provided in said clause, and delayed preparing such statement until it should receive such instructions; that appellee did not communicate with appellant, nor give any instructions, nor prescribe any manner in which appellant should make such statement of claim, although appellee knew that appellant had sustained losses covered by said policy; that because of such failure to prescribe the manner of making final statement, and relying upon the terms of said clause five that appellee would so prescribe the manner of making such statement of claim, appellant did not make out such statement during the thirty days, as provided in said clause five.
It is further averred that appellant, in expectation of hearing from appellee, delayed taking any steps in making out its said claim until nine weeks after the expiration of the policy; that appellant then wrote to appellee in regard to it, but received no answer; that six days later it wrote again, and ten days later received from appellee a letter, wherein appellee denied its liability under said policy, for the reason that appellant had not filed its final statement of claim within the time provided for in said policy.
The bond, which is set out and made a part of the complaint, provides that an initial loss shall be borne by the indemnified, and shall be eight-tenths of one per cent of the total amount of gross sales made by indemnified during the term of the bond, but said percentage shall be computed on sales of not less than $ 200,000, and said initial loss shall be deducted from the aggregate amount of the net covered, proved losses, ascertained in the adjustment.
The policy or bond is made subject to a number of other provisions. The first defines the class of debtors who shall be deemed to be insolvent for the purposes of the bond; the second relates to the credit ratings of such insolvent debtors, and limits the recovery of a certain per cent of the gross loss. Clause three is in part as follows:
Clause four requires the indemnified to use diligence in procuring the largest possible amounts from insolvents. Clause six relates to the amount to be deducted in the adjustment from each gross loss. Other provisions in the policy provide, in detail, the manner of handling insolvent estates, but do not affect the question presented by this appeal.
Appellee demurred to the amended complaint, for the reason that it did not state facts sufficient to constitute a cause of action which demurrer was sustained by the court. Appellant electing to abide by its amended complaint and exception to the ruling of the court in sustaining the demurrer thereto, final judgment was rendered in favor of appellee. Appellant has...
To continue reading
Request your trial