Slavens v. Standard Acc. Ins. Co.

• Decision Date: 06 August 1928
• Docket Number: No. 5385.,5385.
• Citation: 27 F.2d 859
• Parties: SLAVENS v. STANDARD ACC. INS. CO. OF DETROIT, MICH.
• Court: U.S. Court of Appeals — Ninth Circuit

27 F.2d 859 (1928)

SLAVENS v. STANDARD ACC. INS. CO. OF DETROIT, MICH.

No. 5385.

Circuit Court of Appeals, Ninth Circuit.

August 6, 1928.

Lester H. Loble and Hugh R. Adair, both of Helena, Mont., for plaintiff in error.

E. G. Toomey, of Helena, Mont., for defendant in error.

Before GILBERT, RUDKIN, and DIETRICH, Circuit Judges.

GILBERT, Circuit Judge (after stating the facts as above).

It is urged as ground of demurrer that the plaintiff does not bring himself within the terms of the policy, in that he fails to allege that the notice required by the policy was given to the defendant. The policy provided indemnity, first, to Ernst, the named assured, against loss from liability imposed by law upon him for damages on account of bodily injuries; second, it bound the defendant to indemnify, "in the same manner and under the same conditions as the named assured is indemnified hereunder, any person or persons while riding in or legally operating any of the automobiles described herein, * * * provided such use or operation is with the permission of the named assured," and it contains this provision: "The unqualified term `assured,' wherever used in this policy, shall include in each instance any other person, firm, or corporation entitled to indemnity under the provisions and conditions of this clause, but the qualified term `named assured' shall apply only to the assured named and described as such in the declarations." Liability upon the indemnity contract is conditioned upon the provision that the "assured," upon the occurrence of an accident, shall give the defendant immediate written notice thereof, with fullest information obtainable, and like notice, with full particulars of any claim made on account of such accident, and that, if thereafter any suit be brought against the assured, he shall immediately forward to the company every summons or other process served on him.

It is clear that the word "assured," thus used, refers, not to Ernst, but to the other persons entitled to indemnity under the provisions of the policy. The defendant points out that it is not alleged in the complaint that Weinsheimer ever gave the defendant notice of the accident, or of the particulars thereof, or notified it of the action against him, or sent it copies of summons and complaint in that action, and argues that the notices furnished by the plaintiff and by Ernst, as alleged in the complaint, were not sufficient to comply with the terms of the policy; that the plaintiff can recover only through Weinsheimer's right; that, if Weinsheimer had no right to recover, the plaintiff had none; that Weinsheimer was to be indemnified only on condition that he gave the defendant the required notices; that, having failed to give those notices, the defendant is relieved from obligation to indemnify him; and that the plaintiff can recover only what the defendant was under obligation to pay to Weinsheimer.

The crucial question in the case is whether the contract of insurance is an indemnity contract against actual loss, or is a contract of insurance against liability for loss or damage. "Whether it is the one or the other depends upon the intention of the parties, as evinced by the phraseology of the agreement or covenant in the policy, * * * there being a marked difference between a contract of insurance against loss and one against liability." 36 C. J. 1057. "Where the policy provides that the insured shall immediately notify the company in case of accident or injury, that the company would defend actions growing out of injuries, in the name of insured, and that insured should not settle any claim or incur any expense without the consent of the company, it is generally to be held a policy of indemnity against liability for damages." 36 C. J. 1058.

The case at bar comes within the definition so quoted. While it expresses the obligation of the company to indemnify the assured against "loss from the liability imposed by law" upon him for damages on account of bodily injuries accidentally sustained, it also contains the condition that the insured shall notify the company of the accident, that he shall not voluntarily assume any liability or settle any claim or incur any expense on account thereof without the consent of the company, and that the company will defend in the name and on behalf of the assured any suit against him to recover damages on account of bodily injuries. Among the cases supporting the text above quoted are Maryland Casualty Co. v. Peppard, 53 Okl. 515, 157 P. 106, L. R. A. 1916E, 597; Blanton v. Cotton Mills Co., 103 Kan. 118, 172 P. 987, L. R. A. 1918E, 541; Stephens v. Pennsylvania Casualty Co., 135 Mich. 189, 97 N. W. 686, 3 Ann. Cas. 478; Anoka Lumber Co. v. Fidelity & Casualty Co., 63 Minn. 286, 65 N. W. 353, 30 L. R. A. 689; Schambs v. Fidelity & Casualty Co. (C. C. A.) 259 F. 55, 6 A. L. R. 1231; Fenton v. Poston, 114 Wash. 217, 195 P. 31; Finkelberg v. Continental Cas. Co., 126 Wash. 543, 219 P. 12.

The question arises whether Weinsheimer's failure to give the defendant notice of the accident immediately after its occurrence, with the fullest information obtainable, and full particulars of any claim made against him on account thereof, is fatal to the right of the plaintiff herein to recover on a complaint which alleges that all the prescribed information so stipulated for was promptly furnished by both the plaintiff and by Ernst. In fire and life insurance it is generally held that a stipulation in the policy as to the person by whom notice is to be given is of the essence of the contract. 33 C. J. 9; 36 C. J. 1100; 14 R. C. L. 1336; Ayres v. Hartford Fire Ins. Co., 17 Iowa,...