Southwestern Bell Tel. Co. v. Ocean Acc. & Guar. Corp.
| Decision Date | 05 March 1938 |
| Docket Number | No. 9581.,9581. |
| Citation | 22 F. Supp. 686 |
| Parties | SOUTHWESTERN BELL TELEPHONE CO. v. OCEAN ACCIDENT & GUARANTEE CORPORATION, Limited. |
| Court | U.S. District Court — Western District of Missouri |
Hume & Raymond, of Kansas City, Mo., for plaintiff.
Harding, Murphy & Tucker, of Kansas City, Mo., for defendant.
From a judgment upon a verdict of a jury on each of three counts of the petition the defendant has moved for a new trial.
The suit is designated as an "Action on Insurance Policy." It was alleged in the petition that the defendant was engaged, among other things, in the writing of employer's liability insurance, and that, on November 16, 1924, it wrote such policy upon the Kansas City Telephone Company. This policy was effective for three years, which means its termination by expiration on November 16, 1927.
On January 22, 1927, almost one year before the termination of the policy, the affairs of the Kansas City Telephone Company were taken over by the plaintiff, Southwestern Bell Telephone Company. The latter company took over all of the assets of the first named company and assumed all of its liabilities. By this arrangement, the policy in suit did not become effective as an executory contract on the future operations of the Southwestern Bell Telephone Company, but, as stated informally by counsel, it specially insured the new corporation, and, at that date, the policy terminated on the Kansas City Telephone Company as an employer for the reason that it discontinued its business.
At a later date three different parties who had been employees of the Kansas City Telephone Company made claims for damages against the plaintiff, Southwestern Bell Telephone Company. These claims, however, were for damages which they asserted accrued to them while employed by the Kansas City Telephone Company. The dates of such accrual of liability were fixed within the time that the defendant's policy or contract of liability insurance was effective on the Kansas City Telephone Company, that is to say, some time after the 16th of November, 1924, and prior to January 22, 1927.
The petition avers that the defendant was notified, but denied liability on account of such claims, and that the plaintiff was compelled to investigate and make settlement thereof. This duty, it is asserted, devolved upon the defendant, and that, because of its breach of its obligation, this suit was instituted to recover for expenses and payments made to discharge the claims.
The defendant by its answer denied the right of the Kansas City Telephone Company to transfer a policy or the liabilities thereunder to the plaintiff. It asserted that such contracts were personal and that such transfer could not be made without its consent. No issue was raised in the matter of notice to the defendant, but the sole issue was whether the plaintiff had a right by assignment from the Kansas City Telephone Company to prosecute this action.
The motion for new trial substantially raises the same contention, although there were some complaints as to alleged procedural errors.
Only two points need to be considered: (a) Whether the plaintiff has a right as an assignee of the Kansas City Telephone Company to prosecute this action, and, (b) whether, if so, there were prejudicial procedural errors.
1. On the question of the right of the plaintiff to prosecute the action as an assignee, it is uniformly ruled that a right of action arising out of a contract may generally be assigned. There are some exceptions to this rule. 6 C.J.S., Assignments, § 31, p. 1080.
Counsel for the defendant has argued earnestly and briefed his case industriously upon the theory that it was an assignment of a policy prospective or executory in its nature, and that such a contract, being personal, could not be transferred or assigned without the consent of the defendant. There is no question about this rule. The only question here present is whether, after the loss has occurred, the policy may be assigned, or, rather, an action on the policy may be transferred.
14 R.C.L. § 182, p. 1004, specifically states that: "A provision in a policy against assignment does not apply to...
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