Southwestern Surety Ins. Co. v. Thompson

• Decision Date: 20 November 1915
• Docket Number: (No. 824.)<SMALL><SUP>*</SUP></SMALL&gt
• Parties: SOUTHWESTERN SURETY INS. CO. v. THOMPSON et al.
• Court: Texas Court of Appeals

180 S.W. 947

SOUTHWESTERN SURETY INS. CO. v. THOMPSON et al.

(No. 824.)^*

Court of Civil Appeals of Texas. Amarillo.

November 20, 1915.

On Motion for Rehearing, December 18, 1915.

Appeal from District Court, Potter County; Jas. N. Browning, Judge.

Action by J. C. Thompson against the Southwestern Surety Insurance Company and W. M. Rice. From a judgment for plaintiff and a judgment over in favor of defendant Rice, who counterclaimed, the first-named defendant appeals. Reformed and affirmed.

Lumpkin & Harrington, of Amarillo, and J. T. Suggs, of Denison, for appellant. Madden, Trulove, Ryburn & Pipkin, Synnott & Underwood, and R. E. Underwood, all of Amarillo, for appellees.

HENDRICKS, J.

J. C. Thompson sued W. M. Rice on account of certain personal injuries received as the servant of said Rice, and also joined in said suit the appellant, the Southwestern Surety Insurance Company, on account of an employer's liability insurance policy, executed by said insurance company in favor of Rice. The appellee, Rice, Thompson's employer, filed a cross-action against said insurance company, setting up a certain policy of employer's liability insurance, covering a period from January 1, 1913, to January 1, 1914, and alleging an oral contract with the agent of said insurance company for a renewal of said policy upon the same terms and conditions, except an increase of the premium for the succeeding year. The injury to Thompson occurred in 1914, and the insurance company, after a plea in abatement, alleged the issuance and delivery of another policy for the year 1914, covering the period of the time of the accident, and which by its terms specially excepted buildings, containing construction of reinforced concrete, which was the character of the building under construction by Rice at the time the plaintiff Thompson, his employè, was injured. Thompson recovered a verdict of $7,500 against Rice on his cause of action for personal injuries; and the jury returned an unconditional verdict against the insurance company in the sum of $5,500, $500 of which is presumably the reasonable attorney's fees proven upon the trial of the case, the balance representing the maximum sum designated in the policy.

Upon the original hearing of this cause in this court, the judgment of the lower court, in favor of Rice, was reversed and remanded on the theory of misjoinder of causes of action and of parties. The appellee Rice seriously questions the judgment of this court upon the contention that the assignments, nor the plea upon which the same were based, though followed by propositions, did not strictly raise the question of misjoinder, and this position is correct, and this court committed error upon that point. It is only upon the proposition that the question discussed in the original opinion was really not properly raised that this rehearing is granted, and not that the position formerly assumed is incorrect if the assignment and the plea had been sufficiently broad to cover the question. A subsequent investigation and analysis actuates this statement, though of course the question is not decided. On account of the absence of submission, and the lack of a verdict against the insurance company in favor of Thompson, the plaintiff, we shall treat all assignments, and the alleged errors raised by the same, addressed to that part of the litigation between plaintiff and the insurance company, as immaterial and harmless.

The fourth assignment of error, complaining of the action of the court in overruling appellant's plea in abatement to the cross-action of Rice, states that the contract of insurance pleaded by Rice expired according to its own terms prior to the day of the injury to the plaintiff, and that in said cross-action it is admitted that Rice held a policy issued by this defendant for the year 1914, which precluded liability for injuries to Rice's employès upon buildings whose walls were to be constructed of reinforced concrete, and that the suit should be further abated because the same, as shown by his cross-action, was prematurely brought. For apparent reasons, the latter question, that the suit was prematurely brought by Rice against the insurance company, will only be discussed. The insurance policy covering the period from January 1, 1913, to January 1, 1914, provides that the insurance company —

"hereby insures W. M. Rice * * * against loss and expense arising from claims upon the assured for damages on account of bodily injuries accidentally suffered, or alleged to have been suffered, during the period of this policy, by any employés of the assured, by reason of the prosecution of the work described herein."

The substance of other provisions is that when an accident occurs, the assured shall notify the company by written notice, and if a claim is made the assured shall also notify the company and the latter, "at its own expense, will settle or contest the same." If an employè sues the employer on account of an accident, the assured shall forward to the company every process served upon him; and it is again provided that the latter, at its own expense, will settle or defend said suit whether groundless or meritorious, and that the moneys expended in the defense shall not be included within the liability fixed in the policy:

"The assured shall not assume any liability, nor interfere with any negotiation for settlement or any legal proceedings, nor incur any expense nor settle any claim except at his own cost, without the written consent of the company."

Paragraph L provides:

"No action shall lie against the company for any loss or expense under this policy unless it shall be brought for loss or expense actually sustained and paid in satisfaction of a final judgment, within ninety days from the date of said judgment after the trial of the issue."

A "rider" was indorsed upon this 1913 policy eliminating the foregoing paragraph L. The policy claimed by the company to have been issued for the year 1914 contained the same paragraph L, without eliminating the rider, and also excepted work of a reinforced concrete nature, with increased premiums in consideration of the policy.

W. M. Rice, after pleading in general terms the policy of 1913, in his cross-action also alleged the oral renewal thereof with the company's authorized agent, the payment of the premium, the accident to Thompson, the notice to the insurance company of Thompson's claim, as well as the forwarding of process in said suit; also the request of the company to defend the suit, averring the latter's denial of liability and the refusal to assume the burden of the litigation; and, in anticipation of the company's reliance upon the policy of 1914 (which excepted reinforced concrete construction), he averred the nondelivery of said policy to him, and a lack of knowledge of any of its terms different from the policy of 1913, except that of an increased premium, and that he had no knowledge of any exception, but continued to pay premiums, during the year 1914, based upon certain classifications, and relied upon a renewal of the policy of 1913, which included the character of construction in the Corsicana Orphans' Home, upon which Thompson was injured. He also alleged that the company knew that his contract with the state of Texas called for a reinforced concrete building, having executed his bond to the state as surety, and it knew that the graduated premiums paid by him in 1914 on his policy were on account of the construction of said building, and, that if such policy of 1914 was delivered, excepting reinforced concrete work, he was entitled to pay a corresponding increased premium rate and be protected accordingly. He then alleged:

"(32) This defendant shows to the court that said policy so issued to this defendant by his codefendant provides that: `No action shall lie against the company for any loss or expense under this policy unless it shall be brought for loss or expense actually sustained and paid in satisfaction of a final judgment, within ninety days from the date of said judgment, and after trial of the issue.' But this defendant further shows to the court that said policy also provides that upon the occurrence of an accident this defendant shall give said company notice, and that said company at its own expense will make such investigation as it may deem necessary, and, further, that `if a claim is made on account of an accident, the assured at its own expense will settle or contest the same,' and, further, that: `If a suit is brought on account of an accident the assured shall forward immediately to the company, or to its duly authorized agent, every process, and paper served on him. The company at its own expense will settle or defend said suit, whether groundless or not; the money expended in said defenses shall not be included in the limits of the liability fixed under this policy.'"

He then again averred, as upon the policy of 1913, his complete compliance with the terms of said policy and the repudiation by the company.

The court submitted to the jury that if the policy of 1914 was delivered to Rice, to find unconditionally for the insurance company, and on account of the jury's general verdict in favor of Rice, it evidently found nondelivery.

Bearing in mind that clause L in the policy of 1913, requiring that no action shall lie for loss or expense unless it shall be brought for loss and expense actually sustained and paid in satisfaction of a final judgment, was eliminated by the rider, appellant, however, contends, at least under the general demurrer to Rice's pleadings, attempting to raise the same question of prematureness of the suit,...