St. Paul Mercury & Indemnity Co. v. Ritchie

• Decision Date: 25 November 1940
• Docket Number: 34280
• Citation: St. Paul Mercury & Indemnity Co. v. Ritchie, 190 Miss. 8, 198 So. 741 (Miss. 1940)
• Parties: ST. PAUL MERCURY & INDEMNITY CO. v. RITCHIE
• Court: Mississippi Supreme Court

198 So. 741

190 Miss. 8

ST. PAUL MERCURY & INDEMNITY CO. v. RITCHIE

No. 34280

Supreme Court of Mississippi

November 25, 1940

Suggestion Of Error Overruled December 23, 1940.

APPEAL from the circuit court of Harrison county, HON. L. C. CORBAN Judge.

Action by Mrs. M. C. Ritchie against the St. Paul Mercury &amp Indemnity Company on an employers' liability insurance policy. Judgment for plaintiff, and defendant appeals. Reversed and judgment directed for defendant.

Reversed and judgment here accordingly.

Wallace & Greaves, of Gulfport, for appellant.

Contracts of insurance are contracts of indemnity resting upon the conditions specified in the contract embodying the agreement of the parties, and, where the provisions of the contract are clear and unambiguous, they are to be construed and applied like any other written contract in which the intention of the parties to it must be sought in the contract itself.

Miss. Mutual Ins. Co. v. Ingram, 34 Miss. 215; Am. Life & Acc. Ins. Co. v. Nirdlinger, 113 Miss. 74, 73 So. 875, 4 A. L. R. 871; Continental Casualty Co. v. Hall, 118 Miss. 871, 80 So. 335; U.S. Fid. & Guaranty Co. v. Parsons, 154 Miss. 587, 122 So. 544; Ga. Casualty Co. v. Cotton Mills Products Co., 159 Miss. 396, 132 So. 73; New Amsterdam Cas. Co. v. Perryman, 162 Miss. 864, 140, So. 342; Berry v. Lamar Life Ins. Co., 165 Miss. 405, 142 So. 445, 145 So. 887; Merchants Co. v. Hartford Acc. & Ind. Co. (Miss.), 188 So. 571; Liverpool, London & Globe Ins. Co. v. Kearney, 180 U.S. 132, 45 L.Ed. 460.

It is the duty of the court to enforce unambiguous contracts as written, and not to make contracts for the parties and then enforce them as reformed.

Berry v. Lamar Life Ins. Co., 165 Miss. 405, 142 So. 445, 145 So. 885; Continental Cas. Co. v. Pierce, 170 Miss. 67, 154 So. 279; American Bankers' Ins. Co. v. White, 171 Miss. 677, 158 So. 346; Williams v. Batson (Miss.), 187 So. 236; World Fire & Marine Ins. Co. v. King (Miss.), 191 So. 665.

A written contract cannot be changed, altered or modified by a subsequent oral agreement without an additional consideration supporting the new agreement.

Edrington v. Stephens, 148 Miss. 583, 114 So. 387; Pritchard v. Hall, 175 Miss. 578, 167 So. 629.

The principles of the general law of agency are applicable to insurance companies and their agents.

Germania Life Ins. Co. v. Bouldin, 100 Miss. 660, 56 So. 609; American Bankers' Ins. Co. v. Lee, 161 Miss. 85, 134 So. 836; Globe Mutual Life Ins. Co. v. Wolff, 95 U.S. 326, 24 L.Ed. 387; N.Y.Life Ins. Co. v. McCreary (8 C. C. A.), 60 F.2d 355.

The authority of an agent to bind his principal rests upon the powers conferred upon him by the principal.

Gulfport & Miss. Coast Traction Co. v. Faulk, 118 Miss. 894, 80 So. 340; Cape County Savings Bank v. Gwin Lewis Grocery Co., 123 Miss. 443, 86 So. 275; Wynn v. Hoffman (Ala.), 82 So. 32; N.Y.Life Ins. Co. v. McCreary (8 C. C. A.), 60 F.2d 355; 2 C. J. S. 1188, sec. 92.

A person dealing with an agent must know the extent of his authority to act for his principal and cannot hold the principal on the agent's agreement beyond the scope of his authority.

Philip Gruner Lbr. Co. v. Algonquin Lbr. Co., 123 Miss. 157, 85 So. 191; Wellford & Withers v. Arnold, 162 Miss. 786, 140 So. 220; Aetna Ins. Co. v. Singleton, 174 Miss. 556, 164 So. 13.

To construe a state statute (Section 5196, Code of 1930) creating a statutory agent to act authoritatively for an insurance company as to all of the duties and liabilities imposed by law upon it in virtue of a lawful written contract of insurance that clearly defines the risk it assumed for, and the limit of its obligation to, the insured so as to confer upon such agent the power to materially enlarge the risk and obligation thus assumed under the contract, without the consent of the insurer and without an additional consideration, impairs the obligation of the contract and violates the contract clause of the Constitution of the United States, Art. 1, Section 10, Clause 1.

Tucker Printing Co. v. Bd. of Sup'rs of Attala County, 171 Miss. 608, 158 So. 336; Pryor et al., Com'rs of Sabougla Drainage Dist., v. Goza, 172 Miss. 46, 159 So. 99; Hendrickson v. Apperson, 245 U.S. 105, 62 L.Ed. 178; Hartford Acc. & Ind. Co. v. Delta & Pine Land Co., 292 U.S. 143, 78 L.Ed. 1178, 98 A. L. R. 928; W. B. Worthen Co., Trustee, v. Kavanaugh, Trustee, 295 U.S. 56, 79 L.Ed. 1298; Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 U.S. 673, 74 L.Ed. 1107.

To so construe Section 5196, denies the insurer the protection afforded by the due process clause of the Constitution of the United States, Amendment 14, Section 1.

Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 U.S. 673, 74 L.Ed. 1107.

The right to make lawful contracts pertaining to business and to have them enforced in the courts as written, where the terms are not ambiguous, is a right granted by the law of the land, particularly Art. I, Sec. 10, Clause 1, and Amendment 14, Sec. 1 of the Constitution of the United States.

Jones v. Miss. Farms Co., 116 Miss. 295, 76 So. 880; Hartford Fire Ins. Co. v. Williams, 149 Miss. 123, 115 So. 199; Lochner v. N. Y., 198 U.S. 45, 49 L.Ed. 937; Adkins v. Lyons, 261 U.S. 525, 67 L.Ed. 785; Advance-Rumley Thresher Co. v. Jackson, 287 U.S. 283, 77 L.Ed. 306; Hartford Acc. & Ind. Co. v. Delta & Pine Land Co., 292 U.S. 143, 78 L.Ed. 1178, 92 A. L. R. 928; Coppage v. Kansas, 236 U.S. 1, 59 L.Ed. 441.

The terms of a written contract cannot be varied by parol testimony, in the absence of fraud or mistake, and this is a rule of substantive law.

Kendrick v. Robertson, 145 Miss. 583, 11 So. 99; Edrington v. Stephens, 148 Miss. 583, 114 So. 387; McArthur v. Fillingame, 184 Miss. 869, 186 So. 828; Taylor v. C. I. T. Corp. (Miss.), 191 So. 60.

As regards the obligation of the appellant to pay the medical, surgical, and hospital expenses incurred by the appellee for the treatment of the injured employee, the first sentence of Paragraph D of the insuring agreements in the contract obligates the appellant to reimburse the appellee for any expense incurred by her in providing first aid treatment, but no such expenses were incurred. The second sentence obligates the appellant to furnish, at its own cost and expense, through a physician or a hospital designated by it, such medical, surgical, hospital and ambulance service as is necessary for the treatment of the injuries sustained by the injured employee within the limit of $ 500, which the appellant is willing to pay, and it tendered this amount, plus interest, and some court costs.

White & Morse, of Gulfport, for appellee.

Section 5196, Code 1930, renders an agreement made by an agent and adjuster of an insurance company the act of the company, regardless of contrary provisions in the policy. This is not now an open question in Mississippi.

Capital Paint & Glass Co. v. Saint Paul Mercury Ind. Co., 180 Miss. 341; London, etc., Ins. Co. v. R. R., 97 Miss. 165; Germania Ins. Co. v. Bouldin, 100 Miss. 660; Agricultural Ins. Co. v. Anderson, 120 Miss. 278; Lamar Life Ins. Co. v. Kemp, 154 Miss. 890; Interstate Ins. Co. v. Ruble, 160 Miss. 206; Home Ins. Co. v. Thornhill, 165 Miss. 787; Reliance Ins. Co. v. Cassity, 173 Miss. 840; Aetna Ins. Co. v. Lester, 170 Miss. 353; Big Creek Drug Co. v. Ins. Co., 115 Miss. 333; Aetna Ins. Co. v. Smith, 117 Miss. 327; Home Ins. Co. v. Gibson, 72 Miss. 58; Travelers Fire Ins. Co. v. Price, 169 Miss. 541.

It is contended there was no consideration for the agreement to pay Mrs. Ritchie in that it was a subsequent promise. There was a very vital consideration in that the release of a claim for which appellant could have been required to pay $ 25, 000 was secured. The signing of the release was the consideration. Max Moore parted with his "disputed claim, " and the Insurance Company agreed to pay the $ 107 and to pay Mrs. Ritchie the expense. This promise was as much a part of the consideration as the $ 107.

We are not seeking to vary the release. The release recites the payment to Max Moore is to cover his injuries. The agreement we are suing on is a verbal promise to Mrs. Ritchie to pay the expense. True, Moore would not sign his release until Dowd agreed with Mrs. Ritchie, but that is no variance of an agreement between appellant and Max Moore.

The real consideration may always be shown, especially so, when the expressed consideration is inadequate.

Campbell v. Davis, 94 Miss. 164; Dodge v. Cutrer, 101 Miss. 844; L. R. A., 1918D, 1158; 22 C. J. 1157.

Appellant by the tender concedes the cause of action to the extent of the tender.

Sims v. Hardin, 132 Miss. 137, 62 C. J. 697.

By this tender and in their plea, appellant admits that when the release was signed there was a contemporaneous agreement to pay Mrs. Ritchie $ 500, thereby themselves saying the release was not all, or the only agreement. Appellant says there was another agreement, true, but we vary the terms of the release. Therefore, both sides say there was an agreement to pay Mrs. Ritchie, the only difference being the amount of this payment.

Argued orally by R. A. Wallace, for appellant, and by W. H. White, and S. E. Morse, for appellee.

McGehee, J., Ethridge, J., dissenting.

OPINION

McGehee, J.

There was issued and delivered to the appellee, who owned and operated a dairy farm in Harrison County, Mississippi, a certain indemnity insurance contract, dated March 19, 1938 known as a "Standard Employer's Liability Insurance Policy, " by the terms of which the appellant obligated itself to indemnify and save harmless the appellee, as an employer, from any loss on account of personal injuries to her employees who were covered by the policy, where such injuries were caused by the negligence of the employer, and...