Walker v. American Automobile Ins. Co.

• Decision Date: 13 April 1934
• Docket Number: No. 22770.,22770.
• Parties: JAMES P. WALKER, TO THE USE OF EDWARD FORISTEL, ASSIGNEE, RESPONDENT, v. AMERICAN AUTOMOBILE INSURANCE COMPANY, A CORPORATION, GARNISHEE OF BROOKS FAULK, APPELLANT.
• Court: Missouri Court of Appeals

70 S.W.2d 82

JAMES P. WALKER, TO THE USE OF EDWARD FORISTEL, ASSIGNEE, RESPONDENT, v. AMERICAN AUTOMOBILE INSURANCE COMPANY, A CORPORATION, GARNISHEE OF BROOKS FAULK, APPELLANT.

No. 22770.

St. Louis Court of Appeals. Missouri.

Opinion filed April 13, 1934.

Motion for rehearing filed April 13, 1934.

Motion for rehearing overruled April 17, 1934.

Appeal from Circuit Court of City of St. Louis. — Hon. Henry A. Hamilton, Judge.

AFFIRMED.

Bryan, Williams, Cave & McPheeters for appellant.

(1) The provision of the liability insurance policy requiring the insured, upon the occurrence of any accident, to give immediate written notice to the insurer with the fullest information obtainable at the time is a valid condition. The failure of the insured to comply with that condition prevents the insured and any person injured by the insured from recovering against the insurer, not on the ground of a forfeiture of the policy, but on the ground that the notice provision is a condition precedent to any rights under the policy. Columbia Paper Stock Co. v. Fidelity & Casualty Co., 104 Mo. App. 157; National Paper Box Co. v. Aetna Life Ins. Co., 170 Mo. App. 361; United States Fidelity & Guaranty Co. v. Carmichael Co., 195 Mo. App. 93; Hill v. Jackson, 272 S.W. 105, 106; St. Louis Architectural Iron Co. v. New Amsterdam Casualty Co., 40 Fed. (2d) 344 (C.C.A. 8th Cir.); Commercial Casualty Ins. Co. v. Fruin-Colnon Contracting Co., 32 Fed. (2d) 425; Clements v. Preferred Acc. Ins. Co., 41 Fed. (2d) 470; 76 A.L.R. 180 et seq.; Travelers' Ins. Co. v. Myers, 62 Ohio St. 529; McCarthy v. Rendle et al., 230 Mass. 35; Travelers' Ins. Co. v. Scott, 218 S.W. 53. (2) The notice provision is found in the same paragraph and under the same heading in the policy as are a number of other conditions. The courts quite uniformly hold that the other provisions are conditions which must be fulfilled by the insured. The same effect must be given to the notice requirement as is given to the other requirements. Finkle v. Western Automobile Ins. Co., 26 S.W. (2d) 843; Cowell v. Employers' Indemnity Corp., 326 Mo. 1103, 34 S.W. (2d) 705; Ornallas v. Moynihan, 16 S.W. (2d) 1107; Merriman v. Maryland Casualty Co., 147 Wash. 579; Miller v. Metropolitan Casualty Ins. Co., 50 R.I. 166; United States Casualty Co. v. Breese, 21 Ohio App. 521; Kana v. Fishman (Mass.), 176 N.E. 922; Berg v. Associated Employers' Reciprocal & Indemnity Exchange, 47 Idaho, 386; Kruger v. California Highway Indemnity Exchange, 201 Cal. 672 (cert. denied); 72 A.L.R. 1448 et seq.; Metropolitan Casualty Ins. Co. v. Colthurst, 36 Fed. (2d) 559 (cert. denied). (3) A delay of one year in giving notice of the accident is not "immediate notice," for that term, while not given a literal construction, means that the notice must be given with diligence and in a reasonable time. Columbia Paper Stock Co. v. Fidelity & Casualty Co., 104 Mo. App. 157; National Paper Box Co. v. Aetna Life Ins. Co., 170 Mo. App. 361; La Force v. Ins. Co., 43 Mo. App. 518; Burnham v. Ins. Co., 75 Mo. App. 391; St. Louis Ins. Co. v. Kyle, 11 Mo. 278; Phillips v. Ins. Co., 19 Mo. 22; St. Louis Architectural Iron Co. v. New Amsterdam Casualty Co., 40 Fed. (2d) 344; 76 A.L.R. 53 et seq.; Southern Surety Co. v. Heyburn, 234 Conn. 739; 76 A.L.R. 66 et seq. (4) Since a plaintiff in a garnishment proceeding has no right superior to his judgment creditor, the assured's breach of the notice clause is available to the insurer against the injured party. Finkle v. Western Auto Ins. Co., 26 S.W. (2d) 843; Clements v. Preferred Accident Ins. Co., 41 Fed. (2d) 470; Lorando v. Gethro, 228 Mass. 181. (a) The nonliability of the appellant does not rest on a forfeiture of the policy, but on the ground of a breach of an essential provision of the policy by the insured. Finkle v. Western Automobile Ins. Co., 26 S.W. (2d) 847. (5) The notice provision in the policy here is a condition relating to the liability under the policy. Salts v. Prudential Ins. Co., 140 Mo. App. 142; Hurt v. New York Life Ins. Co., 53 Fed. (2d) 453. Where, as in this case, the notice is not given for almost a year after the accident happened, it is not necessary for the insurer to plead or to prove that it was prejudiced by reason of the failure to give the notice. St. Louis Architectural Iron Co. v. New Amsterdam Cas. Co., 40 Fed. (2d) 334, l.c. 347, 348; National Paper Box Company v. Aetna Life Insurance Company, 170 Mo. App. 370; Heller v. Standard Accident Insurance Company, 27 Ohio App. 405.

Foristel, Mudd, Blair & Habenicht and James J. O'Donohoe for respondent.

(1) The policy in this proceeding unconditionally insures the assured against liability on account of an accident resulting in bodily injuries to or death of one person in the sum of $5,000; therefore, the notice question is not involved. Goerss v. Ind. Co. of America, 223 Mo. App. 316, writ of certiorari quashed, en banc, 321 Mo. 1035; Kurre v. American Ind. Co., 223 Mo. App. 406, 414. (2) The appellant has dual natures, for it is an insurer and also engaged in the practice of law. It was paid for both. As a lawyer, it promised unconditionally "to defend in the name and on behalf of the assured all suits thereon, whether groundless or not." Failure to defend the damage suit constituted a breach of the policy contract upon appellant's part and put an end to the defense based upon failure of assured to give notice of the accident. Goerss v. The Ind. Co. of America, 223 Mo. App. 316 (cases cited), certiorari quashed 321 Mo. 1035 (cases cited); Brucker v. Georgia Cas. Co., 326 Mo. 856, 865; Independent M. & C. Co. v. Aetna L. Ins. Co., 68 Mont. 152, 158 (cases cited). (3) The unconditional insuring and notice clauses are in conflict and the latter must yield to the former. Kurre v. American Indemnity Co., 223 Mo. App. 406, 414; Goerss v. The Indemnity Co. of America, 223 Mo. App. 316, writ of certiorari quashed, en banc, 312 Mo. 1035. The unconditional insuring and notice clauses are inconsistent; and it is well settled that where two clauses in a contract are inconsistent, the first governs rather than the last; and, further, where there is a conflict, the clause promising indemnity controls over the one forfeiting indemnity. Drucker v. Western Ind. Co., 204 Mo. App. 516; Howell v. Sec. Mut. Life Ins. Co., 215 Mo. App. 692, writ of certiorari quashed, 305 Mo. 607; State ex rel. v. Ellison, 266 Mo. 580; Employers' Liability Assur. Corp. v. Morrow, 143 Fed. 750, 755. (4) The policy in question contains no words of forfeiture for failure to give notice and courts refuse to import words to work a forfeiture. Dezell v. Fid. & Cas. Co., 176 Mo. 253, 281; Allman v. Commr. Travelers, 277 Mo. 678, 688, 689; Gratz v. Highland Scenic Railroad Co., 165 Mo. 211, 217; Shanebarg v. Nat. Acc. Soc., 263 S.W. (Mo. App.) 512, 513; Zackwik v. Fire Ins. Co., 225 S.W. (Mo. App.) 135; James v. Cas. Co., 113 Mo. App. 622, 630; Malo v. Fire Ins. Co., 282 S.W. (Mo. App.) 78, 79; Everett v. Ins. Co. (Mo. App.), 7 S.W. (2d) 463, 469; Hagelin v. Commonwealth Life Ins. Co., 106 Neb. 187; Watson v. Ocean A. & G. Corp., Ltd., 28 Ariz. 573; Windle v. The Empire State Surety Co., 151 Ill. App. 273; St. Paul Fire & M. Ins. Co. v. Owens, 69 Kan. 602; Pa. Fire & M. Ins. Co. v. Waggener, 44 Tex. Civ. App. 144; Connecticut Ins. Co. v. Colorado Co., 50 Colo. 424; Stinchcombe v. N.Y. Life Ins. Co., 46 Ore. 316; Taber v. Royal Ins. Co., 124 Ala. 681; Mason v. Ins. Co., 82 Minn. 336; American Nat. Ins. Co. v. Rardin (Okla.), 177 Pac. 601, 605; Niblack on Accident Insurance, Section 514, p. 794; Sov. Camp v. Meek, 185 Ark. 419, 421. The same doctrine applies to automobile liability, employers' liability and all other policies. Cowell v. Employer's Ind. Corp., 326 Mo. 1103, 1114, 1115; Ash-Grove Lime & Port. Cement Co. v. Southern Surety Co., 225 Mo. App. 712, 721; Hope Spoke Co. v. Maryland Cas. Co., 102 Ark. 1; George v. Aetna Cas. Co., 121 Neb. 647, 654, 655; Watson v. Ocean Acc. & G. Corp., 28 Ariz, 573; Employers' Liability Corp. v. Jones Lumber Co., 111 Miss. 759; Shirley v. American Automobile Ins. Co., 163 Wash. 136, 144; Slavens v. Standard Acc. Ins. Co., 27 Fed. (2d) 859, 861, 862. (5) Want of notice is neither a condition precedent nor warranty, especially where the policy does not contain such words, for courts do not rewrite policies to work forfeitures. Salts v. Ins. Co., 140 Mo. App. 142, 152, 153; Hurt v. New York Life Ins. Co., 53 Fed. (2d) 453, 454; Redman v. Aetna Ins. Co., 49 Wis. 431; Banco de Sonora v. Bankers' M. Cas. Co. (Iowa), 95 N.W. 232; 3 Cooley's Briefs on Ins., pp. 1893, 1894, 1895. (6) Time for giving notice is not of the essence of the insurance contract. Hablutzel v. Home Life Ins. Co. (Mo. App.), 52 S.W. (2d) 480, l.c. 482 (cases cited); Same case (Mo.), 59 S.W. (2d) 639; Hope Spoke Co. v. Maryland Cas. Co., 102 Ark. 1, 11; Liability Assur. Corp. v. Lumber Co., 121 Neb. 655, 642, 654. (7) Want of notice is always immaterial, unless it is shown that same resulted in substantial prejudice to insurer's rights, which has neither been alleged nor proven in this case. Furthermore, if the injuries appear to assured as trivial, want of notice will not work a forfeiture. Empire State Surety Co. v. Northwest Lumber Co., 203 Fed. 417; Parmelee v. Aetna Life Ins. Co., 166 Fed. 741; National Surety Co. v. Railroad, 200 Fed. 675; Gunsul v. American Surety Co., 308 Ill. 312, 322, aff. 225 Ill. App. 76; Melcher v. Ocean Acc. & Guar. Corp., 226 N.Y. 51, 56; Liability Assur. Corp. v. Jones Lumber Co., 111 Miss. 759, 763. (8) The courts have gone farther and have held that where the stipulation to defend is in the policy and insurer fails to defend or negligently defends, or where insurer fraudulently or oppressively or in bad faith fails to settle, insurer is liable not only for the limit in the policy, but for the face of the judgment, regardless of amount. Attleboro Mfg. Co. v. Ins. Co., 240 Fed. 573 (reported also...