Zeitz v. Zurich General Accident & Liability Insurance Company, Ltd.
| Decision Date | 15 July 1949 |
| Citation | 67 A.2d 742,165 Pa.Super. 295 |
| Parties | Zeitz et al. v. Zurich General Accident & Liability Insurance Company, Ltd., Appellant |
| Court | Pennsylvania Superior Court |
Argued March 23, 1949.
Appeal, No. 58, Oct. T., 1949, from judgment of Municipal Court of Philadelphia County, Oct. T., 1947, No. 449, in case of Charles Zeitz et al., trading as Hygrade Bakery Company v Zurich General Accident and Liability Insurance Company, Ltd.
Assumpsit. Before Bonniwell, J., without a jury.
Verdict and judgment entered for plaintiff. Defendant appealed.
Howard R. Detweiler, with him Frank R. Ambler, for appellant.
Henry Arronson, with him Victor Blanc, for appellees.
OPINION
On October 24, 1941, the insurer issued a Standard Workmen's Compensation and Employer's Liability policy to Charles Zeitz and Philip Frank, trading as Hygrade Bakery Company, appellees, which was renewed in October, 1942, and again in 1943. On April 8, 1944, Vincent Santucci, a minor illegally employed by appellees, was injured while in the course of his employment. A compensation agreement was executed by Santucci, was approved by his parents and by the Workmen's Compensation Board, and compensation was paid in full under this agreement by the insurer. A ten percent penalty as additional compensation was paid by appellees because of Santucci's illegal employment. [1] Thereafter, on March 28, 1945, the minor, by his parents, instituted an action in trespass against appellees to recover damages for the injuries for which Santucci had already received full compensation. The insurer, notwithstanding demand, refused to defend the trespass action against appellees on the ground that the policy provisions hereinafter detailed did not provide coverage where the employe is illegally employed. Appellees were thereupon obliged to and did engage counsel who successfully defended the case: Santucci v. Frank, 356 Pa. 54, 51 A.2d 696. The employer now seeks to be reimbursed for counsel fees of $ 1,000.00, and the costs of printing briefs on appeal to the Supreme Court in the case of Santucci v. Frank, supra. It is conceded that the fees and costs are fair, just and reasonable for the services performed and for the printed argument. The matter was heard on complaint and answer by a judge sitting without a jury who found for appellees in the sum of $ 1,109.52. The insurer's motion for judgment n. o. v. was dismissed by the court below and this appeal followed.
The controlling question is whether, by the terms and provisions of the policy in effect at the time of suit, the insurer was obligated to defend the trespass action instituted by Santucci against appellees, for if such obligation exists, then the judgment of the court below must be affirmed. The pertinent contract provisions read as follows: Insurer agrees (Italics supplied.)
The insurer urges that since Santucci was unlawfully employed, no coverage existed by virtue of section One (b) of the policy which covered only such employes "as are legally employed" and, a fortiori, there was no duty on its part to defend an action instituted by an illegally employed minor. The insurer's contentions are without merit and the judgment will be affirmed.
Section 320 of the Workmen's Compensation Act of 1915, P. L. 736, as amended, 77 PS § 672, provides for compensation to minors, both legally and illegally employed, where neither the employe nor the employer has rejected the Act. [2] Prior to the amending Act of 1931, P. L. 36, the provisions of the Workmen's Compensation Act did not apply to illegally employed minors: Lincoln v. National Tube Co., 268 Pa. 504, 507, 112 A. 73. In Fritsch v. Pennsylvania Golf Club, 355 Pa. 384, 50 A.2d 207, it was held that an illegally employed minor may not maintain an action at law against his employer upon a cause of action based upon an injury sustained in the course of his employment where neither he nor the employer has rejected the Act. In such circumstances, the Workmen's Compensation Act was the exclusive remedy. In Santucci v. Frank, 356 Pa. 54, 51 A.2d 696, it was held that neither an illegally employed minor nor his parents may maintain an action of trespass for injury received by the minor in the course of his employment. The Court, at page 56, stated:
As it therefore is definitely settled Santucci could not recover in trespass, but did secure his redress under the Workmen's Compensation Act, the insurer's obligation for such compensation payments arose under clause One (a) [compensation clause] of the policy. Of course clause One (b) provided no coverage in these circumstances, being limited to cases where compensation for reasons assigned in the policy is not payable. The question then arises: Is insurer's obligation to defend under clause three of the policy correlated to and controlled by its obligation to indemnify, as set forth in One (b)? By thus reading the phrase "as are legally employed" of One (b) into clause three, the insurer contends its obligation to defend is restricted to actions brought by a certain group of employes, namely, "legally employed" persons; that Santucci concededly is not in that class.
An examination of the policy and its endorsements indicates that clause One (b) was designed to provide...
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