Zurich Gen. Acc. & L. Ins. Co. v. Fort Worth Laundry Co.

• Decision Date: 01 April 1933
• Docket Number: No. 12816.,12816.
• Citation: 58 S.W.2d 1058
• Parties: ZURICH GENERAL ACCIDENT & LIABILITY INS. CO., Limited, v. FORT WORTH LAUNDRY CO.
• Court: Texas Court of Appeals

Page 1058

58 S.W.2d 1058

ZURICH GENERAL ACCIDENT & LIABILITY INS. CO., Limited, v. FORT WORTH LAUNDRY CO.

No. 12816.

Court of Civil Appeals of Texas. Fort Worth.

April 1, 1933.

Appeal from Tarrant County Court; P. J. Small, Judge.

Action by the Zurich General Accident & Liability Insurance Company, Limited, against the Fort Worth Laundry Company. Judgment for defendant, and plaintiff appeals.

Affirmed.

McGown & McGown, B. E. Godfrey, and H. L. Logan, Jr., all of Fort Worth, for appellant.

V. R. Parker, of Fort Worth, for appellee.

CONNER, Chief Justice.

The appellant insurance company sued the appellee laundry company for the sum of $299.58, alleged to be due as unpaid premiums on a policy of insurance issued by the appellant company on the 12th day of October, 1929, and extending, as we infer, throughout the ensuing year. The policy in terms covered certain property and also bound the insurance company to compensate the employees of the laundry company in accord with the Workmen's Compensation Law (Vernon's Ann. Civ. St. art. 8306 et seq.). The laundry company had numerous employees including drivers of its delivery trucks, but no separation or classification of the different character of employees appears on the face of the policy. The premiums for covering workmen were based on percentages of the pay roll of the employees, the policy providing, among other things, that upon each quarter of the year following its issuance the insurance company had the right to examine the books of the laundry company for the purpose of determining the amount of the premiums.

The evidence shows that one P. H. Edwards had been providing the laundry company with insurance for several years but that on the occasion in question, presumably upon the expiration of a previous policy, secured the policy in question from the appellant company, not generally represented by him. It is undisputed that all sums due as premiums under the policy, except those in question, were regularly paid, the deficiency in payment of premiums on account of the laundry drivers alone being involved in this suit.

The laundry company defended upon the ground that its drivers were not employees within the meaning of the policy but mere soliciting and delivery agents who were compensated by commissions upon charges made for work done and delivered and that the laundry company had at all times within the knowledge of Edwards refused to take out insurance covering such drivers and that Edwards knew at the time of soliciting the policy in question that the laundry company would not accept a policy covering insurance for such drivers' injuries.

The evidence further shows that Edwards at the time of applying for the policy in question failed to disclose the knowledge he had of the laundry company's previous refusal to receive policies covering its drivers and knew that the said company would refuse to knowingly receive a policy covering injuries to its drivers.

The evidence further shows that upon the issuance of the policy it was delivered to Edwards for delivery, who received the initial premium provided for in the policy which was by Edwards returned to and delivered to the general agency of the insurance company. The policy does not appear to have been read by the manager of the laundry company upon its delivery by Edwards and Edwards at the time did not notify such manager that he had failed to inform the agent of the insurance company of the custom and refusal of the laundry company to cover its drivers. It further appears that after the delivery of the policy in accordance with the terms thereof, one or more auditors of the insurance company on several occasions applied to the laundry company for an audit of its books to determine the amount of the pay roll and the resulting sum due as premiums, and that upon each of these occasions such auditor was fully informed of the laundry company's refusal to pay premiums covering the pay roll of the drivers, notwithstanding which the insurance company continued during the life of the policy to receive and appropriate all sums due under the terms of the policy except the premiums now in controversy.

The case was submitted to the court without a jury and we have the trial court's findings of fact and conclusions of law before us which read as follows:

"1. I find that on or about the 12th day of October, 1929, the plaintiff caused to be executed and delivered to the defendants T. E. Cloud and Newton E. Gambrell, composing the partnership of the Fort Worth Laundry Company, that certain accident and public liability insurance policy covering all of the employees of the Fort Worth Laundry Company, a partnership. The contract of insurance here referred to is the same as that shown in the stenographer's transcript of evidence.

"2. I find that the said policy above described was delivered to the Fort Worth Laundry Company, a partnership, and that N. E. Gambrell and T. E. Cloud at the time did not know that the policy that had been delivered covered chauffeurs and laundry drivers and did not know it did until the auditor for the plaintiff called their...