City of Lexington v. Home Indemnity Co.

BuogdeN, I. The determinative questions of law are: 1. Does the indemnity policy cover the injury sustained by R. L. Green ? 2. Did the request of defendant’s attorney for an extension of time to file answer in the Green suit constitute a general appearance in the litigation, and thus bind the defendant to the payment of the- judgment rendered ? The policy of indemnity covered bodily injuries “by any person or persons not employed by the assured while within or upon the premises described in Special Condition 4, ... or while otherwise about the work of assured, and considered by reason of and during the progress of business operations described in Special Condition 4.” Special Condition 4 covered: (a) “Electric light and power companies — all operations,” etc.; (b) “water works — all operations,” etc. The coverage for bodily injury to one not employed by the city was limited to such persons as were “about the work of the assured and caused by reason of and during the progress of business,” etc. The evidence disclosed that neither the water works department nor light department of the city was engaged in any “business operation” at the time Green was injured. An examination of the wording of the policy does not lead this Court to the conclusion that said policy, either by express language or by reasonable implication, undertook to cover the maintenance of the equipment and structures of the city. While, of course, policies of insurance must be construed liberally in favor of coverage, the law does not permit a new contract to be made for parties in the guise of liberal construction. Therefore, the first question of law is answered in the negative. In considering the second question of law, it is well settled that a request for time, made by a party to an action, nothing else appearing, constitutes a general appearance and waives irregularity or lack of service of process. Moreover, if a party makes a general appearance in a cause, he will be bound by the orders and decrees of the court duly *778 made therein. Cook v. Bank, 129 N. C., 149, 39 S. E., 746; Scott v. Life Association, 137 N. C., 515, 50 S. E., 221. In the ease at bar, however, the indemnity company was not a party to the suit of R. L. Green v. City of Lexington. It was not named in the summons. The policy of insurance stipulated that the defendant would make investigations and defend actions brought against the assured, the city of Lexington. Manifestly, when the attorneys for the defendant requested an extension of time to file answer to the complaint, such request was made for and in behalf of the city of Lexington. Moreover, as the defendant was not a party to the suit, the principles of law applicable to parties would not be available as a means of imposing liability upon the defendant for failure to pay the Creen judgment. Affirmed.