London Guarantee & Accident Co. v. Mississippi Central Railroad

Whitfield, O. The railroad company sued the insurance company for the •sum of $3,000, for the purpose of reimbursing itself for certain moneys paid out by the said railroad company in settlement of certain personal injury claims, for which it is alleged in the declaration the plaintiff held against the said insurance company an employer’s liability policy, by the terms of which the insurance company agreed and bound itself to indemnify the said railroad company against losses growing out of liability imposposed upon the railroad company for damages on account of bodily injuries or death accidentally suffered by employes while the said policy should be in force. There were a number of claims- set out in Exhibit A to the declaration, only two of which, the Fairchilds claim and the Messer claim,, were for a large amount. The insurance company’s first defense is that under the terms of the policy the said claim should not have been paid by the railroad company without the written consent of the insurance company. All this contention has been put definitely at rest in this state, insofar as the insistence is that there can be no" parol waiver of a written stipulation, by at least five express decisions, to wit, the cases of Insurance Company v. Gibson, 72 Miss. 58, 17 South. 13; Sheffy’s case, 71 Miss. 919, 16 South. 307; Matthews’ case, 65 Miss. 301, 4 South. 62; Rivaras’ case, 62 Miss. 727, and Bowdre’s case, 67 Miss. 631, 7 South. 596, 19 Am. St. Rep. 326. That the matter may not again be presented to us, after all the definite settlement, we set out here — 176 — what was said in the Gibson case, supra, on this precise point at page 63, 72 Miss., page 13, 17 South.: “It is insisted that the waiver of the requirement that appellee’s real interest should be set out in the policy, by the conduct of its agent, W. A. Drennan, Jr., who issued the policy and received the premium, after he was fully informed of all the lease showed cannot be shown by parol, and cannot bind the company. This contention has been thoroughly considered by this court and settled adversely to appellant in Sheffy’s case, 71 Miss. 919 [16 South. 307], in Matthews’ case, 65 Miss. 301 [4 South. 62], in Rivaras’ case, 62 Miss. 727, and in Bowdre’s case, 67 Miss. 631 [7 South. 596, 19 Am. St. Rep. 326]. The very pith of the trae reasoning on this subject is condensed into-this single sentence of the supreme court of Michigan in Insurance Co. v. Earle, 33 Mich. 143, quoted with approval by Judge Campbell in Matthews’ case: ‘There can be no more force in an agreement in writing not to agree by parol than in a parol agreement not to agree in writing. Every such agreement is ended by the new one which contradicts it.’ And this is. true as well of the provisions which relate to the formation and binding force of the contract while running, as to those provisions-relating to what has to be done after a loss. 11 Am. & E. Enc. L. p. 343, note 1, and page 338, par. 4, and authorities in note-2, p. 339. The case of Cleaver v. Insurance Co., 65 Mich. 527 [32 N. W. 660, 8 Am. St. Rep. 908], whilst properly distinguishing the case of Insurance Co. v. Earle, 33 Mich. 143, in no way conflicts with the doctrine which the last-named case-announces, and which we approve. In Cleaver’s case, the stipulation in the policy was that (page 528, 65 Mich., page 660, 32 N. W. [8 Am. St. Rep. 908]) ‘the agent of this company hai? no authority,’ etc. Here the stipulation is that ‘no officer, no agent, and no other representative shall,’ etc. That this distinction was the foundation of Cleaver’s case is clearly shown in — 177 — [71 Mich. 414] 39 N. W. 571 [15 Am. St. Rep. 275], where the judgment was reversed in favor of the assured, on its being shown that R. T. Smith, the secretary, had waived the stipulation otherwise than by indorsement on the policy. “It is vain to say that this clause does not seek to prevent the corporation itself from waiving a stipulation. The corporation acts only through agents; and if 'no agent, no officer, and no other representative’ can waive a stipulation, who is left to waive it for the corporation ? This clause is a species of refinement by which the corporation withdraws within its invisible and intangible ideality, when liability is sought to be imposed upon it, bound by the acts of no agent, officer, or other representative, but reaches forth therefrom with Briarean hands to receive the profits and avail of these same acts performed by these same agents’ as against those with whom these same agents have dealt. The refinement is too subtle for the practical affairs of actual life, and we repudiate it. It may be noted, too, that in Cleaver's case, 65 Mich. 531 [32 N. W. 660, 8 Am. St. Rep. 908], the premium had been received after the agent knew of the ground of forfeiture. The provision relied on here is in the exact words of the stipulation relied on in Lamberton v. Insurance Co. [39 Minn. 129] 39 N. W. 76 [1 L. R. A. 222], decided by supreme court of Minnesota in 1888, respecting which the court says in a very clear and strong opinion: 'That is to say, in other words, that one of the parties to a written contract, which is not required by law to be in writing, cannot, subsequent to the making of the contract, waive by parol agreement provisions which had been incorporated in the contract for his- benefit. If this provision is effectual at all as a limitation of the power of future action, it limits the power of every agent, officer, and representative of the company, and hence, practically,, that of the corporation,’ and it was held that 'this provision, not being a limitation upon the authority of any particular agent or class of agents, but, in effect, upon the capacity of the cor — 178 — poration for future action/ could not be imposed, but was void. Same doctrine is announced in Richards on Insurance, 91, where this provision is said to ‘amount to the contradiction of a rule of law.’ And see Insurance Co. v. Sheffy, 71 Miss. 919 [16 South. 307]. And we think this reasoning sound.” The second contention of the insurance company is that the court below erred in giving the peremptory instruction to find for the plaintiff for the whole sum sued for, less an offset of some $1,100, for premiums due by the railroad company to the insurance company. The Fairchilds claim was for $1,500. This claim had been settled by the railroad company’s attorney at $2,150. Under the terms of this employer’s policy, the insurance company’s- liability for this single claim was limited to $1,500. The railroad company insists on two contentions in this connection: (A) That the insurance company is estopped to- deny its liability for said $1,500 because the settlement was made by T. Brady, acting as its attorney, and therefore the insurance company was estopped to deny the liability. The testimony in the case clearly shows that Brady did not act as attorney for the insurance company in making this settlement, but as attorney alone for the railroad company. The evidence makes it clear that the insurance company limited Brady to $500 on this claim, and he was not able to effect any such settlement, but, on the contrary, settled the claim as the attorney of the railroad company for $2,150. Brady’s action throughout the matter was solely for the railroad company, since it is obvious he could not have settled for the insurance company when it forbade such settlement by him at a sum in excess of $500. Brady was authorized by the railroad company to pay $2,500, if necessary, but succeeded in making a better settlement, $2,150. • This contention on the part of the railroad company is therefore without merit. But the railroad company contends (B) that the liability of — 179 — the insurance company is fixed by the terms of the policy, whatever may have been the limit it fixed in its correspondence with Brady, and that the evidence fully shows, on any fair view of it, an admission of liability on the part of the insurance company for at least $750 on this claim, and that its local agents at Birmingham, Clark & Co., indicated that they might get the home office in Chicago to pay as much as $1,075, half of the $2,150 paid hy the railroad company on this claim. We think the railroad company is clearly correct in both these contentions, to wit, that'the liability of the company is to be determined by the terms of the policy; and, second, that on the testimony in this record it is certainly liable for at least $750 on this claim, provided it is liable for anything. And this brings us to the next contention of the guarantee company, which is that it is liable for nothing on this claim, because no notice was given in accordance with the terms of the policy as to these losses and settlements. We have indicated above that the written consent stipulated for in the policy might be waived by parol as a matter of law; but this still leaves open the question whether in fact it was waived. And whether as a matter of fact the evidence shows the notice was waived was a question to be submitted to the jury. The railroad company, admitting that it had no written consent from the insurance company, endeavored to obviate this by saying that there was a custom between the railroad company and the insurance company of settling these claims and giving the notice therefor without this written consent; that this had been shown by a long course of dealing between the parties. But it must be obvious, upon reflection, that the whole of the evidence offered to establish this custom was a matter, as to its credibility and its weight, for the jury alone, and not for the court. The court, therefore, manifestly erred in giving the peremptory instruction, since this evidence should have been submitted the jury, that they might — 180 — determine, as the triers of fact, whether such custom had been established. We intimate, of course, no opinion whatever as to the value of this testimony. The error of the court consisted in not leaving the solution of this question of fact to those who are authorized to try the facts, to wit, the jury. In regard, therefore, to this Fairchilds item, we conclude that the insurance company was liable under the terms of the policy for the $1,500, provided the jury shall find as a fact that the custom insisted upon by the railroad company existed. As to the Messer item of $500: That claim was for $1,000 in whole, and it was paid by the railroad company. The railroad company had secured another employer’s liability policy in another company, known as the Ocean Company. That company had paid half this loss, $500, and this guarantee company is sued here for only its half, $500, of that loss. The guarantee company defended against this item on the ground, which was the fact, that the injury occasioning this loss occurred after expiration of the contract period of the original policy sued on, and for that reason it insisted that it was not liable. It is idle to waste time on this contention. The correspondence plainly shows that the guarantee company issued a “binder,” as it is called, which binder validly extended the terms of the policy beyond the period of the occurrence of this injury. The construction ingeniously attempted to be placed on this correspondence by the learned counsel for the appellant is far too strained. Clark meant much more by his letters than to keep the original policy in force until the railroad company could effect reinsurance. It may be conceded, and we think it is correctly contended, that the court did err in refusing to permit the defendant to introduce evidence to show that, at the time of the alleged liability of the said defendant on the Messer claim, the plaintiff had taken out a similar policy in a similar company to cover one of the identical claims sued on; but the error was a harmless one, because clause — 181 — H of the policy expressly provided, in case of concurrent insurance, that the defendant should be liable only for its proportion of the loss, and that proportion here was manifestly one-half of the $1,000. So far, therefore, as the Messer claim, is concerned, we think the railroad company was clearly entitled to recover the $500. We remark, generally, that much valuable light is shed upon this character of policy, presented for the first time in this state in this case, and the contentions under that sort of policy presented in this case, by the ease of New Amsterdam Casualty Company v. East Tennessee Telegraph Co., 139 Fed. 602, 71 C. C. A. 586, which may be profitably studied in connection with this case. Of course, the small items in Exhibit A were properly within the peremptory charge. It follows that the judgment of the court below is reversed, and the cause remanded for a new trial. Per Curiam. The above opinion is adopted as the opinion of the court. Reversed and remanded.