Employers' Liability Assur. Corp. v. Chicago & Big Muddy Coal & Coke Co.

GROSSCUP, Circuit Judge, after stating the facts, delivered the opinion. We see no way of reviewing the first four assignments of error. The specific facts, to which they relate, were merged in, and are determined by, the general finding of the court. It is difficult, too, to see how, under the fifth and sixth assignments of error, there being no motion for a new trial or in arrest of judgment, there can be any case made here. But objection on that score being waived, we are willing, without approving the correctness of the practice involved, to pass upon the point of merit raised. The point made is this: The policy of assurance indemnifies against loss from common law or statutory liability for damages on account of [964] bodily injuries fatal or non-fatal; but exempts therefrom injuries occasioned by reason of the failure of the assured to observe any statute affecting the safety of persons, or any local ordinance, of which it has knowledge. But the policy provides, also, that upon the occurrence of an accident, immediate written notice, with the fullest information obtainable, shall be given 'to the assurer; and that upon any such suit being brought for damages on account of the accident, the assured shall not settle any claim except at his own costs; nor incur any expense; nor interfere in any negotiation for settlement, or in any legal proceeding, without the consent of the assured previously given in writing—the assurer undertaking, at its own cost, to defend or settle actions in the name of the assured, unless the assurer shall elect to pay the assured the indemnity. What construction would be put upon the general contract of assurance, as modified by the exemption indicated, and how that might affect defendant in error’s right to indemnity on the facts stated, had plairltiff in error elected not to take the Coats case out of defendant in error’s control, we need not here determine; for the act of the plaintiff in error, in taking control and dominion of the action for damages, and keeping such control and dominion until judgment was entered, without notice to the defendant in error that it did not consider itself liable under the policy—thereby taking from the defendant in error the control and dominion of the action—is such a construction of the policy, by contemporaneous acts, as estops plaintiff in error from denying liability, now that that action is at an end. To take any other view of this case, would be to hold that the assurer could effectually tie the hands of the assured, in an action that might, or might not, on a close construction of the policy, be covered by the terms of the policy, and then, the cause being determined against it, insist that upon a closer reading of the policy, the assured ought to have been left to make its own defense, and at its own risk. This cannot be the law. The judgment below will be affirmed.