240 F. 573 | 1st Cir. | 1917
Lead Opinion
These are writs of error from a judgment in favor of the Attleboro Manufacturing Company against the Frankfort Marine, Accident & Plate Glass Insurance Company, entered in the District Court for Massachusetts, in an action brought to
The Attleboro Manufacturing'Company is a corporation engaged in the manufacture of jewelry, at Attleboro, Mass., and on the 8th day of July, 1902, procured from the defendant, the Frankfort Marine, Accident & ■ Plate Glass Insurance Company, an employer’s liability policy for the term of one year, from the 11th day of July, 1902, to the 11th day of July, 1903, wherein tire defendant agreed to indemnify the plaintiff—
“against loss arising from legal liability for damages on account of bodily injury or death suffered by any employs or employes of the assured resulting from any and every accident of whatsoever nature or cause happening in, upon, or about the premises of the assured; * * * but the liability of the company in respect to any one employs suffering injury or death, shall in no case exceed the sum of five thousand dollars ($5,000), nor shall the total liability of the company in respect to any one accident resulting in injury to or the death of several employés in any event exceed the sum of ten thousand dollars ($10,000).”
In furtherance of its obligation to indemnify the plaintiff, the defendant agreed:
“That if any legal proceedings are taken to enforce a claim! against the assured, covered by this policy, the company shall, at its own cost, undertake the defense of such legal proceedings in the name and on behalf of the assured, and shall have the entire control of such defense. But if the company shall offer to pay the assured the full amount for which the company is liable in respect to the claim sought to be enforced, it shall not be bound to defend any legal proceedings, nor be liable for any costs or expenses which the insured may incur in defending the same. * * ⅛ The company m'ay undertake at its own cost the settlement of any claim, * * * and the assured shall not, except at his own cost, settle any claim nor incur any expense without the consent of the company thereto previously given in writing.”
During the existence of the policy, and on the 28th of January, 1903, an accident occurred to one Hodde while employed in the plaintiff’s business at Attleboro. As a result of the accident, an action was brought by Hodde against the Attleboro Company March 31, 1903, in the superior court of Massachusetts, and on January 7, 1907, a verdict having been returned for Hodde, judgment was entered in his behalf for the sum of $17,343.81. January 19, 1907, the Attleboro Company paid the judgment. Thereafter, but prior to May 13, 1911, when the present action was brought, the Frankfort Company paid the Attle-boro Company the $5,000, and interest, called for in the policy.
The declaration in the present suit contains three counts. In the first count the plaintiff recites the issuance of the policy and the stipulations therein contained, above set forth. It then alleges the happening of the accident, the assertion of a claim of legal liability, the assumption by the defendant of the defense of the Hodde suit, and the entire and exclusive control thereof; that it was the duty of the defendant—
“in defending said suit to conduct itself with a reasonable degree of care, skill, and diligence commensurate with the duties and responsibility assumed by it, as aforesaid, but that defendant, unmindful of its duty in the premises, so carelessly, negligently, and unskillfully conducted and demeaned itself in the premises that the plaintiff in said suit recovered final judgment against this plain*577 tiff in the sum of §17,343.81, which, judgment this plaintiff has been compelled, on writ of execution issued against plaintiff by said superior court, at the instance of said Hodde, to satisfy and pay in full, principal, interest, and costs; that the aforesaid negligence and misconduct of the defendant consisted in this: That defendant, although given by plaintiff timely and ample notice of said accident, claim and suit, negligently failed to make any timely, proper, or intelligent investigation touching the facts and circumstances under which said bodily injuries were sustained by said William! Hodde, Jr., whereby material evidence favorable to this plaintiff would, could, and should have been produced at the trial of said suit, was not produced or offered thereat on this plaintiff’s behalfj that no intelligent, adequate, or timely preparation was made by the defendant in this suit for the trial of said suit of said William Hodde, Jr.; that competent and legal evidence material to the issues in said suit, and. tending to exculpate this plaintiff of liability therein, and which was known, available, and accessible to defendant herein, and which could and should have been produced on this plaintiff’s behalf on the trial of said suit, was not produced or offered by defendant; that it was charged by said Hodde in said suit that his said injuries had been caused by the negligence of this plaintiff, as it was alleged, in furnishing said Hodde with a defective and unsuitable pitcher for carrying certain acid, which claim that said pitcher was defective and unsuitable was denied by plaintiff, so that the actual condition of said pitcher became and was one of the vital issues on the trial of said suit; that said pitcher, if it had been offered in evidence on the trial of said action, would have tended strongly to rebut and negative said charge of negligence of said Hodde, and would on said trial have seriously impaired the weight and credibility of the evidence offered on his behalf; that this plaintiff, before the trial of said suit, at defendant’s request, delivered into defendant’s custody and care the said pitcher, but the defendant, instead of taking care of the same, carelessly and negligently permitted said pitcher to become lost or destroyed, so that it was not and could not be used or offered in evidence in this plaintiff’s behalf on the trial of said suit. And plaintiff states that it was by reason of the aforesaid negligence, carelessness, and unskillfulness of defendant in and about the premises that said judgment was rendered against this plaintiff and became final as aforesaid.”
In the second count, after reciting the issuance of the policy and the stipulations therein contained, with reference to the payment of the indemnity, the defense of the suit, and settlement thereof, it was alleged that:
“Thereupon, by the terms of said policy, the defendant acquired the right and it became the defendant’s duty either to pay the plaintiff the sum of five thousand dollars (§5,000), the amount of the indemnity provided for in said policy of insurance, or in the alternative, acting in behalf of the plaintiff, to take charge of said claim! against the plaintiff and of negotiations for settlement of said claim by way of compromise, and to take entire control of the defense of the suit brought in behalf of said Hodde to enforce said claim” ; that “the defendant elected the alternative, and thereafter did in fact take charge of said claim and of negotiations for settlement thereof, and undertook the defense of said suit”; that “it entered into various negotiations with said Hodde’s counsel and representatives, caused the appearance of its attorneys to be entered in court as attorneys for this plaintiff, entered upon the preparation of the defense of said suit and had entire and exclusive control of said claim and negotiations for settlement thereof and of the defense of said suit throughout the pendency thereof”; that “it became the duty of the defendant, having undertaken in the plaintiff’s behalf, and for a consideration, the exclusive control and management of said claim and the negotiations for settlement thereof, and the defense of said suit to enforce said claim, to conduct itself in respect to such negotiations for compromise and the management of the defense of said claim and suit with a reasonable degree of care, skill and diligence for the protection of the plaintiff’s interests, and, among other things, it became the defendant’s duty to report to the plaintiff seasonably, in order to permit the*578 plaintiff to act thereon, any offers ior settlement of said claim. But the plaintiff says that the defendant was negligent in the performance of the duties which it assumed, and wholly failed in the diligent performance thereof, in that it entirely failed to conduct said negotiations for settlement by way of compromise with reasonable skill and diligence, failed to report to the plaintiff offers of settlement made by said Hodde’s representatives in compromise of said claim, whereby the plaintiff might have settled said claim by a reasonable compromise at its own cost; and, furthermore, immediately preceding the trial of said suit, although it was advised that the plaintiff was under a legal liability to said Hodde and that the injuries sustained by said Hodde were severe and permanent, carelessly and negligently, and against the .plaintiff’s protest and the advice of its own counsel, declined and refused to cause said suit to be settled and adjusted according to an offer made in behalf of said Hpdde for the sum of four thousand dollars ($4,000), towards which sum this plaintiff, though not bound so to do, offered to contribute voluntarily the sum of one thousand dollars ($1,000).” .
The allegations of negligence in the third count are restatements of those alleged in the first and second counts, namely, negligence in the preparation and trial of the case and in the conduct of the negotiations for settlement.
The defendant filed a general denial, and for a further answer said:
“That if any acts or .omissions of the character described in the plaintiff’s declaration occurred, they occurred more than six years prior to the date of the writ in this cause.”
At the trial the plaintiff was allowed to- go to the jury upon the first count only of the declaration. The court also ruled that the evidence to be received would be limited to alleged negligent acts occurring prior to December, 1904,_ when Mr. Romney Spring, an attorney at law, was employed by the defendant to prepare and defend the case, and to these rulings the plaintiff excepted. May 20, 1914, the jury returned a verdict for the plaintiff in the sum of $4,750, and on October 18, 1916, judgment was entered thereon for $5,437.17 damages, exclusive of costs.
The first count is plainly based upon the idea that the defendant, having entered upon the task of defending the suit, was under a duty imposed by law to exercise due care and skill as respects the plaintiff’s rights, which it could reasonably anticipate would be damaged if it failed to exercise such care, and that, by reason of its failure in this respect, it was responsible to the plaintiff for the damages it suffered.
In the second count it is alleged that the defendant undertook and entered upon the task of settling the suit, whereby it became its duty to exercise reasonable care and diligence to effect a settlement, but that through negligence it failed so to do.
The third count, as before stated, seeks to charge the defendant upon the grounds stated in both the previous counts. If the second and third counts are not so carefully drawn as the first, and if their concluding paragraphs, and perhaps some others, give the impression that the plaintiff’s suit is for a. breach of contract, and not for negligence, it is to be borne in mind that the allegations there made are
The plaintiff does not seek in any of the counts to recover damages for a breach of contract, and the contract is not set out for the purpose of showing that its obligations have been broken by the defendant. The allegations of this character were made for the purpose of showing the relationship existing between the parties, and the rights of the plaintiff in the subject-matter as to which the defendant was dealing and which it was bound to anticipate might be infringed if it failed to use due care in the performance of the duties imposed upon it by law.
“That no action shall be brought by the assured again§t the company upon this policy, in any court, after the expiration of the period, from the date of the accident, within which an action for injuries or damages may he brought against the assured, unless a suit be pending against the assured, at the expiration of that time, in which event an action for indemnity under this policy may be brought against the company within sixty (60) days after the final determination of such action, and not afterwards.”
We are, therefore, unable to sanction the ruling whereby the plaintiff’s evidence was limited to alleged negligent acts occurring prior to Mr. Spring’s employment. ⅜
The defendant also contends that no evidence was presented warranting the submission of the case to the jury. It seems to us, however, after a careful examination of the record, that there was sufficient evidence to warrant its submission to the jury; but, in view of the fact that there must be a new trial, because the court erred in ruling that the defendant was not responsible for negligence in the preparation and trial of the case after it was turned over to its attorney in December, 1904, and, as a result of which, much evidence was excluded which the plaintiff was entitled to have admitted, we do not deem it necessary or profitable to consider this contention further.
“The rule of law1 is, that when an agent is acting within the scope of his authority, his declarations accompanying Ms acts are admissible. * * * They are a part of the res geste, and may qualify the acts.”
Greenleaf, in his book on Evidence (volume 1 [16th Ed.] § 184c), in discussing this question, says:
“The principal constitutes the agent his representative, in the transaction of certain business; whatsoever, therefore, the agent does wMle in the lawful prosecution of that business is the act of the principal whom he represents. And ‘where the acts of the agent will bind the principal there his representations, declarations, and admissions respecting the subject-matter will also bind him if made at the same time, and constituting a part of the res geste.’ They are of the nature of original evidence, and not of hearsay; the representation or statement of the agent in such cases being the ultimate fact to be proved, and not an admission of some other fact. * * ⅞ It is because it is a verbal act, and part of the res gestee, that it is admissible at all; and, therefore, it is not necessary to call the agent himself to. prove it; but, wherever what he did is admissible in evidence, there it is competent to prove what he said about the act while he was doing it.”
See, also, Union Pocket Co. v. Clough, 20 Wall. 528, 540, 22 L. Ed. 406; Vicksburg & Meriden Railroad Co. v. O’Brien, 119 U. S. 99, 103-106, 7 Sup. Ct. 118, 30 L. Ed. 299; Nebonne v. Railroad, 67 N. H. 531, 38 Atl. 17.
Entertaining these views, we think there should be a new trial.
The judgment of the District Court is reversed, the verdict is set aside, and the case is remanded to that court for further proceedings not inconsistent with this opinion; and the plaintiff recovers its costs in this court.
Rehearing
On Petition for Rehearing.
The petition for rehearing must be denied.
1. The defendant’s duty to the plaintiff, as set out in the first and second counts of the declaration, does not depend upon whether it did or did not obligate itself in the policy to prepare and defend the Plodde suit, or to settle the same. As pointed out in our opinion handed down in this case on February 27, 1917, the plaintiff’s right of action in the first count is based upon the ground that defendant entered upon the preparation and defense of the suit, and in the second count that it entered upon the task of settling it, and that in each case it was negligent in what it undertook to do. As each count sounds in tort, and is based upon a duty imposed by law, it is wholly immaterial whether the defendant was or was 'not under a contractual duty to prepare and defend the suit or to settle the same.
Petition denied.