179 Mo. App. 123 | Mo. Ct. App. | 1913
(after stating the facts).— While all three of the cases were briefed and argued together before us, the case now to be considered relates to the appeal of the Frankfort Marine Accident & Plate G-lass Insurance Company, but in consideration of that we are compelled, in a measure, to consider the position of the Travelers Insurance Company also, more incidentally, however, than directly.
Taking up this Frankfort case, counsel for that company, the appellant here, make two assignments of error. First, that the court erred in giving the peremptory instruction for a verdict in favor of plaintiff and against defendant Frankfort Insurance Company, in the sum of $6753.40, with interest from January 25, 1910; second, that the court erred in refusing to give the instruction asked by the Frankfort Company at the close of all the evidence.
These two assignments of error present two theories in antithesis: if the one is right, the other is wrong. The consideration of the action of the court in refusing one instruction necessarily involves that of its action in giving the other.
In support of their assignments, learned counsel for appellant, in brief, contend that the court erred in giving the instruction directing a verdict for the respondent against the Frankfort Insurance Company, because the policy of that company, it is claimed, was “a contract of indemnity against loss,” and it was not liable to the Realty Company in any amount until the Realty Company sustained a loss, that when that loss was sustained the limit of the liability of the Frankfort Company was $5000, the amount specifically mentioned as the limit in the policy. As necessarily following from this, it is argued, that the special agreement under which the Frankfort Company agreed to
Counsel for appellant cite Conqueror Zinc & Lead Co. v. Aetna Life Ins. Co., 152 Mo. App. 332, 133 S. W. 156, in support of their contention. The decision in that case is against counsel in so far as concerns the-matter of court costs, for there it is distinctly held that the insurer is responsible to the assured, in addition to the maximum amount of indemnity provided for in the policy, for the court costs incurred and paid. It is true that it is further there held that the insurer was not liable for interest that had accrued on the judgment. That part of this decision is not determinative here. The policy involved in the Conqueror Zinc & Lead Company case is identical in its provisions, so far as this point is concerned, with that issued by the Travelers Insurance Company, but differs in its language from that of the Frankfort, and the conclusion that the Aetna Life Insurance Company was not liable for more than the assured had in fact paid only up to $5000, is reached on the ground that its policy distinctly provided: “No action shall lie against the company as respects any loss under this policy, unless it shall be brought by the assured himself to reimburse him for loss actually sustained and paid by him in satisfaction of a judgment within sixty days from the date of such judgment and after trial of the issue.” On this provision it was held the Aetna Company was not liable for interest, and that plaintiff there could only recover what it had paid out up to $5000'. Hence the Conqueror Zinc & Lead Company case lends no aid to the contention of the appellant here, unless we are to
Counsel for the Frankfort also rely upon Maryland Casualty Co. v. Omaha Electric Light & Power Co., 157 Fed. Rep. 514; Finley v. United States Casualty Co., 113 Tenn. 592; Davison v. Maryland Casualty Co., 197 Mass. 167; Puget Sound Improvement Co. v. Frankfort Marine Accident & Plate Glass Ins. Co., 52 Wash. 124; Frye v. Bath Gas & Electric Co.,97 Me., 241; and Henderson v. Maryland Casualty Co., 29 Penn. Sup. 398, in support of the proposition that the Frankfort was liable only for the amount paid, after payment by the assured. The policies in each of these cases expressly provided, as did that in the Conqueror Zinc Company case, and as does that of the Travelers Insurance Company, that no action should lie against the company except to reimburse the assured “for loss actually sustained and paid by him in satisfaction of a judgment, after trial of the issue;” if not in these words, in words of like tenor. These are all the cases cited by counsel for the Frankfort in support of their first proposition.
In support of their proposition that “court costs” are not to be included when they exceed the $5000 maximum, counsel for the Frankfort cite Munro v. Maryland Casualty Co., 96 N. Y. Supp. 705, and National & Providence Worsted Mills v. Frankfort Marine Accident & Plate Glass Ins. Co., 28 R. I. 126. The learned judge in the Munro case, supra, reaches his conclusion mainly on the authority of Connolly v. Bolster, 187 Mass. 266. But that case was on a policy similar in respect to those in the case» above cited and is not in point here. Moreover, so far as he holds the insurer not liable for costs, his decision runs counter to the majority of the above cases cited by counsel themselves on the first proposition, and as to nonliability for costs, is disaffirmed by the Supreme Court of New York, Appell
Counsel for the Frankfort Company cite Finley v. Casualty Co., supra. That case, as well as Frye v. Bath Gas & Electric Co., supra, was one in which the party injured attempted, by suit in equity, to hold the insurer liable for injuries sustained, on the ground either that the assured was bankrupt or had made a fraudulent settlement, so that plaintiffs, as employees covered by the policies, claimed a right, in equity, to subrogation to the rights of the assured, and sought to hold the insurer. The claim was denied. The policy was on like conditions as those of the Travelers in the case before us, requiring, as a prerequisite to a right of recovery, payment by the assured. After pointing out the difference between the effect of a policy which insures directly against liability and one that insures against loss or damage by reason of liability, it is said, in the Finley case, (l.c.598): “Under the policies of the second kind, to which the one before us belongs, the amount of the insurance does not become available until the assured has paid the loss, and is not even then available unless proper notice has been given as provided in the policy.”
We do not think that these cases, and they are the only cases cited by learned counsel for the Frankfort Company, meet or cover the conditions of the policy of that company which is before us. The first and principal contracting clause is, that the Frankfort Company “does hereby agree to indemnify..........
It would seem on careful reading of the 3rd and 4th warranty clauses, that the words “cost” and “costs” are used in a different sense in those clauses and that payment is not confined to mere taxable court costs, as that term is technically used. Thus in the 'third clause it is provided that, “if the company shall offer to pay to 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
In the fourth clause it is provided that the company may undertake “at its own cost” the settlement of any claim, and the assured shall not ££ except at its own cost, settle any elaimi nor incur any expense without the consent of the company.” Here again the terms £ ‘ cost ” and £ £ expense ’ ’ are used as inclusive. But grant that the meaning’ of the words “cost” and “costs” is ambiguous, as used, then, as before remarked, we are to apply the well-settled rule that the terms and conditions employed in a policy of insurance are to be construed, if ambiguous or of doubtful meaning, most strongly against the insurer. [Grocery Co. v. Fidelity & Guaranty Co., 130 Mo. App. 421, 110 S. W. 29; Rochester Mining Co. v. Maryland Casualty Co., 143 Mo. App. 555, 128 S. W. 204; Beile v. Travelers Protective Ass’n. 155 Mo. App. 629, 135 S. W. 497.] Construing the words “cost” and “costs,” in the connection used, they have a much broader meaning than mere taxable court costs.
Construing this contract in its most favorable light in favor of the assured, and having in mind the dual meaning of the word costs, and mindful of the use of the word “expenses” and the contracts as to their payment, we come to a consideration of the question as to the liability of the Frankfort Company for payment, not only of the court costs but of interest accruing between the date of the judgment, as originally entered and the payment thereof, payment having been suspended pending the determination of the case by the Supreme Court.
It is provided by section 7181, Revised Statutes 1909, that interest shall be allowed on all moneys due
So it is here. The Frankfort Company undertook at its own cost and expense, unwilling to pay for any injury to one who fell within the protection of the contract, to litigate the cause, conduct the defense, and pay the costs of the litigation. That means the expense. That more than mere court costs is meant, is clear by the construction put upon it by the insurer itself, for as we have seen, it paid attorney’s fees, printing, traveling and all other expenses connected with the defense of the case both in the circuit court and before the Supreme Court.
As we have before noted, it is said in Munro v. Maryland Casualty Co., (l. c. 706), that the authorities are conflicting as to the liability for interest when the interest added to the principal exceeds the maximum sum tendered, and that the divergent views are well stated in two cases, namely, Sanders v. Frankfort Marine, Accident & Plate Glass Ins. Co., 72 N. H. 485, and Connolly v. Bolster, 187 Mass. 266, and that in each case the policy involved was similar to that under consideration in the Munro case. As we have also noted, the policy in the latter corresponded to the policy in the Travelers case and contained the provision that no action should lie for any loss under the policy unless brought by the insured to reimburse him for loss actually sustained and paid by him in satisfaction of the judgment after trial of the issue, it being held that payment of the judgment was a condition precedent to liability on a policy, and the question of interest was not involved. The policy in Sanders v. Frankfort, etc., Ins. Co., was issued by the same company, appellant here, and is in the same form, with this very important
Curiously, also' the 7th clause in this same Frankfort Company’s policy which was before the Supreme Court of Washington, in Puget Sound Improvement Co. v. Frankfort, etc., Ins. Co., supra, corresponds to this eighth clause in its policy, which was involved in the Sanders ease. No like clause or provision is in the Frankfort policy now before us or has been called to our attention, and we find none in the abstract of the record, which purports to set out the policies in full. Even with this eighth clause in the policy, however, it is held by the Supreme Court of New Hampshire that the insurer, if he elects to defend an action brought against the assured, is bound to protect the insured against liability at all stages of the litigation to the extent of the agreed indemnity, and he is not absolved from this obligation by the fact that, the insured has not paid the amount of the judgment against him or is unable to do so by reason of insolvency, and it construes this 8th clause as applying solely to cases where the insurer denies liability for injuries which were made the subject of suit and refuses to defend.
In Rumford Falls Paper Co. v. Fidelity & Casualty Co., 92 Me. 574, the policy was limited to the payment of $1500 for the death of any one person. There it is held that the plaintiff, the assured, was entitled to recover in an action against the insurer the amount of the insurance specified in the policy, that is $1500, with interest thereon from the time when the verdict was rendered in the former action and the costs recovered in that action with interest thereon from the time when they were paid.
Possibly the most recent and certainly one of the most carefully considered opinions is that of Aetna Life Ins. Co. v. Bowling Green Gas Light Co., 150 Ky. 732. In that case it was held by the Court of Appeals of Kentucky, that where the contract of insurance stipulated that the insurer would pay a fixed sum of $5000 as indemnity to the assured, and in addition thereto would pay ‘ ‘ the expense of litigation, ’ ’ if litigation was engaged in by its direction, the words “expense of litigation,” include the costs of the suit incurred by the assured, the damages awarded the claimant on an appeal by the assured, and the interest that accrued on the judgment against the assured, the argument of the court being that as the insurance company has the right to compel the assured, against his will, to engage in litigation or else forfeit the right to any part of the indemnity he had contracted for, when it elects to burden the assured for the cost and expense of an action, the provisions of the policy should be liberally construed for his benefit.
In Saratoga Trap Rock Co. v. Standard Accident Insurance Co., 128 N. Y. Supp. 822, discussing the contract of insurance involved, it is said (l. c. 825): “The contract embraced in the policy which the defendant issued to the plaintiff is one of indemnity merely. It is not an agreement to save harmless or to pay when liability shall be established. If the first part of the agreement was not qualified by a subsequent clause, and if the only provision contained in the policy was that the insuring company would indemnify the assured against loss by reason of liability because of an accident happening to its servant, obligation to pay
In Brewster v. Empire State Surety Co., supra, following Saratoga Trap Rock Co. v. Standard Accident Ins. Co., supra, which latter rests mainly on Creem v. Fidelity & Casualty Co., 126 N. Y. Supp. 555, it is held that interest over the maximum amount cannot be recovered. But in all these cases, the insurer was only liable “for loss actually sustained and paid by him.”
Our conclusion upon the consideration of all the cases, is that the better authority leads to the result that, under this form of policy issued by the Frankfort Company, the right of action of the assured did not depend upon judgment first being rendered against it and payment made by it thereof, but that its right to the indemnity accrued when the accident occurred for which it was liable; that the assured having turned over the defense of the action to the insurer and the
In so holding we are not to be understood as holding that if the Frankfort policy before us contained the provision contained in the Travelers policy, there would be no liability for interest on the amount of a judgment rendered, accruing after judgment and before payment, that interest bringing the amount to be paid above the maximum. That question is not here before us and is not decided.
The judgment of the circuit court in this case is affirmed.