116 N.Y.S. 1042 | N.Y. App. Div. | 1909
Lead Opinion
The plaintiffs, who are copartners in the contracting business under the firm name of Daniel J. Creem & Co., undertook to build the foundations for the pillars of an elevated railroad which the Phoenix Bridge Company was under contract to construct for the Brighton .Beach Railroad Company. This action was brought on a policy of liability insurance by which defendant indemnified them for the term of one year commencing April 1, 1896, against damages recovered for personal injuries sustained by their employees or by the public generally through the negligence of their employees. On the 6th of June, 1896, one Kate Johnston, while passing along a public street, sustained personal injuries alleged to have been caused by an obstruction placed and suffered to remain therein by the bridge company in connection with the work which they had contracted to. do. Sometime thereafter she and her- husband each brought an action in the Supreme Court against the bridge company and others to recover damages resulting from the injury. The action brought by Kate . Johnston was tried on the 6th and Yth of April, 1899, and the complaint dismissed, apparently upon the ground that the plaintiffs in this action were responsible for the .obstruction in the street and they being independent contractors, the bridge company was not liable for their negligence. An appeal was taken from the
At the trial the principal defenses relied upon were: (1) That the action sras not commenced within the time required by the
It ui’ges that the judgment appealed from cannot be sustained for the reason that the action was not commenced within the time provided in the policy. The parties had a right to prescribe a shorter limitation for the commencement of an action under the policy than that provided by statute. Such right is. recognized in section 414 of the Code of Civil Procedure, which provides that the general provisions of chapter 4 shall not apply to “a case where a different limitation ‘is specially prescribed * * * by the written contract of the parties.” (Id. subd. 1.) The policy in question provided. that “Ho action shall lie against the company after the expiration of the period within which an action for damages on account of the given injuries * * * might be brought by such claim- . an£ # * * against the assured, unless at the expiration of said period there is a suit arising out of such accident pending against the assured, in which case an action may be brought in respect to the claim involved in such action against the company by the assured within thirty days after final judgment is rendered in such suit and not later.” Mrs. Johnston was injured on the 6tli of June, 1896, and an action to recover damages therefor, or for loss of her services, had to be brought within three years thereafter. (Code
The final judgments in the actions against the bridge company were entered in January and May, 1902, respectively, and even if these could be deemed actions against the assured within the meaning of the policy, the present action was not brought within thirty days after the final judgments were rendered. It is true this action was brought within thirty days after judgment was entered upon the remittitur from the Court, of Appeals in action Ho. 2 brought by the bridge company against these plaintiffs, but this fact cannot possibly affect the limitation clause in the policy. It was not “ a suit arising out of such accident pending against the assured.” It was an action brought against Creem & Co. by the bridge company to subject the former to a liability growing out of a contract which they had entered into with the latter. It seems to me, therefore, that the defense that the action was not commenced within the time specified in the policy was a bar to the maintenance of the action and defendant’s exception to the refusal to direct a verdict in its favor was well taken.
It is suggested by the respondents that the defendant waived the limitation clause of the policy or at least is estopped from resorting to it to prevent a recovery, but such waiver or estoppel was neither alleged nor proved. In this connection our attention is called to the fact that the defendant had ¡also insured the bridge company and when Kate Johnston commenced an action against it it notified the defendant of that fact and defendant’s attorneys assumed the defense of the action and in turn notified these plaintiffs that they were liable to the bridge company in case of a recovery. The complaint alleges that: “ Thereafter in response to such notice and at the instance and request of the defendant herein and upon its express promise and assurance that every opportunity would be afforded for protecting their interests to the fullest extent, these plaintiffs agreed to and did assist the defendant herein in its defense of said suit and
I do not think the evidence would have justified-the jury in finding either a waiver or estoppel, but it is unnecessary upon this appeal to pass upon that question. The court cannot sustain the judgment by considering testimony stricken out by the court,below which was not passed upon by the jury, and to do so would not only deprive the defendant of an opportunity to controvert it, but also deprive it of an exception to a refusal to strike out.
Other errors are alleged. and since there must be a new trial it may not be out of place to briefly call attention to some of them. In the application for the policy the plaintiffs stated their business to be “ General Contractor, sewer construction.” The defendant was fully informed of- the facts involved in or connected with Mrs. Johnston’s injuries and its attorneys thereafter undertook the defense of the actions brought by the Johnstons against the plaintiffs. This would seem to be a practical construction that the policy covered their liability for the accident. The work which Creem & Co. did was quite similar to sewer construction and it could not be said that there wqs a breach of warranty as matter of law. The court held that phrase was ambiguous and admitted oral ‘ evidence as to its meaning. The plaintiff Creem was allowed to testify as to his conversations with one Whiting, the broker through whom the policy was secured. The premium was based upon the amount of wages paid, and Whiting received the premium from Creem & Co. and delivered the policy. He knew of the work done and examined the payrolls at the end of the year, a small additional premium being then paid.' Ho other person made any examination to ascertain if the premium had been correctly estimated, though that right was reserved to the defendant by the policy. Whiting’s authority was
It was also error to permit a recovery for the expenses incurred by the plaintiffs in successfully defending the action brought by the bridge company on the Kate Johnston judgment. In Cornell v. Travelers’ Insurance Co. (175 N. Y. 239), which was an action brought upon a policy containing a similar provision to the one involved in the present action, it was held that where the company failed to defend, but the assured did successfully defend an action brought against him to recover damages for alleged injuries, lie could not recover his expenses incurred in defending such an action since the policy covered only claims for which he was legally liable' and did not indemnify him against, groundless claims., . The plaintiffs having defended that action successfully, it is, therefore, established that no legal liability for damages rested upon them and they have no claim under the policy against the defendant.
It follows that the judgment and order appealed from should be reversed and a new trial ordered, with costs to appellant to abide event.
Patterson, P. J., Ingraham and Clarke, JJ., concurred.
Concurrence Opinion
I concur in the opinion of Hr. Justice HcLaughlin, with the exception that I think the plaintiffs sufficiently pleaded waiver and estoppel on the part of the defendant with respect to the period of limitation for bringing the action prescribed in the policy. Plaintiffs were not obliged to anticipate this defense by alleging in the complaint facts showing waiver or estoppel. When the defense was pleaded they were at liberty to meet it, with or without a reply, by any proof tending to show that the defendant had
The evidence of waiver and estoppel, however, having been stricken out, is not available to the respondents on this appeal. I merely wish to express my opinion that that evidence was admissible and. available to the plaintiffs without any further amendment of their pleadings.
Judgment and order reversed, new trial ordered, costs to appellant to abide event.