186 A.D. 630 | N.Y. App. Div. | 1919
The plaintiff is a domestic corporation engaged in the coal and trucking business. The defendant is a foreign corporation organized under the laws of the State of Massachusetts, and is engaged in the liability insurance business.
On or about April 1, 1913, upon due consideration, the defendant issued a policy of insurance whereby it agreed to indemnify the plaintiff against loss from the liability imposed by law by reason of bodily injuries accidentally suffered by any person by means of horses or draft animals or vehicles belonging to the plaintiff. In carrying on its business the plaintiff employed several teams of horses and men to drive the same. On February 21, 1914, within the life of said policy, one Andrew Kelly, an employee of the plaintiff, suffered injuries, including a broken leg, as the result, as he claimed, from a kick of one of plaintiff’s truck horses. On the same date the plaintiff corporation, the assured under said policy, by letter addressed to Mr. D. A. W. Waigt, manager of the insurance department of Slawson & Hobbs, the brokers who had obtained said policy from the defendant company, gave notice that their said driver had been that morning injured while driving a coal cart and had received a broken leg, and asked the brokers to report such injury to the defendant company. Shortly thereafter the said brokers by letter reported such accident to the defendant company and asked the defendant to give the matter prompt attention. The day following said notification from the insurance brokers the defendant insurance company acknowledged receipt thereof and stated in writing that the case seemed to warrant personal
By such letter of April 9, 1914, the defendant bonding company advised the plaintiff of its position in the matter; that inasmuch as the injury to plaintiff’s employee was from the kick of a vicious horse and known to be vicious, they would disclaim all liability under their policy. Immediately upon receipt of such letter the president of the assured, in company with Mr. Waigt of the insurance brokers’ concern, on April 10, 1914, called at the office of the defendant company at Maiden Lane and William street, New York city, and there had a conversation with Mr. Dilg, the manager of the defendant’s casualty department, and who had written the several letters addressed to the brokers and to the plaintiff. In the conversation which then took place the plaintiff’s president expressed to Dilg great surprise at the position which the company was taking, and stated that the horse was never vicious, and that the company had never had any report of the horse being vicious, and that they could prove the contrary, and that the plaintiff would expect the insurance company to live up to its policy and take care of the suit and pay any damages that might accrue as the result thereof. To this the manager of defendant’s casualty department, after consulting their papers, stated that they would take care of the suit and assume responsibility, if any suit was brought. In the same connection the plaintiff’s president stated to Dilg that it was not a very serious matter, and that the plaintiff’s president was under the impression that he knew how to handle men of this character; that the claim could be settléd probably for a very little money; and that Dilg replied that it would not be necessary for the plaintiff’s president to give himself any further concern; that the company would handle the case in his interest. Following this conversation and on April 13, 1914, Mr. Waigt of the insurance brokers wrote the defendant referring to their letter of April ninth disclaiming liability, that as their Mr. Dilg had informed plaintiff’s president and the writer on the tenth instant that it was the intention of the insurance company to
“ F. J. Falvey, President,
“ Gaston, Snow & Saltonstall, Gen’l Counsel,
“ John T. Burnett, Sec’y and Treas.
“ Massachusetts Bonding and Insurance Company,
“ (Emblem)
“ Fidelity and Surety Bonds,
“ Liability, Automobile, Accident, Health, Plate Glass,
“ Burglary and Theft Insurance.
“ Home Office, Boston Massachusetts.
“ Casualty Claim Department,
' “ H. W. Dilg, Manager,
“ 84 William Street,
“ Telephone 234 John.
“ New York, N. Y., April 14th, 1914. “In Re: Andrew Kelly, N. Y. 9310.
“ Joseph Gordon, Inc.
“ Assured.
“ Slawson & Hobbs,
“ 162 W. 72nd St.,
“ New York City:
“ Gentlemen.— We beg to acknowledge receipt of yours of April 13th, and pursuant to personal conversation had with Mr. Dilg to which you refer in said letter, we would say that we have assumed the liability in this case.
“ Yours, etc.,
“AEH/AMA A. E. HOLMES.”
There is no question but that Holmes was the attorney for the defendant insurance company at that time and had full authority to bind the company. In the subsequent litigation between Kelly and the assured, Holmes, as attorney for the insurance company, acted as attorney for the defendant and conducted the litigation. On some of the letterheads introduced in evidence the name of Holmes appears as attor
“ Pursuant to the terms of our letters to you, we have prepared this case for trial, but will not be responsible for any judgment which may be rendered against you at said trial, if it is proven that you had knowledge of the vicious character of the horse in question, before the accident to Mr. Kelly.”
This letter was also at variance with the company’s prior assumption of liability, and qualified such assumption by stating that they would be responsible only in case it developed that the accident did not occur as the result of a kick from a horse known to be vicious by the assured. The position finally taken by this insurance company was, of course, entirely safe, because there could be no recovery in the action unless it appeared that the assured had knowledge of the vicious propensities of the horse which kicked the employee. Scienter
As the result of the trial of the action which followed, the employee recovered a verdict upon which judgment was entered in the sum of $5,149.40, and which judgment at the date of the trial of this action amounted in the aggregate with interest to the sum of $5,793.07. Upon the rendition of such verdict and the entry of judgment against the plaintiff herein the defendant bonding and insurance company refused to appear further in the action and an appeal was taken by the plaintiff personally from the judgment entered against it, and the judgment was affirmed in this court. (Kelly v. Gordon, Inc., 175 App. Div. 929.) Subsequently the judgment was paid, and this action was brought under the aforesaid policy of insurance to recover of the defendant company the amount of the judgment rendered against the plaintiff in said action, with costs and interest. The defendant answered, disclaiming liability and alleging by way of defense that the injuries were caused by the kick of a vicious horse and known to be such by the plaintiff herein, and that said horse was kept and used by the plaintiff in violation of its warranty annexed to and forming a part of said policy, and that by reason of such breach of warranty the defendant was not liable under said policy. At the close of the evidence, upon motion of the defendant, the trial court granted a nonsuit and dismissed plaintiff’s complaint, the court, in effect, holding that under the terms of the policy there was no liability unless the defendant had waived the provisions with reference to the use of a vicious horse, and that the evidence failed to show that there had been such a waiver.
In such disposition of the case I think the court clearly erred. While the policy contained a provision that there should be no waiver of any of the terms of the policy or conditions or warranties thereof, unless indorsed thereon and signed by the president, a vice-president, secretary or assistant secretary of the company, nevertheless, by the assertion of the company, with full knowledge of the facts that it was claimed on the part of the employee that the injury was the result of the kick of a vicious animal and known to be vicious by the
In Rosenbloom v. Maryland Casualty Co. (supra) the language of Mr. Justice Scott, unanimously concurred in by this Appellate Division, is in point. Justice Scott said: “ The defense mainly relied upon is that the injury for which Goldstein recovered judgment was not a liability insured against by the terms of the policy. Whether it was or not is perhaps open to question, but that question we are not called upon to consider. • As has already been said the complaint in the Goldstein case disclosed precisely the nature of his claim and the ground upon which he sought to hold the owners liable, so that when the defendant assumed the defense of the action it had every means of ascertaining whether or not the loss- was one for which it was hable under its policy. It is perfectly well settled that under such circumstances, an insurer who has, with full knowledge, undertaken the defense of an action, and deprived the assured of any control of it, will be deemed estopped to deny that the- accident was within the terms of the policy. (Glens Falls Cement Co. v. Travelers’ Ins. Co., 11 App. Div. 411; affd., 162 N. Y. 399; Brassil v. Maryland Casualty Co., 147 App. Div. 815; Royle Mining
I think under the foregoing authorities that by its conduct the defendant bonding and insurance company clearly waived the right to disclaim liability through any breach of warranty with reference to the use of a vicious horse in plaintiff’s business. By undertaking the defense of the action, as well as by its repeated assertion in writing to the plaintiff, it manifested an intention to overlook the possible defense which it might have to an action upon the policy by reason of a breach of such warranty, and having once assumed liability with full knowledge of the facts it could not thereafter disclaim such liability. The defendant, by its acts, estopped itself from thereafter assuming an inconsistent position. In assuming the defense of the action and in precluding the assured from making a reasonable settlement with the injured party, the insurance company deprived this plaintiff of substantial rights. It was of little moment to the defendant whether the defense which it interposed in the action by the employee was successful or not. If successful, of course, it would be relieved from any possible liability; if unsuccessful and the employee was able to recover a verdict, such verdict could be predicated alone upon facts which the insurance company alleged absolved it from liability under the policy. Had this plaintiff been permitted to have interposed its defense, very likely it might have been successful therein. Defendant’s assumption of the burden of the defense deprived the plaintiff of its right to carry on the same, and this being so, the defendant cannot withdraw at this time and disclaim liability under the policy of insurance by virtue of the terms of which it defended the action.
I think the nonsuit was improperly granted, and that
Clarke, P. J., Laughlin, Page and Shearn, JJ., concurred.
Judgment reversed and new trial ordered, with costs to appellant to abide event.