15 Ohio App. 457 | Ohio Ct. App. | 1921
The question as to the jurisdiction of the courts of Ohio to administer the fund deposited with the superintendent of insurance, and of the rights of Ohio policy-holders therein, as distinguished from the policy-holders of foreign states, was decided by this court in State, ex rel. Turner, Atty. Genl., v. Union Casualty Ins. Co. of Philadelphia, 8 Ohio App., 285. This case was referred to Hon. Francis H. Game, as special master commissioner, to hear and determine the issues as to the distribution of the fund and to make report.
Upon the filing of the report certain exceptions thereto were presented.
The question now arises upon confirmation of the report. There are many important questions presented, each of which amounts to a separate case. The master, in his report, states the facts upon which the respective claims rest, and his conclusions of law.
The Geaner Contracting Company, The Toupet, Beil & Conley, Inc., and The U. S. Gypsum Company Claims.
These claimants were non-residents of Ohio and the contracts of insurance Avere made outside of Ohio. The claimants, however, were carrying on business in Ohio and were subject to the provisions of the Ohio workmen’s compensation law. In the course of their business in Ohio they incurred liabilities under the Ohio workmen’s compensation law, part of which Avas discharged by the Casualty Company. The remainder has either been paid by the respective claimants or a liability for the unpaid portions still exists. It is urged that 'the liability of the claimants under the Ohio workmen’s compensation act amounts to the transaction of business by The Casualty Company in Ohio, which fact would hold the Casualty Company to the Ohio law and give its policy-holders the benefit of the Ohio deposit. Counsel for the claimants rely upon the decision of this court in the case of Hogan, Atty. Gen., v. Empire State Ins. Co., 8 Ohio App., 172. The Empire State Insurance Company case wa:s controlled by the act of congress which gave the subcontractors the benefit of the policy. Such subcontractors were constructive policy-holders, and being citizens of Ohio, and their claims having originated from business in Ohio, it was held that such constructive policy-holders were entitled to the benefit of the deposit. We find no
The McDonald and Leahy Claim.
William Kramer, a citizen of Ohio, was the assured in a policy issued by the Casualty Company in Ohio, insuring him against employer’s liability. McDonald was an employe of Kramer, and, within the life of the policy, was injured in the course of his employment.
January 6, 1912, McDonald, by his next friend, brought suit against Kramer in the court of common pleas of Cuyahoga county to recover damages for such injuries.
January 24, 1913, the action was dismissed without prejudice by the plaintiff.
February 14, 1913, for a consideration of $1,600 paid to Kramer by the Casualty Company, Kramer assigned and surrendered his interest in the policy of insurance to the Casualty Company.
February 20, 1913, McDonald commenced another action against Kramer in the court of common pleas of Cuyahoga county to recover damages for the injuries aforesaid.
August 13, 1915, McDonald recovered a judgment in the action against Kramer in the sum of $5,000 and costs. Execution was issued on that judgment on December 23, 1915, and was returned unsatisfied
October 19,1916, McDonald and Leahy commenced an action against William Kramer and the Casualty Company in the common pleas court of Cuyahoga county, seeking to be subrogated to the rights of William Kramer in the said policy of insurance and to recover of the Casualty Company the amount of the judgment theretofore obtained by McDonald against Kramer. The Casualty Company filed its answer, setting forth among other defenses:
1. That the policy of insurance had been surrendered by the assured and canceled, and
2. That the policy contained a provision that no action could be maintained against the Casualty Company unless commenced within 90 days from the date of the final judgment against the assured. That action is still pending.
McDonald and Leahy have filed a cross-petition and an amendment thereto in this court, seeking to establish an equity in the fund in the hands of the insurance commissioner. The superintendent of insurance of the state of Ohio and the New York liquidator of the Casualty Company filed an answer setting up, among other defenses, the alleged cancellation of the policy and the condition of the policy requiring actions to be brought within 90 days after final judgment on the claim against the assured. The questions presented are:
First, a:s to the jurisdiction of this court to hear and determine the controversy;
Second, as to the alleged cancellation of the policy,
Third, as to the failure of the claimant to bring suit within 90 days after judgment against the assured.
The important and difficult question arises in connection with Section 9510-1, General Code, over the clause in the policy limiting the time of bringing an action against the company to 90 days after the final judgment against the assured. The condition in the policy is as follows:
“No action shall lie against the company to recover for any loss as described in this policy, unless brought within ninety days from the date of entry of the final judgment against the assured, after a trial of the issues on the merits, in a suit duly instituted within the period limited by the statute of limitations, awarding damages on account of a casualty covered thereby, and then only provided that such action against the company, be brought by the assured personally, for damages sustained by the assured in paying and satisfying such final judgment. This clause shall not in any way. limit, restrain or abridge the company’s defense to any such action.”
The. statute referred to is as follows :
“See. 9510-1. An employee, who has heretofore recovered or shall hereafter recover against his em
Section 9510-1 was under consideration in the case of Verducci v. Casualty Co. of America, 96 Ohio St., 260, and it was held that provisions in the policy tending to defeat the right of subrogation are invalid. The subrogation statute was one of many affording relief to workmen injured in industrial employment. Contracts of insurance are required to conform to the public policy of the. statute, and where a provision in the insurance policy conflicts with the statute the provision in the policy must yield. Again, an insurance policy will, if possible, be construed so as to be in harmony with the statute. It'is well settled in Ohio' that conditions for the benefit of the insurance company will be strictly construed. Mumaw v. Western & Southern Life Ins. Co., 97 Ohio St., 1; Ensel v. Lumber Ins. Co. of N. Y., 88 Ohio St., 269; and Employers’ Liability Ins. Corp. v. Roehm, 99 Ohio St., 343.
" The 90-da.y provision was evidently intended to apply' to the assured. It required not only the suit to be brought within 90 days, but also payment of the claim by the assured. It would be impossible of application to a subrogated employe. We think a reasonable construction would be that the condi
It is urged that the subrogation statute invests ■the employe with the right of the policy-holder burdened with the limitation as to the time of bringing the action.
Equitable subrogation, however, does not rest wholly upon the contract, but depends upon the relation of 'the parties growing out of the facts, which give rise to the right of subrogation. A surety or other party entitled thereto may employ the doctrine of subrogation in cases where the party in whom the right originally rested is barred by a release or cancellation or by the statute of limitations. (Smith v. Folsom et al., Receivers, 80 Ohio St., 218, and Neff v. Elder, 84 Ark., 277.) The subrogation statute was designed to employ the equitable doctrine of subrogation as far as applicable. The employe, upon recovering judgment, becomes entitled to enforce his claim 'against the insurance company and is not necessarily deprived of that right by limitations against the policy-holder as to the time of hringing the action. The right of the policy-holder,
Exception to the master’s report upon this claim is sustained and the claim allowed.
The Everhard Manufacturing Company, The Cleveland Welding & Manufacturing Com- ■ pany and The Williamson Company Claims.
The exceptions in these cases involve (the inclusion in the amount allowed to them of attorneys’ fees for defending suits against the assured after the insurer failed to make defense.
The insurance policy includes a covenant to pay the assured “All expenses incurred by the company for investigation, negotiation, settlement or defence.”
This stipulation is broad enough to support the allowance for attorneys’ fees as made by the master.
The Northern Ohio Paving & Construction Company Claim.
This claimant held a policy of insurance issued by the Casualty Company insuring the claimant against loss for accidental injuries to its employes and others. Its answer and cross-petition in this court set up the facts constituting its claim and averred that an action was then pending in 'the court of common pleas of Cuyahoga county against the Casualty Company. A supplemental cross-petition shows, that a petition in the common pleas court of Cuyahoga county was filed by claimant on February 16, 1916,
The cross-petition of the claimant in the case at bar sets out the original cause of action and all facts necessary to show the claimant’s right to participate in the fund.
The judgment against the Casualty Company, in connection with the other facts found by the special master commissioner, was sufficient to sustain the claim represented by the judgment including the allowance made for attorneys’ fees. The report of the master upon this claim is therefore sustained.
The Frank M. Wise Claim.
Wise, a citizen of Ohio, contracted with The Pennsylvania Railway Company for certain construction work at West Jefferson, Ohio. He took an employers’ liability policy from the Casualty Company.
The Casualty Company was duly notified by Wise of the pendency of the suits brought by the administrator of Jester and by Groomes against the railway company and himself. The Casualty Company was also duly notified by Wise of the suit brought by the railway company against him ¡and the Casualty Company. Upon motion of the Casualty Company the service upon it was quashed. An amended petition was thereupon filed by the railway company against Wise, upon which default judgment was rendered against Wise. The master finds that Wise relied upon the promise and representation of the Casualty Company that it would defend the action of the railway company against him and had no notice or knowledge that the Casualty Company had not assumed the defense of the action until after the rendition of the judgment. Wise thereupon paid
The policy specified the particular work in which the assured engaged, under its contract with the railway company. The amended petition of the railway company against Wise contains 'the following averments:
“And the plaintiff avers that the falling and giving away of the trestle and the resulting injury of one Albert Groomes, a miner, and the injury and death of one Edward Jester, hereinafter mentioned, was directly caused by the failure of said defendant, Wise, to exercise due care for his safety and protection, as aforesaid, and discharge his primary duty in that respect, and as provided by the terms of said contract.
“Plaintiff further avers the falling, collapse and giving away of said trestle was the direct and sole cause of the death of said Edward Jester, and the serious and permanent injury of the said Albert
It is claimed:
(1) That the policy was only intended to indemnify Wise against claims by injured employe®, directly against him.
(2) That 'the proper judgment of Jester’s administrator and the settled claims of Groomes were upon a liability of the railway company and that the judgment of the railway company against Wise rests apon a contract liability rather than an employer’s liability.
In respect to the first claim we are of opinion that under'the language of the indemnity contract, properly construed, the liability of the Casualty Company is not limited to a direct claim of the railway company, if founded upon the primary negligence of Wise as an employer.
As to the second contention, the amended petition of the railway company against Wise charges that the death of Jester and the injury to Groomes were’ due solely to the negligence of Wise. The fact, that, under the contract between the railway company
The Ford, Snyder, Tilden, Kennedy, .Manchester and Conroy Claims.
These are claims for legal -services rendered on behalf of the Casualty Company in defense of claims made agains-t policy-holders. The claims of Ford, Snyder & Tilden against the Ohio deposit were disallowed, and, we think, properly. The attorneys were employed by the Casualty Company in pursuance to its contract obligation to defend its policyholders. The attorneys are general creditors of the Casualty Company, but are not entitled to the status of a policy-holder under the Ohio statute. This court so decided upon a similar claim made in the Empire Surety Company case, supra.
The James DeVault Claim.
James DeVault was engaged in the construction of United States government buildings. He gave construction bonds to the United States government for the construction of government buildings at
The construction contracts were executed and delivered in Washington, D. C. There is some controversy .as to whether the Huntington contract was. executed by DeVault in Ohio, but we have accepted the additional testimony offered by DeVault on that subject. '
Upon insolvency of the Union Casualty Company the United States government required DeVault to furnish an additional surety, which was done, at a cost to DeVault of $775 on the Huntington contract and $200 on the Monongahela contract. He makes claim for $975.
The controlling question in this case is whether the liability of the Union Casualty Company to DeVault was ais policy-holder. We cannot escape the conclusion that DeVault was merely a general creditor and that he was in no sense a policy-holder.
DeVault’s claim is similar in principle to a claim for unearned premiums, consequently the decision in the case of McCallum v. National Credit Ins. Co., 84 Minn., 134, 86 N. W. Rep., 892, is in point.
DeVault’s claim is, therefore, disallowed.
The Claim op the State op Ohio por Taxes.
The state of Ohio claims $2,468.14 for taxes under Section 5433, General Code, for the year 1916. The state asks that its claim “be allowed herein and
The state having accepted this deposit as trustee of an express trust in favor of Ohio policy-holders its claim for taxes would be subordinate thereto.
We are, however, of opinion that asi to any surplus due the Casualty Company, or to the liquidator, the state of Ohio would have a right to assert its claim for taxes as a set-off.
Decree accordingly.