4 F. Supp. 148 | D. Maryland | 1933
This ease was tried at Cumberland at the last May Term of court and resulted in a verdict for the plaintiff for $20,500 in a suit upon two accident insurance policies, being the full amount (without interest) claimed by the plaintiff as payable thereunder for the loss of one eye by accidental means. The defendant duly filed a motion for a new trial and counsel has submitted a comprehensive brief in support of the motion.
The points urged in support of the motion are (1) that the court should have directed a verdict for the defendant on the ground of false answers by the plaintiff in the written applications attached to the policies, and (2) .that if the plaintiff was entitled to recovery at all the amount of recovery should have been limited to $500' or, in the alternative, to $3750. Requested instructions to this effect were duly presented at the trial and were overruled, but the several defences were submitted to the jury for their determination of the facts in accordance with the applicable law as contained in the oral charge.
The most important point in the ease involves the construction and application of a particular clause in the insurance policies which, so far as I am advised, has not heretofore been dealt with in any opinion in this Circuit or in the Court of Appeals of Maryland. It is the clause which provides for a reduction in the amount of insurance in the event that the insured changes his occupation during the life of the policy to one more hazardous, “or while he is doing any act or thing pertaining to any occupation so classified.” It is the contention of the defendant that the uneontradicted evidence in the ease shows that the accident to the plaintiff occurred while he was doing an act pertaining
There was evidence in the case on behalf of the plaintiff tending to show that the occasional polishing of glass by the plaintiff was within the scope of his duties and activities as general manager of the glass manufacturing business; and while the plaintiff did not habitually or customarily personally perform this manual labor, yet, as general manager of the factory and business it was necessary for him to be personally familiar with how the work should be properly done and very occasionally, possibly five or six times a year, he would in an emergency situation in the absence of the regular glass polisher or his substitute or for their better instruction, polish a few glasses himself. There was also evidence that the action of the plaintiff in this particular ease was due to an emergency in) that a certain prospective customer had ordered two sample glasses to be delivered not later than a named time; and that the plaintiff had secured this order on a travelling trip and on his return had given instructions for the manufacture of the samples and had then gone on another trip, and on his return from the latter, found the glasses on his desk but only in the “gray” and not polished state. In order to have the glasses delivered by the specified time, the glass polisher having left the factory for the day, it was necessary for the plaintiff, who was himself familiar with the process, to polish the glasses that evening; and the accident occurred while he was so doing.
The question of law thus presented was whether an accident so occurring from a-n act within the general scope of the duties of a general manager, if so found by the jury, was within the coverage of the policies as written with the amounts therein specified, or whether it fell within the exception mentioned in the policies requiring a reduced amount because the aet, -although within the duties of a general manager as an occasional or sporadic occurrence, was also an aet pertaining to the habitual occupation of a glass polisher or, in the alternative, that of a superintendent of a factory, both risks classified as more hazardous by the defendant’s rate manual. The point being a novel one in this jurisdiction, such examination of available authorities was made as opportunity afforded during the trial. The conclusion then reached was that if the jury found as -a fact that the aet was within the duties of a general manager as specified in the policies, the plaintiff was entitled to recover without reduction in amount. The question of fact was thus left to the jury under appropriate instruction of law to that effect. The jury’s verdict established that the particular aet was within the. scope of the duties of a general manager in this particular ease.
After study of the carefully- prepared brief of counsel for the defendant and a further and more deliberate study of the authorities, I am confirmed in the view of the law announced in the charge to the jury. As the particular point has apparently not heretofore been passed upon in Maryland, or in this Fourth Circuit, a brief reference to the authorities may be helpful.
The authorities dealing with this particular clause of the modem accident insurance policy are annotated in 22 A. L. R. 780, and 26 A. L. R. 123. It will be noted that the policy provides for a reduction in the amount of the insurance in two contingencies, (1) where the occupation has been changed to a
In my opinion the principle applied in the cases referred to in the above underscoring, which I have supplied, is applicable to this ease and properly made it a jury issue on the particular point.
This principle was applied to a somewhat similar factual situation by the Circuit Court of Appeals for the 6th Circuit in Gotfredson v. German Commercial Accident Co., 218 F. 582, 585, L. R. A. 1915D, 312, where the court said: “It is not too much to say that the parties here possessed the common knowledge that is derived from observation and experience respecting the occasional and unexpected necessities which exact of men, whose occupations are not regarded as comprising manual labor, the doing of an act which in a literal sense may be called manual labor. It is hardly conceivable that the policy would ever have been written and received upon any other understanding. * '* * To. construe the fifteenth clause so as to preclude the insured from doing an isolated act, such as the one here involved, would in effect be to prevent an assured from incurring such dangers as are essentially incident to the whole business comprised in his occupation. It might well be conceded that in such circumstances an employee in a particular department, say an insured bookkeeper, could not rightfully have operated the elevator even in an emergency; but it would by no means follow that the managing proprietor could not have done so.” This case is a leading one, at least in the federal courts. Its authority was re-affirmed by the same court in Union Indemnity Co. v. Acord, 48 F.(2d) 1084. It was cited with approval by the Circuit Court of Appeals for the 9th Circuit in Reliance Life Insurance Co. v. Swanson, 11 F.(2d) 709, 710, and again in Schwartz v. Northern Life Insurance Co., 25 F.(2d) 555, 560, and also by the District Court of Texas in Elkins v. Ætna Life Ins. Co., 26 F.(2d) 277, 278.
The same principle is applied by the North Carolina Supreme Court in a well reasoned opinion in Smith v. Massachusetts Bonding & Ins. Co., 179 N. C. 489, 102 S. E. 887, 888, where it was said: “We do not construe the expression ‘or while doing an aet or thing pertaining to any occupation so classed’ as more hazardous, to mean that, if the injury is caused by the doing of an aet within the
The numerous cases cited by defendant’s counsel are distinguishable. Indeed I have not noted any ease, either state or federal, which clearly rejects the principle above discussed. The authorities cited by defendant’s counsel do, I think, support, by the weight of authority, the conclusion that the policy provision is effective in reducing the amount of recovery where the aet in question was entirely outside of the insured’s duties as described in the policy although the particular act pertaining to a more hazardous occupation was merely an isolated or sporadic aet and not incident to a changed occupation. Some authorities have taken a contrary view, as for instance, Holiday v. American Mutual Acci. Ass’n, 103 Iowa, 178, 72 N. W. 448, 64 Am. St. Rep. 170.
So far as I have noted, very few if any of the eases cited by defendant’s counsel deal with a situation such as we have here where the aet causing the injury was within the general duties of the insured’s occupation as described in the policy, although only an occasional one. Ogilvie v. Ætna Life Ins. Co., 189 Cal. 406, 209 P. 26, 29, 26 A. L. R. 116, is the leading authority relied on by the defendant. The distinction between the present case and the Ogilvie case is clear. In the latter the aet causing the injury was not an incident of the insured’s occupation. This appears in the following quotation from the court’s opinion: “The defendant conceded at the trial that the assured had not changed his occupation, but its contention was that the manual labor of plowing is not incident to the occupation of ‘real estate and investments,’ but is an act incident to the occupation of ‘farmer,’ ‘farm laborer,’ and ‘common laborer,’ each of which was classified by it as ‘hazardous.’ ” And eases where the assured is really engaged in two occupations, one covered by the policy and one a more hazardous classification, and where the act causing the injury results from the latter,' are also distinguishable. See annotation in 55 A. L. R. 1057.
In Richards on Insurance (4th Ed.) § 396, in discussing the exceptions of hazardous employment in the aeeident policy, it is said: “Where a person is insured as engaged in a certain specified occupation, he may do whatever customarily appertains to' such an occupation, including acts that may be forbidden by general restrictions of the policy.” See, also, eases reviewed in Couch, Cyclopedia of Insurance Law, vol. 5, § 1139.
It seems unnecessary to discuss the defendant’s requested instructions for a directed verdict based on the contention that the uncontradicted evidence showed that the plaintiff was injured in doing an aet “after having changed his occupation to one classified by the company as more hazardous” than that stated in the policies. This issue was left to the jury for determination on the facts as to whether there had been such a change in occupation. This is the usual and required course where there is substantial evidence in support of the plaintiff’s case, as there was here. Garrison v. United States (C. C. A. 4) 62 F.(2d) 41, 42; Federal Life Ins. Co. v. Bailey (C. C. A. 8) 13 F.(2d) 113, 114.
I think it sufficient to comment briefly only on the defendant’s contention that an absolute verdict should have been directed for the defendant on the ground of false answers in the applications. This was an affirmative defence as to which the defendant had the burden of proof. Ordinarily it is a question for the jury. The defendant therefore had the burden of establishing that the answers were false and insufficient and given in bad faith or, if in good faith, were nevertheless false or insufficient and material. And materiality is itself in insurance law ordinarily a question of fact for the jury. Certainly there was in this case no basis for a directed
Nor should his answers in the applications for the policies of “office and travelling” and “executive duties and travelling” to the question “state fully your duties” be construed as excluding any and all activities other than those physically performed in an office or while travelling. The answer must fairly be considered in relation to the other answers in the application which told the Insurance Company that the business of the applicant was that of a manufacturer of glass and that he was the general manager of the business. While the question was “State the duties of your occupation fully,” it may be noted that the answer was not “office and travelling only” or “executive duties and travelling only.” It is true that literally the question, including the word “fully,” is susceptible of requiring an answer that would describe with great minituae and detail every act no matter how minor and casual, performed by the plaintiff in his occupation. But reference to the original application attached to the policy shows that no such minute detail could have been reasonably intended in view of the limitation of physical space afforded for the answers. Nor should we entirely disregard the well known method of business in writing these accident policies. Indeed the testimony in the ease to some extent indicates the practice. They are written locally by an agent and the amount of detailed information required in the application for an accident policy is generally very greatly less than the much more comprehensive and detailed examination and answers required in the life insurance policy. It is suggested by the defendant that there was ample space provided for the insured to have personally written in, or request the agent to write in, a short phrase to the effeet that the plaintiff was a superintendent of the business in addition to office, executive and travel-ling duties. But there is nothing in this ease to indicate that either the plaintiff or the defendant’s agent made any distinction between the term “general manager” and “superintendent” or that the plaintiff knew that a general manager was classified differently from that of a superintendent in the defendant’s rate manual. Even, therefore, if the term superintendent were properly applicable to the plaintiff’s duties (a conclusion which was not inescapable under the testimony) there is nothing to show that the plaintiff knew this. Furthermore and perhaps more importantly, the defendant was affirmatively advised by the plaintiff’s answers that he was the general manager of a glass manufacturing business, which would reasonably imply that he had incidental duties more extensive than those necessarily physically performed in the office and while travelling. (In the later policy issued by the same company, the plaintiff’s answer to this question was “executive duties and travelling.” Here again the term “executive” is of no certain and definite meaning apart from the nature and customs of the particular business). If the defendant had desired more particular and precise information as to the details of the plaintiff’s duties for his proper classification under its rate manual which was in its possession and not known to him, further and more particular questions could have been submitted before the acceptance of the risk.
The issue here involved was fully submitted to the jury. In my opinion it could not properly have been treated otherwise. It was so held in Business Men’s Assur. Co. of Amer
Other formal reasons contained in the motion for a new trial have not been insisted on in the defendant’s brief. I see no occasion to disturb the verdict of the jury in this case which I think was based on substantial and indeed ample eyidence.