Opinion
No. 33108.
April 4, 1938. Suggestion of error overruled May 16, 1938.
1. INSURANCE.
The provisions of automobile liability policy in respect to notices of loss or injury or suit and the requirements thereunder are to be reasonably construed so as to conserve the real and true purpose of their presence in the contract.
2. INSURANCE.
Only when and not until some claim of liability is presented which under terms of the claim is within the coverage of automobile liability policy need notice of particular claim be given to insurer, under notice provision of policy.
3. INSURANCE.
The purpose of provision of automobile liability policy requiring notice to insurer of accident and of suit for damages is to enable the insurer to make proper investigation and prepare proper defense.
4. INSURANCE.
The provisions of automobile liability policy requiring notice to insurer of accident and of suit for damages are as binding on party claiming under policy as upon the insured.
5. INSURANCE.
Where automobile liability policy excluded liability for bodily injury to any employee of insured and injured party, in statement to insurer at time of its original investigation and in declaration in action against insured, asserted that injured party was an employee of the insured, the injured party could not, during trial, switch his position, so far as insurer was concerned, without notice to insurer thereof and a reasonable opportunity thereafter to investigate and prepare its defense.
6. INSURANCE.
Where automobile liability policy excluded liability for bodily injury to insured's employee, injured party, at time of insurer's original investigation, made statement that he was an employee of insured and insurer then denied liability and injured party in original declaration against insured alleged that injured party was an employee, but during trial amended declaration and alleged that he was not an employee, insurer's denial of liability did not constitute waiver of notice of suit.
7. INSURANCE.
Where automobile liability policy excluded liability for bodily injury to insured's employee, injured party at time of insurer's original investigation made statement that he was an employee of insured, and during trial of his action against insured for first time switched his position and asserted that he was not an employee, without notifying insurer thereof and giving it a reasonable opportunity to investigate and prepare a defense, as required by policy, the injured party could not maintain action against insurer to collect amount of unsatisfied judgment against insured.
APPEAL from the circuit court of Sunflower county. HON. S.F. DAVIS, Judge.
Ben Wilkes, of Greenville, and Cooper Thomas, of Indianola, for appellant.
If the insurance company had come into court on September 23, 1936, and attempted to defend the suit of G.A. Watkins v. J.W. Watkins, without securing a waiver, that act would have made them liable under the policy and would have constituted a waiver of the breach of the conditions. This record shows that neither J.W. Watkins nor G.A. Watkins, nor the attorneys for them, made any offer prior to September 23rd to waive, to allow any reservations if they would defend, and no statement was made to Ben Wilkes that the company would be given any further time to investigate the case, prepare the defense, file the necessary pleas.
When out of the clear sky, with no previous warning, after the circuit court had been in session a week, and in less than thirty-six hours before the case was peremptorily called, the company learned through the gratuitous wire from Wilkes who had not been employed by them, that the suit had been filed, the company would have been liable under the policy had it butted into the case at that time and under those circumstances.
36 C.J. 1109, sec. 98.
It has been held that insurer was not precluded from relying on insured's failure to give notice of accident in time, by investigating the circumstances of the accident and by endeavoring to settle with the injured person, where the rights of insured had not been prejudiced; and where insurer has promptly repudiated liability because of insured's failure to give notice of the accident in time.
36 C.J. 1108, sec. 96.
It is the position of the insurance company that J.W. Watkins breached his policy when he was summoned on May 8th and failed within a reasonable time to give any notice of the pendency of the suit, having given no notice until after a default judgment had been taken against him.
Both the provision for notice of accident and the provision for notice of claim on account of an accident are regarded as material provisions of the policy. The words "accident," "loss," and "claim," as used in provisions of liability insurance policies requiring notice to insurer, have been judicially construed.
36 C.J., page 1100, sec. 78, and sections 79, 80.
It was the duty of G.A. Watkins in this law suit to prove (1) that J.W. Watkins notified the company of the accident and included in said notice that said G.A. Watkins was injured; (2) that J.W. Watkins shall secure information and evidence, the attendance of witnesses and should cooperate with the company in defeating any unjust claim and shall attend all hearing or hearings in connection with the claim; and (3) shall immediately notify the company and forward to it the summons as soon as he knows that he has been sued and shall in addition "keep the company advised respecting further developments in the nature of claims or suits when and as they come to his knowledge." Now, this record shows the plaintiff did not prove his case. He proved none of the foregoing allegations of his declaration in accordance with the policy.
36 C.J. 1103, sec. 86.
Insured must not be guilty of needless or intentional delay in giving notice of the accident; and in the absence of special circumstances justifying it, where notice of an accident, or notice of a claim on account of an accident, is required immediately, any considerable delay is unreasonable.
36 C.J., page 1103, sec. 87, and page 1106, sec. 91; London G. A. Co. v. Siwy, 66 N.E. 481; Traveler's Ins. Co. v. Myers, 49 L.R.A. 760; Downing v. Home Indemnity Co., 152 So. 841; Employers' Liability Assurance Corp. v. Jones County Lbr. Co., 72 So. 152; Aetna Life Ins. Co. v. Walley, 164 So. 16, 174 Miss. 365; Travelers' Indemnity Co. v. Holiman, 164 So. 36, 174 Miss. 220.
We find that it is a definite rule that G.A. Watkins has no higher rights in this policy than does the insured, J.W. Watkins; that it was necessary for him to plead compliance with the policy and the performance of all of the conditions precedent before recovery; that having pleaded the same, he must prove such essential allegations; that in this case G.A. Watkins had the burden of proof of proving that which he alleged in his declaration. He has failed to do so.
We respectfully submit that under the guidance of any of the rules laid down in any of the cases found by us, there was no liability on the insurance company.
Everett Everett and J.M. Forman, of Indianola, and Frank E. Everett, Jr., of Greenwood, for appellee.
The overwhelming weight of authority supports the contention of appellee in this case that appellant is estopped by their denial of liability under the policy from insisting that notice should have been given them.
76 A.L.R. 145; 36 C.J. 1109, sec. 97; Feiss v. U.S.F. G. Co., 112 Neb. 777, 201 S.W. 558, 39 A.L.R. 1008.
Appellant has not been prejudiced. Appellant was repeatedly notified about the accident by J.W. Watkins.
Appellant pursuant to said notices made a complete investigation and had full actual knowledge of the facts and the claims of J.F. Ellis and G.A. Watkins and had been informed by J.W. Watkins that Ellis and G.A. Watkins were "threatening to sue" him for damages. Appellant received notice through Mr. Wilkes, who had been called on the telephone by counsel for appellee, about the suit and were asked whether they desired to defend, all of which was before any action was taken by appellee to proceed to judgment. They declined to defend. When the judgment which had been obtained was set aside and the case reopened, J.W. Watkins notified appellant by letter, but with five months within which to prepare they still declined to take any part in the case. Furthermore, it is pertinent to here observe that appellant on receiving notice made no attempt whatsoever to defend. They did not turn a finger. They did not ask for time. A fair and impartial trial court was sitting. Appellant was more than a mere interested party. By the terms of the policy appellant was the real defendant although the suit was against J.W. Watkins.
The right of the trial court to grant a continuance may be exercised in favor of the real defendant, although not a party to the record, whenever the requirements of justice demand it.
13 C.J. 178, sec. 116.
In the event the trial court had forced them to trial they could have complied with their obligation under the policy to defend and at the same time fully protected themselves.
Travelers Indemnity Co. v. Holiman, 174 Miss. 220.
The rule has been firmly established by our court that the requirement of prompt notice is not of the essence of contract, unless it materially affects the rights of the parties in this particular case. We respectfully urge that appellant has not been materially prejudiced and can claim no immunity because prompt notice was not given.
Employees Liability Assur. Corp. v. Jones County Lbr. Co., 72 So. 152; Fidelity Deposit Co. v. Merchant Marine Bank, 169 Miss. 755, 151 So. 373, 154 So. 260; Aetna Life Ins. Co. v. Walley, 174 Miss. 365.
The record affirmatively shows that J.W. Watkins did more than was necessary in cooperating with appellant. He gave immediate notice of the accident. He wrote the appellant three times before they ever investigated. At the request of Mr. Wilkes, attorney for appellants, he arranged interviews with G.A. Watkins. He told Mr. Wilkes, "All that he knew," about the accident. He voluntarily offered to do "anything he could do to expedite the settlement." Then the appellant denied liability and left Mr. J.W. Watkins high and dry with a law suit on his hands.
Indemnity Ins. Co. v. Forrest, 44 F.2d 465.
Every allegation of the declaration is supported by positive evidence and the case is fully made out.
Suffice it to say that the declaration does not allege that immediate notice in writing was given or that there was compliance with this provision of the policy. Appellee's position is that such notice was unnecessary after appellant denied liability under the policy. What appellee's amended declaration does allege is that "the terms and conditions of the aforesaid policy . . . have been complied with . . . so far as is legally required."
It is true that the original declaration did allege that appellee was an employee of J.W. Watkins, but the proof revealed the facts to be different. Therefore, the pleadings give way to the evidence which was not objected to, and the declaration was duly amended before judgment was taken to strike out this allegation of the declaration. The judgment was based on the verdict of the jury, which verdict was based on the instructions of the court and the evidence offered. No attack is made by the appellant at any place on the validity of the judgment. It is therefore conclusive so far as all matters of pleading and fact are concerned. The statute of jeofails cures all defects in the judgment if any appear.
Sec. 600, Code of 1930.
A variance between the declaration and the evidence, fatal if objected to, is held to be waived if not objected to and cannot be availed of.
I.C.R.R. Co. v. Cathey, 70 Miss. 332, 12 So. 253; Sec. 568, Code of 1930; Ware v. McQuillan, 54 Miss. 203; Greer v. Bush, 57 Miss. 575; Kimbrough v. Ragsdale, 69 Miss. 674, 13 So. 830; I.C.R. v. Prince, 72 Miss. 862, 18 So. 415; Y. M.V.R. Co. v. Schrag, 84 Miss. 125, 36 So. 193; True-Hixon Lbr. Co. v. McDonough, 154 Miss. 720, 122 So. 855.
A variance which does not affect the gist of the action as alleged is immaterial.
49 C.J. 808, sec. 1190.
Argued orally by Forrest G. Cooper, for appellant, and by Frank E. Everett, Jr., for appellee.
On March 25, 1935, one J.W. Watkins, a first cousin of appellee, took an accident insurance policy in appellant company on a certain automobile truck owned by the insured. The policy covered, among other things, "the legal liability imposed upon the assured for damages resulting from an accident by reason of the ownership, maintenance or use of the described automobile on account of bodily injury and for death at any time resulting therefrom sustained by any person or persons." A subsequent provision expressly excepted or excluded from the policy any liability "for bodily injury to any employee of the assured while engaged in the business of the assured (other than domestic employment) or in the operating maintenance or repair of the automobile." The policy carried the usual provisions found in such policies requiring the giving of notice to the company "as soon as reasonably possible thereafter" of any loss or injury, and also that the company shall be immediately notified of any suit against the assured for any such damages or claim of damages as are covered by the policy.
On December 12, 1935, while the policy was in force, the assured sent appellee as the driver of the automobile truck to a neighboring town to move a family. On the way the driver invited one Ellis to accompany him. During the trip the car was overturned and Ellis and the drier, appellee here, were to some extent injured. Soon thereafter the insured notified the company of the accident. On February 14, 1936, the company sent its investigator, who made full settlement with Ellis. On this investigation a written statement was made and delivered by the driver, appellee here, which, when fairly interpreted, was to the effect that, at the time of the accident, appellee was acting as an employee of the insured in the operation of the automobile. Appellee made no suggestion at the time that he was entitled to recover anything of the company.
On February 24, 1936, attorneys for the insured wrote the company asking what they expected to do about the claim of appellee. On February 28, 1936, the attorney for the company wrote appellee that "under the terms of the policy the company does not consider your injuries covered," and four days later the attorney wrote to the insured that he had settled the claim of Ellis in full, and further stated that, much to his surprise, G.A. Watkins, appellee here, had written inquiring about his damage, and that he had been instructed to advise that no liability to G.A. Watkins was recognized. On March 20, 1936, the company wrote to the attorneys of the insured that the Ellis claim had been settled, that G.A. Watkins had no valid claim, and that the file had been closed.
On March 18, 1936, two days before the letter last mentioned was written by the company, appellee, G.A. Watkins, filed his action against J.W. Watkins, the insured, in the circuit court. The declaration expressly averred that at the time of the accident the plaintiff, G.A. Watkins, was an employee of J.W. Watkins, that "said J.W. Watkins had employed the plaintiff G.A. Watkins to operate an automobile truck to move a family," etc. The summons was returned as executed on J.W. Watkins on May 8, 1936. No notice was given by the insured of the suit until October 6, 1936. The company learned of the suit, however, on September 21, 1936. On November 24, 1936, the attorney for the company obtained the court files and saw that the suit was by appellee as an employee of the insured, and the company took no further steps about it, since such claim, as asserted, was not within the policy.
On March 17, 1937, the circuit court being then in session, the case came on for trial, and was that day tried. The insured, J.W. Watkins, the defendant in the action, had wholly made default; he made no defense whatever. During the trial on the writ of inquiry, plaintiff moved to amend his declaration so as to strike out his allegations that he was an employee of the insured at the time of the accident, and to insert instead that at the time he was acting gratuitously for said insured. The amendment was allowed, and on the same day a judgment was entered against the insured in favor of G.A. Watkins for $2,000.
Execution was issued under this judgment, which was returned nulla bona, and thereafter the present suit was filed against the company by G.A. Watkins, appellee here, to recover under the said policy. A peremptory instruction was granted against the company, and it has appealed, its defense to the action being that no notice was given it as required by the terms of the policy. The position taken by appellee is that the company had waived its right to notice by its previous correspondence, wherein it denied any liability to appellee, G.A. Watkins, and had stated further that it had closed its files in respect thereto.
The business of insurance, whether fire, life, health, or accident, has become of great importance in the economic lives of our people. It is vitally requisite that all just claims shall be paid; and, on the other hand, in order to safeguard the solvency of insurers, it is vital that unjust claims shall be rejected. To the latter end, this court and and nearly all other courts in this country have steadily upheld all reasonable provisions in insurance contracts in respect to notice and proof of loss. In Downing v. Indemnity Co., 169 Miss. 13, 20, 152 So. 841, 842, this court said on that subject that the company is "entitled to have notice so that it might make proper investigation and prepare proper defense;" that this "is an important right, and the company had the right to provide for" it in the stipulations of its policy. And the court further held that there must be a compliance with such terms as to giving notice, else there could be no recovery either by the insurer or by any party to whose benefit the policy inures. Other cases in this court are to the same effect and there are none to the contrary.
The provisions of insurance contracts in respect to notices of loss or injury or of suits and the requirements thereunder are to be reasonably construed so as to conserve the real and true purpose of their presence in the contract. It follows, therefore, that it is only when, and not until, some claim of liability is presented which, under the terms of the claim, is within the coverage of the policy, that any notice of the particular claim is necessary. As already shown, when appellee made his statement to the company at the time of the original investigation, his statement, fairly construed, was that he was an employee of the insured at the time of the accident, and when he filed his declaration that status or attitude in respect to the accident was expressly reaffirmed. In that status he was expressly excluded from the coverage of the policy, and, so long as he continued in the assertion of that status, no notice of his claim to the company was necessary. So long as he remained in that status according to his private and public statements, so far as communicated to the company, the latter had no concern with his claim, and any intrusion upon its part would have been as an interloper.
But an entirely different situation was presented when during the trial of the case against the insured, and for the first time, appellee switched his position and attitude and then for the first time asserted that he was not an employee, and for the first time asserted a state of facts which would bring him within the coverage of the policy, whereby for the first time the company had any legal interest in the litigation and when under the terms of the policy was entitled to notice, if the policy was to be subsequently involved.
The reasons and purpose of notice in accident insurance cases are substantially the same as in other insurance cases, and the same rules in material respects apply; and, as we have already indicated, the requirements of notice are as binding upon a beneficiary as upon the insured. As pointed out in Mutual Benefit Life Insurance Co. v. Newton, 89 U.S. 32, 22 Wall. 32, 22 L.Ed. 793, 795, there are many cases which hold that where, in the notice or proofs of loss, statements are made which, in a material or controlling respect, show certain facts, the claimant will not on the trial be allowed to show that the facts were different from those stated. The true rule, we think, applicable in principle to the case here before us, is declared in Travelers' Insurance Co. v. Melick, 8 Cir., 65 F. 178, 187, 27 L.R.A. 629, 634, that "statements of this nature in proofs of loss are binding and conclusive upon the party who makes them until, by pleading or otherwise, he gives the insurance company reasonable notice that he was mistaken in his statement, and that he will endeavor to show that the death was the result of a different cause from that stated in his proofs." See, also, 1 C.J., pp. 477, 478, and cases there cited.
As we have already noted, the statements of appellee, both private and public as communicated to the company and so far as so communicated, were that he was an employee of the insured at the time of the accident. For the first time he took a different position and materially different position so far as the insurance policy was concerned, on the very day of the trial against the insured and, indeed, during the course of the trial itself. So far as the insurance company is concerned, he could not thus switch his position, without notice to the company thereof and a reasonable opportunity, after such notice, to investigate and prepare its defense; and it is admitted that he gave no such notice, nor did anybody else give such notice. Without such notice he is not entitled to recover.
In view of the facts stated, the contention of appellee that the insurance company had waived notice is obviously not tenable. It would seem hardly necessary to say that a party who presents a certain state of material facts to another may not rely upon a waiver by the latter as having any effect in regard to a materially different set of facts later asserted by the party claiming the waiver. See 67 C.J., p. 301.
If the alleged beneficiary, in a situation such as here presented, were allowed to prevail against the insurer, the lawful stipulations in insurance policies for notice and statement of loss or injury could be diverted from their proper purpose and turned into decoys to lead the insurer away from investigation and defense; would permit an alleged beneficiary who had procured the absence of the insurer in reliance upon the represented state of facts to move later and suddenly against it, without warning, upon another and a materially different set of facts, — essentially different so far as any liability of the insurer is concerned. This does not comport with the principles of judicial justice, and is not permissible. The insurance company was entitled to the peremptory charge requested by it. The judgment will be reversed, and judgment for appellant entered here.
Reversed, and judgment here for appellant.