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the insured against liability, and the casualty three actions, except that in those against company is therefore subject to garnishment at the Cotton Mills Company there is an added the suit of the employés when the insured is feature by reason of the fact that at the insolvent. 2. CASE DISTINGUISHED.
time of the injuries it was operating under Carter v. Insurance Co., 76 Kan. 275, 91 | the provisions of the workmen's compensaPac. 178, 11 L. R. A. (N. S.) 1155, distin- tion law, and it is claimed by the casualty guished. 3. INSURANCE 144(1), 665(2)— EMPLOYER's
company that under the policy it is not liable LIABILITY-INDEMNITY POLICY-MODIFICA
on account of injuries within the scope of TION-EVIDENCE,
that act. It also claims that the policies isThe insured employers were not operating sued are contracts of indemnity against loss under the workmen's compensation law when the sustained, and that the obtaining of judgpolicies were issued, and attached to them were riders excepting the insurer from claims for ments against the employers, which had not compensation under that law. Before the end of been paid, was not sufficient to render it the insurance period the insured came under liable as garnishee. The policies in question the compensation law. Held, that it was competent for the parties to detach the rider and were designated as "employers' liability polmodify the contract by an agreement that the icies” and in them the casualty company unearned premium should stand as insurance for agreed "to indemnify the assured, described compensation for injuries for the remainder of in the warranties hereof, within the amounts the insurance year, and also held, that the evidence in the case supports the theory that such as expressed herein, against loss including an agreement was made.
expense arising or resulting from claims Appeal from District Court, Wyandotte upon the assured for damages on account of County.
It bodily injuries," etc., to an employé. Action by Charles E. Blanton, a minor, was stipulated that the assured should give by William H. Blanton, his next friend,
the casualty company immediate notice of against the Kansas City Cotton Mills Com- any accident to an employé and of any suit pany and the Kansas City Casualty Com- resulting therefrom, and it was further stipu
lated that: pany, garnishee, and action by William Lubek against the same defendant and garnishee, tlement made or any expense incurred by the
“The company is not responsible for any setand action by Ernest Myers, a minor, by assured, unless such settlements or expendi. Lydia Myers, his next friend, against Simon tures are first specifically authorized in writing A. Gardner, Kansas City Casualty Company, by the company; except that the assured may garnishee. Judgments for plaintiffs in each provide at the time of the accident, at the
pense of the company, such immediate surgical case against the garnishee, and it appeals. relief as is imperative." Affirmed.
There was also a provision limiting the D. A. Murphy, of Kansas City, Mo., Mc- amounts for which the casualty company Anany & Alden, Thos. M. Van Cleave, and would be liable, and also stating: Samuel Maher, all of Kansas City, Kan., for
"In addition to these limits, the company appellant. T. A. Pollock, T. F. Railsback, terest accruing after entry of judgment on such
will, at its own cost (court costs and all inEmerson & Smith, and K. P. Snyder, all of part thereof as shall not be in excess of the Kansas City, Kan., for appellees.
limits of the company's liability as hereinbe fore expressed, being considered part thereof)
investigate all accidents and defend all suits JOHNSTON, O. J. These are appeals by even if groundless, of which notices are given to the Kansas City Casualty Company from it as hereinbefore required, unless the comjudgments rendered against it in garnish- pany shall elect to settle the claim or suit." ment proceedings.
The provision usually contained in policies Three actions are involved, each brought of this character that no action could be by an employé against his employer to re maintained by reason of a judgment against cover damages for personal injuries, in which the assured unless the latter had sustained judgments against their employers were ob- a loss by satisfying the judgment is not tained. The defendants in those actions found in any of the policies involved here. held policies of insurance issued by the cas- It appeared from the evidence that the casualty company, and in the actions mentioned ualty company had in other instances adit took complete charge of the litigation for justed claims and paid judgments that had the defendants. The plaintiffs were unable not been already satisfied by the assured, to enforce payment of the judgments, and and that it had advertised its business as they garnished the casualty company, which including in its scope the adjustment of all answered in each case, denying liability to claims, payment of all attorney's fees, de the defendant. Plaintiffs contested the an- fense of all suits, the payment of all judgswers, and the evidence upon the issues thus ments up to $5,000, and the payment of court raised was submitted at one hearing to the costs. court without a jury. No findings of fact The main question raised on these appeals were made, and the court rendered judg- is whether or not there can be a liability ments against the casualty company for the against the casualty company for accidental amounts of the claims established.
injuries to the employés of the insured until [1,2] The issues were the same in the the latter pays the claims for the injuries
and losses sustained. The casualty company, arising from them, there is the stipulation contends that under the rule of Carter v. that the insurer shall be given immediate noInsurance Co., 76 Kan. 275, 91 Pac. 178, 11 | tice of an accident and of any suit resulting L. R. A. (N. S.) 1155, its contract was in- from it. The obvious purpose of such a nodemnity against loss, and that no loss was tice is that the insurer may protect itself sustained by the insured until payment had against liability, and that this was the intenbeen made. The contract in the Carter Case tion is made manifest by the action of the differs materially from those involved herein. insurer in settling claims for such liabilities Aside from one stipulation there was the without waiting for the insured to settle or same ambiguity in that contract as in these pay them. In order that the insured may inin regard to whether liability was included telligently carry out this plan it is provided in the term "loss," and whether it was the that the insurer may inspect the plant, intention of the parties that the insurance works, machinery, and appliances used by company should be substituted for the in the insured, and shall also have access to its sured so far as liability for accidental in- books and records, and in that way deterjuries and death · was concerned. While mine the nature of the injury and the extent several of the provisions of that contract of the liability. While the insured is not deindicated a substitution of the insurer for nied the right to make settlements with its the insured, and that it was insurance injured employés it is expressly stipulated against liability, it contained the following that, except for emergency surgical relief at positive stipulation:
the time of the accident, the insurer will not “No action shall lie against the company as be responsible for any settlement made, unrespects any loss under this policy, unless it less written authority therefor is given by shall be brought by the assured himself to reimburse him for loss actually sustained and the insurer. In view of the fact that plainpaid by him in satisfaction of a judgment with tiffs were paying for insurance protection in sixty days from the date of such judgment, and would lose that protection if they settled and after trial of the issue." 76 Kan.
page 276, a claim without the consent of the insurer, 277, 91 Pac. page 178 [11 L. R. A. (N. S.) the clause was almost equivalent to a stip1155).
As we have seen, this clause was wholly ulation forbidding them to negotiate a settleomitted from the contracts in question. In ment with an injured employé. Under the the decision of that case it was said that: contract the insured was permitted to co
“This provision leaves no doubt of the inten- operate with the insurer in negotiating a settion of the parties, which was that the insur- tlement, but it was practically excluded from ance company was not required to pay any, the control of settlements. thing because of the policy until losses had been
To make the control of the insurer more paid by the assured in satisfaction of a judgment." 76 Kan. page 278, 91 Pac, page 178 effective, it was stipulated that it should in(11 L. R. A. (N. S.) 1155).
vestigate all accidents of which it had noIt was there held that the obligation of tice, and its course of action was not only to the contract did not extend beyond the in- investigate such accidents, but it went far. surer and the insured, that it did not inure ther and made settlements for liability aristo the benefit of the injured employés, and ing from the accidents. This control was that the insurer was only bound to reimburse continued after the investigation and the insured for the losses he was compelled throughout any litigation that might arise to pay. The “no action” provision was deem- upon the claims based on accidents, because ed to be so specific and controlling as to in the contract it was stipulated that the inovercome other stipulations in the contract surer should take charge of any litigation pointing to insurance against liability, and that arose, and should at its own cost defend also to prevent an estoppel against the in- all suits brought whether they were groundsurer by reason of having taken control of less or real, unless it should elect to settle the litigation and made the defense for the the claims or suits without contest. These insured. • The provisions of the contracts provisions show that the obligations of the without this clause and the action of the contract rested upon the insurer from the defendant in giving, a practical interpreta- time the accident occurred down until the tion of the provisions of the contract strongly liability resulting from them was settled and tend to show the purpose of the parties to discharged. have been that the insurer should be sub Instead of being exempt from liability unstituted for the insured, and also that it was til prepayment of claims by the insured, the intended as an insurance against liability. insurer practically puts itself into the place Attention is called to the use of the word of the insured so far as settlements with em"indemnify" in the contract, which it is con- ployés and payment of their claims were tended carries the idea of a reimbursement concerned, and if it had been the intention of for losses; but the term has other mean- | the parties that no liability should attach to ings, and is no more controlling than the the insurer until payment had been made by statement at the head of the policies that the insured, it would have been very easy to it is a "liability policy.”
have made that statement in some such way, As against the theory that the insurer is as was done in the Carter Case. There being not concerned as to accidents or liabilities ambiguity in the contract respecting the kind
nf insurance intended, extrinsic circumstanc-, 1096, 48 L. R. A. 770; Pickett v. Fidelity es showing the practical interpretation plac-Company, 60 S. C. 477, 38 s. E. 160, 629; ed upon the contract by the parties may be Davies v. Maryland Casualty Co., 89 Wash. and was received. The casualty company not 571, 154 Pac. 1116, 155 Pac. 1035, L. R. A. only designated its contracts as "liability pol. 1916D, 395, 398; Hoven v. Employers' Lia. icies,” but in an advertisement published in bility Assurance Corporation, 93 Wis. 201, 67 a newspaper in March, 1914, as to the char- N. W. 46, 32 L. R. A. 388. acter of the policies it stated :
 The next contention is that in no event “Every man in business, every employer of can there be a liability for the injuries to labor, needs liability insurance. It safeguards Lubek and Blanton as their employer, the you against possible damages arising from in- Cotton Mills Company, was operating under jury or death to those who work in your shop, factory, or store. The liability insurance is the workmen's compensation law, and comsued by the Kansas City Casualty Company pensation injuries were expressly excepted fully protects you. Note the wide scope: We from the obligations of the contract. No adjust all claims. We pay all attorney's fees. such exception was contained in the policy We defend all suits. We pay all judgments up to $5,000. We pay all court costs.'
when it was produced at the trial, but there In addition to this a former manager of is testimony that a rider was attached to the the casualty company testified in its behalf, policy when it was written which was later and stated that:
detached. The Cotton Mills Company had "Our policy, as I have stated, was an em- not elected to come under the compensation ployer's liability policy, and our policy in law when the policy was issued, but did so in demnified the assured against his legal liability March, 1913. The evidence tended to show for personal injuries."
that the casualty company through its officer These things in connection with the action then agreed to cover compensation cases unof the casualty company in making settle- der the policy without an additional prements without waiting for prepayment by the mium in view of the short time in which the insured show that the casualty company un policy would remain in force, and that the derstood its contracts to bind it for liability rider clause mentioned was torn off the poland not for mere indemnity.
icy. Some testimony was offered to the efThere is a conflict in the authorities on fect that an additional premium was de this branch of the law. Some of them inter- manded, but the Cotton Mills Company de pret contracts containing stipulations simi- clined to pay more insurance, and then, inlar to those included in the policies in ques- stead of returning the unearned premium, tion as indemnity only, and hold that pre- the agreement to cover compensation cases payment of losses is essential to recovery. the remainder of the year for the premium Others treat them as indemnity contracts paid was made. The retention of the unbecause of the inclusion of the “no action" earned premium, instead of its return to the provision. Very many treat them as liability insured, would be sufficient consideration for contracts, where the “no action" provision is the change made in the contract through the omitted. In a few cases courts have gone to detaching of the rider and making the insurthe extent of holding policies containing the ance cover compensation injuries. There is a "no action" provision as contracts to pay lia- sharp dispute in the testimony as to when bilities. The authorities supporting the dif- this agreement was made, or when the rider ferent theories and illustrative of the con- was torn off the policy, but there is evidence flict are grouped in a note in 48 L. R. A. (N. i to support the conclusion that both occurred S.) 184. Some of the cases tending to sup-before the injuries to Lubek and Blanton port the interpretation which we have placed were sustained. As there were no special on the contracts involved here are American findings and the general finding was in favor Employers', etc., Ins. Co. v. Fordyce, 62 Ark. of the plaintiffs, it must be deemed that the 562, 36 S. W. 1051, 54 Am. St. Rep. 305; court accepted the testimony favorable to Stephens v. Pennsylvania Casualty Co., 135 plaintiffs as true, and discredited the conMich. 189, 97 N. W. 686, 3 Ann. Cas. 478; Alicting evidence given in behalf of the casStandard Printing Co. v. Fidelity & Deposit ualty company. Co. (Minn.) 164 N. W. 1022; Patterson v. The judgment is affirmed. All the Justices Adan, 119 Minn. 308, 138 N. W. 281, 48 L. R. concurring. A. (N. S.) 184; Allen v. Ætna Life Ins. Co.,
(103 Kan. 104) 145 Fed. 881, 76 C. C. A. 265, 7 L. R. A. (N. S.) 958; Sanders v. Frankfort Marine Acc. & THOMPSON et al. v. UNION TRACTION Plate Glass Ins. Co., 72 N. H. 485, 57 Atl.
CO. (No. 21522.) 655, 101 Am. St. Rep. 688; Lewinthan v. (Supreme Court of Kansas. May 11, 1918.) Travelers' Ins. Co., 61 Misc. Rep. 621, 113 N. Y. Supp. 1031; Clark v. Bonsal, 157 N. C.
(Syllabus by the Court.) 270, 72 S. E. 954, 48 L. R. A. (N. S.) 191; 1. HIGHWAYS 192—NEGLIGENCE-OIL PIPE. Maryland Casualty Co. v. Peppard (Okl.) 157 the surface of a highway, through which in
A company which maintains an oil pipe on Pac. 106, L. R. A. 1916E, 597; Fenton v. flammable oil is flowing, is liable in damages to Fidelity & Casualty Co., 36 Or. 283, 56 Pac. I one who without negligence on his part breaks the pipe by driving a threshing outfit over it, ed the ditch to ascertain whether the maand sustains injury and loss from the escaping chine could be taken across it. He then oil.
started his engine across the ditch and over 2. HIGHWAYS C153-INJURY – CONTRIBUTORY NEGLIGENCE.
the pipe without putting anything down to In taking their threshing outfit into a field protect it, and the wheel of the engine adjoining the highway in order to thresh a crop, punched a hole in the pipe, and the oil gushthe plaintiffs were entitled to use not only the ing out was ignited from the fire box. Alworn part of the highway but also the whole though one witness said that plaintiff's atwidth of the same so far as it was necessary. 3. HIGHWAYS M213(2, 4)-INJURY QUES- tention was called to the pipe, the latter
TION FOR JURY-NEGLIGENCE CONTRIBU. testified that he did not see or know that
the pipe was there and that no one told him
about it. from the breaking of an exposed oil pipe, a demurrer to plaintiff's evidence was sustained. Plaintiff's insist that there was sufficient and upon an examination of the evidence it is evidence presented to take the case to the held to have been sufficient to take the case jury, and that is the only question presented to the jury as to the negligence of the defendant and also as to the plaintiffs' contributory on this appeal. As against this contention negligence.
it is argued that the evidence failed to show Appeal from District Court, Montgomery
that the defendant owned or was in control County.
of the pipe line. The line was used to convey Action by J. A. Thompson and F. D. oil from the defendant's station to the CofThompson, partners, etc., against the Union feyville brick plant. In his testimony the Traction Company. Judgment for defend- foreman of that plant stated that the pipe ant, and plaintiffs appeal. Reversed and
line "belonged to the Union Traction Comcause remanded for a new trial.
pany, and it was the same line that was
broken when the threshing outfit was burnSullivan Lomax, of Cherryvale, for appel- ed.” Another witness in effect stated that lants. J. J. Jones, of Chanute, and Chester the oil was pumped to the Coffeyville brick Stevens, of Independence, for appellee.
plant; that the pump was located on the
switch of the Union Traction Company; and JOHNSTON, C. J. This was an action to that the oil was taken to the defendant's recover damages for the alleged negligent pump station in tank cars which were operburning of plaintiffs' threshing outfit. There ated by the defendant. Still another withave been two trials of the case, at the first ness testified that after the fire the company of which a demurrer to the evidence was sus put in a joint of pipe where it was broken tained and the plaintiffs were given leave to and buried it. The evidence warrants the amend their petition. At the second trial inference that the defendant owned or at the court again sustained a demurrer to least controlled the pipe line. plaintiffs' evidence and from that decision
(3) There is a contention that the evidence they appeal.
failed to show negligence on the part of the [1, 2] It was alleged in the amended petl. defendant. It is true, as defendant contends, tion that the defendant owns and maintains a 2-inch pipe line upon the surface of and that a pipe line for the transportation and along the south side of a public road for the distribution of oil for fuel and other purpurpose of conveying fuel oil; that plaintiff's poses may lawfully be laid along a public came along the highway with their threshing highway. However, it must be so laid that outfit with the intention of entering a field it will not obstruct or endanger the use of on the south side of the road to do some the highway for public travel. State v. Natthreshing; that the only entrance to the ural Gas Co., 71 Kan. 508, 80 Pac. 962, 114 field was a passageway through a gap in the Am. St. Rep. 507. Plaintiffs were likewise fence on the south side of the highway; that entitled to take their threshing outfit over the pipeline was entirely concealed from the highway, and in order to enter the gap view by a rank growth of weeds, and that or gateway into the field where the threshplaintiffs did not know of its presence or the ing was to be done had the right to use not character of its contents; and that when only the worn part of the highway but the their engine crossed the pipe the oil gushed whole width of it. As oil is of an inflamout, caught fire, and destroyed the engine mable nature, great care should be exercised and threshing machine.
in transporting it along a highway. It From the testimony introduced it appears should be such care as is commensurate with that the pipe line is at the extreme south the dangerous nature of the material and edge of the highway, near to the fence and the consequences that should have been ap. about 25 feet from the center of the road; prehended from the means employed in carthat there is a ditch between it and the rying it over the highway. Hashman v. Gas roadway; and that at the place where the Co., 83 Kan. 328, 111 Pac. 468; Luengene v. pipe crossed the passageway into the field Power Co., 86 Kan. 866, 122 Pac. 1032. Pipes the pipe was partially visible through the carrying such material are usually and easdirt. Before attempting to enter the field ily buried in the ground, and the right to lay one of the plaintiffs went ahead and inspect- I such pipes on the surface of a highway is
For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
questioned. It has been held, however, that, therefore the judgment is reversed and the if pipes are laid on the surface the party cause remanded for 'another trial. All the who maintains them becomes liable for all Justices concurring. damages occasioned by placing them there, although such damages would not have been
(103 Kan. 73) occasioned by the pipes if they had been
HUSTON et al. v. COX et al. (No. 21467.) buried in the ground. Lebanon Light, Heat & Power Co. et al. v. Leap, 139 Ind. 443, 39 (Supreme Court of Kansas. May 11, 1918.) N. E. 57, 29 L. R. A. 342; Thornton on Oil
(Syllabus by the Court.) & Gas (2d Ed.) 8 510. In Indiana, etc., Gas Co. v. McMath, 26 Ind. App. 154, 57 N. E. 1. RECEIVERS w29 (2)APPOINTMENT - JU.
RISDICTION. 593, 59 N. E. 287, it was held that the
A receiver may be appointed by the district maintenance of a gas pipe through which court for an oil and gas lease of land beyond gas is flowing on the surface of the ground the jurisdiction when the instrument merely within the limits of a public highway ren
creates an incorporeal hereditament, and in any ders the owner liable for damages to one persons of the interested parties.
event when the court bas jurisdiction of the who without his fault breaks the pipe by 2. MINES AND MINERALS 97—EXISTENCE driving a traction engine over it and is in. OF PARTNERSHIP-COTENANTS OF OIL AND jured by an explosion of the escaping gas.
GAS LEASE. It is further contended that the plaintiffs created, a mining partnership between coten
Unless an ordinary partnership has been were guilty of contributory negligence in ants of an oil and gas lease may exist only driving over the pipe line when it was in plain while they actually engage in working the view. One witness stated that it was actu- property. ally brought to the attention of one of the 3. RECEIVERS Ow18_OIL AND Gas LEASE
EVIDENCE. plaintiffs. It appears that the pipe line was
The evidence considered, and held, a receiver lying on the surface of the road and was was properly appointed for an oil and gas lease, partially visible through the dirt and was although the interested parties were merely
cotenants. about the color of dirt. While a witness stated that when one of the plaintiffs got (Additional Syllabus by Editorial Staff.) down and examined the ditch to determine 4. MINES AND MINERALS 56-OIL AND GAS whether he could take the engine across his LEASE-ESTATE CREATED “INCORPOREAL attention was called to the pipe line, the lat
HEREDITAMENT." ter testified that he heard no such remark and to explore for oil and gas, and if it be
A lease granting the right to enter on land and did not have any knowledge that the found in paying quantities to operate and propipe was there until it was broken and the duce, is not a lease in the strict sense, and oil was thrown upon the machine. In the creates no estate in the lands, but merely an first petition which plaintiffs filed their at- growing out of, or concerning, or annexed to,
"incorporeal hereditament," which is a right torney, it appears, inserted in it an allega a corporeal thing, but not the substance of the tion to the effect that a portion of the pipe thing itself. was visible; that plaintiffs did not know it [Ed. Note.-For other definitions, see Words contained oil of an inflammable nature, but and Phrases, First and Second Series, Incor
poreal Hereditament.) supposed it was an old discarded gas pipe. The plaintiff testified that he did not know
Appeal from District Court, Sedgwick that the allegation was included in the peti- County. tion, and did not in fact see the pipe or know
Action by Edward J. Huston and others of its existence, and that when his testimony against George W. Cox and others. From an was given on that trial his attorney asked order appointing a receiver, defendants apand obtained leave to amend the petition by peal. Aflirmed. striking out this allegation. If this aver- David Smyth and J. W. Smyth, both of ment should be treated as a conflict in the Wichita, for appellants. Wilson, Madalene & testimony of plaintiff, it must nevertheless Hudson, of Wichita, for appellees. be held that it was within the province of the jury to decide that conflict. On the de
BURCH, J. The appeal is taken from an murrer to the evidence that part of his testi- order of the district court appointing a re mony which was favorable to plaintiffs must ceiver. be taken as true, and, although other testi- [1,4] The petition prayed for dissolution of mony given by him or in his behalf may con- a partnership, for an accounting, and for distradict that which is favorable to plaintiffs, position of the partnership property. The apit is the function of the jury, and not of the pointment of a receiver was asked by way of court, to determine which is credible and provisional and auxiliary relief. The chief controlling. Acker v. Norman, 72 Kan. 586, ground of opposition to the appointment of a 84 Pac. 531.
receiver was that the subject of the action Measuring the testimony as
was real estate situated in Butler county, quired to do on a demurrer to the evidence, and consequently that the court had no juit must be held that the issues in the case risdiction to appoint a receiver for it. should have been submitted to the jury, and The property involved is an oil and gas
we are re