HOIYI , E :LIFE 8 . L ACCIDENT CO. "V., BECKNER . .; 283. • • • ' HOME LIFE ACCIDENT COMPANy v. BECKNEE. Opinion delivered Marelr : INSUitANCi—IKDEMNITY P OLIC-1 -i0EFi3ITIJim.—TJrider a clause in an indemnity policy requiring the employer to give the inantei iminediate written notice: of; any, injury ito an employee : and of any' suit ipstituted by the latter, • the :giving, of such notice is.
284 HOME LIFE & ACCIDENT CO. v. BECKNER. [168 mot a condition precedent, unless it is made se by express•terms or by necessary implication, nor does failure to comply therewith constitute ground of forfeiture of •the policy. (2. , INSURANCE—INDEMNITY POLICY—DUTY TO GIVE NOTICE OF INJURY. —While a clause in an indemnity policy requiring the employer
- to give immediate written notice of any injurir to an employee is not a condition precedent, such provision is valid, and there can be • no recovery against the indemnitor unless there is a compliance therewith within a reasonable time. 3. INSURANCE—INDEMNITY POLICY—DELAY IN GIVING NOTICE OF INJURY.—Where an indemnity policy required immediate written notice of an injury to or suit by an employee, notice of an injury given one year, seven months and two days * after the • injury and ten months after suit brought was unreasonable delay, preventing recovery. 4.. INSURANCi—INDEMNrry POLICY-4EXCUSE FOR FAILURE TO GIVE 'NerIcE.—Where an indemnity policy required the insured employer to forward immediately any summons or other process in • any suit by an injured employee against the employer, the fact that delay of 10 months in forwarding summons was occasioned by the advice of the employer's attorney that the insurer was not liable, held not to 'excuse the delay. . Appeal from Dallas Circuit Court; Turner Butler, Judge; reversed. . T.,D. Wynne, for appellant. , James D. Head, Jones & Jones, McDonald & Jones, for appellee. . WOOD, J. On October 14, 1914, the appellant, a corporation of Arkansas, issued a policy in favor of the Pine Belt Lumber Company, a corporation of Oklahoma, to idemnify the latter for a term of one year against loss from liability arising out of damages not in excess of $10,000 on account of bodily injuries, fatal or non-fatal, accidentally suffered within the period' covered by the policy, by any employee of the lumber company while on duty within the factory, shop, or yards of the lumber company. The policy contained, among others, the following provisions: "This insurance is subject to the following conditions: * * * * ."G. The assured, upon the occurrence of any accident, shall give immediate written notice thereof,
\ • ARK.] HOME• LIFE & ACCIDENT 00. v. BECKNER. 285 with the • falest information obtainable at the time, to the head oface of the company at Fordyce, Arkansas, or to the agent countersigning this policy. He ehall give like notice, -With fullest ;particulars, of any claim that may be -made on account of such accident, and shall at all times render to the company all cdoperation and assistance in his power. "H. If, thereafter, 'any suit is brought against this assureThto enforce a claim for damages on account of an 'accident covered by this policy, the assured shall immediately forward to the company every summons or other process as soon as the same shall have been served on him, and the company will, at its own cost, defend it against such proceedings in the name and on behalf of the assured, unless it shall elect' to settle the same or to pay' the assured the indenmity provided for in clause 'A' as limited herein." , \ , On the 25th of June, 1915, one Clifford Riggs, while in the employ of the lumber 'company, received a per- ■, sonal injury. On March 25, 1916, Riggs instituted an action against the lumber company in the Oklahoma Dis-\ trict Court, and recovered judgment in that court for $6,000, which judgment was afterwards ' alarmed by the Supreme Court of Oklahoma. The lumber company paid this judgment in full on the third day of January, , 1921, amounting, with interest at the time of the satisfaction, to the sum of $7;368.05. The lumber company, through its trustees, the appellees, instituted this action against the appellant to recover on the policy above men-\ tioned the amount of that judgment. It was alleged in the appellees',complaint that the lumber company had complied with all the terms and provisions•of the contract, and that the appellant refused to indemnify it as provided by the terms of the policy. The appellant defended on the ground that the lumber company had not ( complied with the proYisions of the policy set out above. • • The facts f on the issues joined are substantially as follows : The injury to Riggs occurred, as above stated,
286 HOME LIFE & ACCIDF,NT Co. v. BECKNER., [1b8 on June. 25; 1915. On February 17, 1916, .Riggs' attorney wrote to the lumber company; notifying it that they. had been . employed to represent Riggs' interest in his claim fOr damages against the company. : 'They stated in this letter that the injuries : were received' as . " & resultt of a traili running away; over which the lumber comimny had control; that Riggs was riding on the engine by. virtue of a pass that the lumber , company . had issued to him permitting.him to ride at his own risk.'? McDonald, one. of the atterneys for the lumber company, testified • to the effect . that,' in his' opinion, under the terms of the letter received by the lumber' comfmny' from 'Riggs' attorneys, the ' insurance company was nOt liable becauSe the letter showed that the relation between' Riggs ''and the lumber con-many at the time 'Of Riggs' injury wa,A that Of paisenger and carrier, and not that f employer and employee. On Jonuary 24, 1917, 'one year,' seven months: and . two days after the injury o Riggs, McDonald :86, Jones, attorneys for the lumber , company; wrote to the appellant, stating in effect that Riggs had instituted a suit against it on March . 26, 1916, claiming that he was .injured while he was in the employ of the luinber company; and inclosing a copy . of Riggs' Complaint. In this letter the attorneys stated that it was the contention of the lumber company that Riggs was an independent . contractor and not an eMployee,'but that waS a . matter to be establiShed ml the cOurt upon trial 'of the case; that, if Riggs were found to r be an employee, then' the 'lumber coniPany would contend that -it . was within the t■rote'ction of the insurance against liability under the terms of its 'policy, and therefo're the limber company 1,N,T M' giving the insurance company notice . Of the action in order :that' the latter company . might come in and defend same or take such Steps as it deemed 'proper •to protect its interests, and stating that the case would likelY be set for trial on March 5,. 1917. To this letter the insurance company replied, stating that it had no- suggestions, to -make 'with reference ,to the , defense . of the
.] HOME LIFE & ACCIDENT Co. v. BEOKNEk 287 suit, .for the reason that there Was : nd obligation on its part. to interest itself in the matter ; that the injury was not reported to the appellant . inSurance company;: and for that reason it declined to ,interpose. The . cati g e, by consenti was heard by the trial court sitting as- a 'jury, and the' court found generally thelacts and law in favor of . the appellees,; and rendered judgment in their :favor in the sum 'of $7,368.05; with interest from the date of the judgment. at the rate of Six per cent. per annum from January 3; 1921. •From' that judgment is-this appeal. In the case of Hope Spoke`Co. v..Mdrylcind Casita0 Co., 102 Ark. 1, the policy under' reView' contained 'the prdViSiOn that "immediate' *flee 'of any accident, alrid of any shit reSulting therefrom!, with' everY , siimmoSn . other process, must be forwarded to the hoine offiOe of the company, or to its authorized representatives. P In that case the company issuing the . Policy received !actual notice Of the injury thirty-two days after' it occurred, arid it appeared that the , company was not injured by.real son ! of the fact that notice was net given earlier. y The Company made a full investigation in due linie -of the injury. We held; under the facts of that ease, that the language of the' policy above Cluoted ; was not a. condi.- tion precedent td recovery on the policy, i and saith;".The contract of insurance- does' not, in' express' terias;' make the prOvision with reference to giving notice of' an , acei-' dent a condition. upon . Which liability of the' insurer depended.... ! The ,. abSence ! of -language l indicating''' -an; intention to make coMpliance with that Provision ,a.'cdn= ditiOn Of recovery is; noticeable.' It does not; 7 in exPreSs teririsp declare a . forfeiture of•the insured's-right ' to recovery upon faihire to give notice, nor 'can . it be fairly implied, 'from the language of the contract, that the pro; visidn •Was intended as a condition precedent to-the-right ta 'recover: On' the contrary, the .. form of the Policy i and' the laUguage . employed in it indicated . a coiltrary.cnteti: tion.'? f: While the clause 'of the policy . Under review in the case' of Rope Spoke Co:v. : Md. Castialty Co.,-supra,
288 HOME LIFE & ACCIDENT 'Co. v. BECKNER. [168 is somewhat different from the language of the policy under review in the case at bar, there is no essential difference in principle. Whatever may be the rule in- other jurisdictions, this court is committed to the doctrine that failure to give notice under a clause in a policy siniilar to that under review "does not operate as a forfeiture of the right to recover, unless the policy, in express terms, or by necessary implication, makes the giving of the notice within the time specified a condition precedent to recover." See also Shafer v. U. S. Casualty Co., 90 Wash. 687, 156 Pao. 61 ; Md. Cas. Co. v.-Robertson .& Co., (Tex.) 194 S. W. 10140. There is no such express provision in the policy under consideration and no language making the provision as to immediate. notice the essence, of the contract. . We therefore cannot concur in the view of the learned counsel for the appellant, that the clause of the policy for construction in the case at bar .makes the. failure of the assured to comply with the provisions of the policy in regard to the giving of (immediate notice of the accident and ,of any suit instituted by ,the injured party against the assured conditions . precedent and grounds of forfeiture of the policy. We do i however, fully agree with the counsel for appellant in. r his - contention that there must be at least a bona . fide compliance on the part of the .assured with these proVisions of the contract before he is entitled to- a recovery. The assured, in other words, cannot wholly : ignore the requirements of the policy as to notice of ,the occurrence of the accident and as to the claim of the assured 'on account thereof, and likewise the provision requiring notice of any suit brought by the injured party against the assured for damages on account of the accident. These provisions in an insurance policy, are valid. They are intended for the protection of the insurer, in order that he may investigate the circumstances of the injury and determine the course that he will pursue with reference to any claim that may be asserted against the
klik.] HOME LIEE & ACCIDENT -CD: A3E01iN,Elt. 289: aSSured by reason of such injury; either,before:cr -after suit. Even though not -a • condition ,.,prededent. , áhd.nbt. \ a ground fot forfeiture -of the•pOlicy, , the . 'insurer has = the right , te: insist that the insured ,Comply, gations ;of his. contract. This court 'did not , hold, dri . the case Hdpe Spoke Ca. v.: Mcl, ects; Cd., sup g a,:that such! provisions of, the contract', of insurance could be regarded, on , ,the part of the : insured. r On.the contrary;' we there, held. ,that there yms,a, cornpliande i;With . such, provisions ; of; ,the contract.. As; we, view the authorities,: the courts, generally, hold that, there; can; :he,f no ; recovery unless. there is, a compliance Nith :these prov,ision .s ;of -th.e policy. 4, Copley.'s Briefs, on Insurance,..p.. , 3571 ;, 67, L it R., This . brings us to the question , as to ivihether ,there; is any substantial testimony:tending to' suppOtt , the ifind-..? ) ing of the , :court that Ahé: appellees , had. complied ;with . their . contract , to give immediate 'notiCe: Of : the accidentv, i '' and whether the lumber company immediately ,forwarded ; to: appellant the ;sumrnons: served on the insurance 'coni- . ! pany in' the Suit hy Rig'gs: against such ' COmpany.; Cooley . says :, ' f The condition' requiring . 1 . ‘ . immediate', notice' or 'notice förthwith' .ofli injury 'to, ,lemployees,; means written; notice. within a , reasonable tirne, l under the, , \ circumstances ,of the- case.. * ,* * The question 'as : to i what would be -a reasonable time,• under; the , varying: cirh \ cumstances of each particular ca g e; would seem; 'primarily! I to, be a question for the jury', :under . proper , instrhetiOnsi l i by the court.", Cooley's' 'Briefs; pp. 3572.3575;,andieasew there cited. , : , '., ,, . ,, , i 1,, ', The 'accident reaulting i'n the injurY.'tO'"Rikkii toccurred 'onaune 5, 1915. 'The Manager" Of the) coin.:' pany: and alsb its attorney knew' of ' the ' accident s'aifdi ' injury to Riggs on that day. '1 q cDonald, attorney' fef 'the' 1 lumber company; was of the opinion, from' the . Statethent of how the accident occurred by,the manager :off the,comL: , pany, that the insurance:.company would riot,be liable under its policy: The' lumber ,company did 'not' notify:.
‘), 1 290-HOME LIFE_ Si ACCIDENT C. V. BECKNER. • [168 the insurance : company of the accident until January 24, 1917. Riggs,. through his attorneys, notified the lumber company of his claim for damages • against it on Febru-ary 17, 1916, and on the 25th of March, 1916, Riggs instituted a suit in a district conrt of Oklahoma against the lumber company to recover damages for his injury. But, the lumber company did not notify the appellant insurance company of the filing of this suit until Jan-uary 24, 1917. These facts are undisputed, and there is therefore no testimony to sustain a finding of the cOurt that :the appellant had notice of the accident -and of the suit within a reasonable time. The court shonld have declared as a matter of law, upon the undisputed testi-. mony, that the lumber company did not comply with the provisions of the contract concerning the. , notice -to he given appellant of the occurrence of the accident and'of. the institution of .the suit by Riggs against the 'lumber oompany. The failure, of the lumber 'company to notify the.appellant of the occurrence of the injury . for a period of one year,. seVen months and two , days after its date, is an 'unreasonable and inekcusable delay... LikeWise, the. failure on 'the part of the lumber company to forward the summons against it, thus notifying the insurance company of the suit that had been instituted against the fl . Itiggs, for a period of ten months, lumber company by was am unreasonable delay within the terms of -the coli:L' tract of insurance. The appellant iS in no manner • bound..by the opinion of- the lumber . company's attor-' neys to the offect that the appellant, .under the circiim-stances of the injury, was not liable to the lumber coin.- pany under the policy. This opinion of the attorneys was not sufficient in law to justify it in failing, for a period of ten months, to forward notice to the appellant Of, the suit that had been filed against it. . Mr. Cooley says : " The courts, without regard to the question whether reasonableness of the time is a matter for the court or the jury, have held unexcused delays of varying length unreasonable per se," and sev-
K.] -HOME LIFE & ACCIDENT 00. V. BECKNEE. 291 eral cases are cited in support of the text, where failure to give notice for a less time than ten months was held to be unreasonable delay. 4 Cooley's Briefs on Law of Insurance, p. 3573. The trial court erred in failing to find as a matter of -law that the lumber company had not coMplied with its Contract, and that it was therefore not entitled to recover. The judgment is therefore - reversed, and' the cause will be dismissed. Mo-CULLoorr, C. J., (concurring). ; My concurrence in the reversal of this 'case i§ based entirely on other grounds than those stated in the opinion Of the majority, for I think that a double mistake has been made by the majority in 'holding that the . giving of irinnediate notice Of injury and of the commencement of an aetion was not a condition precedent to the .performance of which operated as a forfeiture, and in holding that failfire tO cOmply with these : requirements operated as a forfeiture With-- out the same being 'treated as conditions precedent. 14y -view Of the case is that the requirements with resPect notice were conditions precedent, and that there waS' a forfeiture on account of failure to perform 'those conditionS. It seems to me that the majority have misConceived and miSapplied the decision 'of our court in 'Hope Spoke Co. v. Maryland Casualty Co., '102 Ark. 1. The policies involved in the two cases are radically different. The . policy in the ease cited did not, either in expresS words' or by necessary implication, declare the requirement with respect to notice to be a condition: The policy merely stated the requirement, but did not make it a condition, .nor declare that a forfeiture would result from non-compliance. On the other hand, the policy in the cAse now before us states that it "is ' subject to the following conditions," and then proceeds to state the' requirements in regard to notice. It does not state the requirement as a eondition precedent, but does state it as a condition, and the necessary result is that it is a condition precedent. In the opinion in the case cited we recognized that the question involved was a. very close one, and that the
n ?t92 1-10ME .LIFE 85. ACCIDENT 'CP: .v. BECKNER.. [160 terms of-the policy came very close to the line of distinc, tion in•the authorities-on the subject. We •followed the line of authorities -holding 'that "failure to give notice within a specified time, in accordance 'with the terms of the policy, does not operate as a forfeiture of. the right to:recover unless , the policy, in express terms or by necessary, implication Illakgs the giving of notice within the speeed time a condition precedent to recovery." the present case the policy does, in exPress terms, declare -thp giving , of notice within the time specified to be a condition. If it is a condition at all,. iti , s a c , ondition weep- dent to the right of recovery on the policy. „ The majority is also in error, I think, in holding that, if the reqnirement not, a condition , precedent, the , failure •to give,,notice in ,this case ,worked a forfeiture. The oorrect 'rule is, that, unless the , requirements of the policy, constitute • conditions : precedent to recovery, or rightsfunder the policy are forfeited by failure to comply with. the„requirements, then the omission is not a ( defense to 'a suit on the l policy]nless soroe.injury resulted from such, omission. That is precisely what we decided i , n,I-jope Spoke Co. y.,Maryland Casualty Co., .supra. In that case we held that the requirement of notice was not a condition l ,precedent, and that failure to strictly comply with the requirement was, not a defense because no injury was pliQw1" to have resulted. See also Frank Parmelee Co..v. Life Insurance Co., 166 Ped. 741, where the court said: "In contracts:of ,this kind, to escape liabil, ity, the, insuren must show that the, breach is ,something more than , a mere technical departure from the letter of the bond—that is, a departure that results in substantial prejudice and injfiry to its position in the matter." , In, the•present case 'there was no attempt to show • that anY injury resulted to appellant from the failure of appellee : to give notice of the injury and of the institution . of the . action by the injured employee. But, for the . reasons : stated above, I concur in the reversal. Mr. -Justice -SMITH agrees with me in the views here expressed.: .• • • •
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.