Zurich General Accident & Liability Insurance v. Union Ferry Co.

The evidence in this case presents a question of fact as to the nature of the contract between the parties to the action.

Admittedly, plaintiff issued and delivered to the defendant a combination policy covering liability under the Workmen’s Compensation Law, and also other employers’ liability. Defendant insists that the contract ordered was to cover its liability under the Workmen’s Compensation Law and that alone. It was for the jury to determine whether defendant’s claim was true. If this be true, there was no contract so far as the additional insurance was concerned, and defendant would then be entitled to a rescission of that portion of the policy issued, unless defendant was negligent in failing to discover the error in the policy. (Curtis v. Albee, 167 N. Y. 360 , 365; Salomon v. North British & M. Ins. Co., 215 id. 214, 218.)

Whether defendant was negligent in this respect should also have been left to the jury. (Hay v. Star Fire Ins. Co., 77 N. Y. 235 ; International Ferry Co. v. American Fidelity Co., 207 id. 350 .)

The decisions of the United States Supreme Court in Southern Pacific Co. v. Jensen ( 244 U. S. 205 ) and Knickerbocker Ice Co. v. Stewart (253 id. 149) did not render the contract between the parties void. Defendant was at all times protected from liability, and if the effect of those decisions removed defendant’s employees from the application of the Workmen’s Compensation Law, still the risk which existed before was not destroyed. (New Amsterdam Casualty Co. v. Olcott, 165 App. Div. 603 .)

Defendant has received the benefit of the policy issued and must pay the premiums as therein specified for the insurance furnished under the Workmen's Compensation Law; whether it shall pay more depends upon the findings of the jury upon the questions to be submitted as here indicated.

Blackmar, P. J., Manning, Kelby and Young, JJ., concur; Kelly, J., dissents and reads for affirmance.

The defendant’s claim, repeated several times in its points, that the Supreme Court of the United States decided in the Jensen case that the Workmen’s Compensation Law was unconstitutional as to maritime companies, is of course without foundation. As to employees of such companies injured while on shore, the law was entirely valid and bound the defendant. (Industrial Commission v. Nordenholt Corp., 259 U. S. 263 .) I understand that the majority of the court agree with this, and that the defendant is liable for the premium covering the compensation insurance. But as to the other insurance effected by the policy delivered, which stated on its face that it was “ Standard Form Employers’ Liability and Workmen’s Compensation Policy,” etc., my brethren are of opinion that there was an issue of fact whether defendant wanted or requested any insurance beyond its liability under the Workmen’s Compensation Law.

I find no evidence in the record to show how much, if at all, the premium was increased because the insurance covered claims outside the Workmen’s Compensation Law, and I suppose this was something to be proved by defendant if there was any increase. In fact at the opening of the trial defendant’s counsel stated in answer to the court’s inquiry: “ I am inclined to think we will concede that if they are entitled to anything at all, they are entitled to the amount ” claimed (i. e., the amount demanded in the complaint, and for which the verdict was directed). So it would seem that the evidence presents no issue as to the amount due because it is evident that plaintiff was entitled to recover premium for the conceded insurance under the Workmen’s Compensation Law.

But it seems to me that defendant is concluded from disputing the verdict directed, by the allegations in its amended answer. What insurance was desired by defendant?

Defendant “ further alleges upon information and belief that on or about the first day of June, 1916, the defendant, desiring to have the plaintiff assume and agree to pay only according to the provisions of the Workmen’s Compensation Law of New York State any compensation defendant might be adjudged to pay to its employees or their dependents under the Workmen’s Compensation Law of New York, by reason of accidental injuries or death, and desiring by reason of such agreement with plaintiff to be protected

If the defendant desired by reason of its agreement with plaintiff to be “ relieved from all other liability [¿ e., other than liability under the Workmen’s Compensation Law] whatsoever to such employees at common law or otherwise, on account of such injuries or death, and so that the liability to pay the compensation specified in said Act should be exclusive of all other liability,” it seems to me the policy delivered and accepted and retained without objection for its full term was in accordance with its desire. It relieved the defendant from liability under the Workmen’s Compensation Law and from “ all other liability.”

I am inclined to think that the direction of a verdict for plaintiff was proper, and am compelled to dissent and vote for affirmance of the judgment.

Judgment and order reversed on the law, and new trial granted, with costs to abide the event.