author: TALIAFERRO, Judge.

text:
    RICHEY v. SWINK et al.
    No. 6370.
    Court of Appeal of Louisiana. Second Circuit.
    Oct. 31, 1941.

      Jackson & Mayer, of Shreveport, for appellants.
    John R. Hunter & Son, of Alexandria, and Hunter & Hunter, of Shreveport, for appellee.
   TALIAFERRO, Judge.

This is a tort action in which plaintiff, Dave Richey, sues Douglas A. Swink and his alleged insurer, the Metropolitan Casualty Insurance Company, to recover damages sustained by him from injuries caused by one of Swink’s trucks, in Lafayette Parish, on October 9, 1939.

The facts of the accident are undisputed save in one material respect, which will be hereinafter discussed.

The A. & B. Pipe & Supply Company, Inc., employed Swink to haul from the scene of the accident and thereabouts to Shreveport, Louisiana, some heavy used metal pipe. The earth had been removed from a line of this pipe and the sections thereof were assembled in piles for convenience in loading. At the locus of the accident five sections of pipe had been assembled. Each section was about thirty feet long ánd each weighed approximately one thousand pounds. Plaintiff and other employees of the A. & B. Pipe & Supply Company, Inc., assisted by Swink’s driver and helper, loaded the pipe on a truck and trailer owned by Swink which had been stopped parallel to the pile of pipe. The loading was on this wise:

One end of a section of pipe was lifted up and laid on the trailer near its rear end and fastened. Then the crew would go to the other end of the pipe and lift it upon the truck’s bed. Each section would be pushed as far as possible from the loading side so as to make room for other sections.

After the five sections had been loaded, the truck driver climbed into the cab, preparatory to driving forward to the next pile of pipe not far away. Plaintiff and some members of the loading crew were then together near to and on the left side of the truck. Plaintiff stepped forward close to the side of the truck, immediately in front of its rear dual wheels, to shove over the last loaded section of pipe. At this moment the truck started forward. The outside rear wheel caught plaintiff’s right foot, shoved him down on his face and when the truck was stopped, the wheel rested squarely upon the small of his back. By reverse movement, it backed off of his body.

Plaintiff charges that, contrary to rule and custom, the driver of the truck, without signal or warning to or from him and without first ascertaining if it was safe to do so, suddenly drove the truck forward and caused the accident and because of these acts of negligence and carelessness, plaintiff was injured.

Defendants deny that the truck operator was negligent in any way or manner and aver that plaintiff saw or should have seen the driver enter the truck’s cab and knew or by the use of reasonable care should have known that the truck was about to be moved forward, and, moreover, was warned by the driver thereof that the truck was about to go forward; that the truck was started and moved forward in the usual and customary manner, carefully and slowly; that plaintiff by the exercise of reasonable care could have avoided the accident. Further pleading, defendants say that should it be found and held that the truck driver was negligent and that his negligence was a proximate cause of the accident, in such case they contend that plaintiff was guilty of contributory negligence in the respects above stated, and that such negligence bars recovery.

Trial of the case was concluded on December 12, 1940. It was taken under advisement by the court and on December 31st, prior to rendition of judgment, the Associated Indemnity Corporation filed a petition of intervention wherein it is averred that the intervenor insured the A. & B. Pipe & Supply Company, Inc., as employer, under the Employer’s Liability Act of Louisiana, and for this reason paid to plaintiff, on account of the disability caused him in and from said accident, the sum of $300.30; and, in addition, in that certain proceeding entitled “Dave Richey vs. A. & B. Pipe & Supply Company, Inc.”, filed in the Fifteenth District Court in and for Lafayette Parish, a compromise settlement, with the court’s approval, was effected, whereby in-tervenor paid to said plaintiff the further sum of $416.80 in cash, which was accepted by him in complete discharge of all of inter-venor’s liability to him. Intervenor also alleged that it had paid the hospital and physician’s bills incurred in treating plaintiff’s injuries, in the sum of $250 made up of several accounts itemized in the petition.

Intervenor, availing itself of the provisions of Sections 7 and 23 of the Employer’s Liability Act, as amended by Act 247 of 1920, and Act 85 of 1926, alleges that on account of said payments to plaintiff and for his account, it is subrogated to his rights against defendants to the extent of $981.40 and is entitled to be .paid this amount by preference and priority out of any recovery by him herein.

Plaintiff and defendants moved to dismiss the intervention on the ground that it came too late; that to allow and consider it would require reopening of the case. The motion was overruled. Thereafter intervenor amended its petition by adding thereto a demand for reasonable counsel fee, fixed at $150. Defendants objected to the filing of this amended petition for the same reasons assigned in their objection to the filing of the original petition of intervention. The court reversed itself and dismissed the intervention as to defendants only. The case was reopened as between plaintiff and intervenor and the issues raised by the intervention were tried upon stipulation of counsel.

Defendants assign as error the court’s refusal to dismiss the intervention as to plaintiff. Plaintiff here makes no complaint on this score. Defendants are without right to do so as they have nothing to gain nor lose from the court’s action. The intervention is directed primarily against the plaintiff. He alone will be pecuniarly affected by judgment in intervenor’s favor.

While the case was under advisement, defendants filed an application to reopen it to .the end that testimony supporting the allegations of the application could be admitted. Affidavits to support the application were attached thereto. The application to reopen was opposed by plaintiff who also submitted counter affidavits. The application was denied with written reasons therefor.

Judgment was rendered for plaintiff in the sum of $3,500; also in intervenor’s favor for $932.10 to be paid from the judgment in plaintiff’s favor, and to that extent a lien on said judgment was recognized in inter-venor’s favor. The claim for attorneys’ fee was rejected. After unsuccessful effort to procure a rehearing or a new trial, defendants appealed.

As neither plaintiff nor intervenor has appealed, nor answered defendants’ appeal, no change in the judgment as between these appellees is permissible. Only defendants’ side of the case is before us.

It is conclusively shown that it was the rule and custom that a signal of some kind be given the truck driver before he was warranted in driving the truck forward after a pile of pipe had been loaded thereon. Of necessity, such a rule should have prevailed. Without it, accidents would have been, common. The truck driver testified that his helper, Ed Winfrey, at the time near the rear end of the trailer, did signal him to go forward, but Winfrey contradicts this statement. He was asked specifically if he knew whether any one of the crew gave the signal to go forward, to which he replied: “No, I do not”. The driver gave the following testimony on this phase of the accident, to-wit:

“Q. Now, did anyone give you any signal of any kind for you to start up? A. Well, after I got in the truck and had the motor running I looked back through the window, and could see Winfrey right on the side of the trailer, and he raised his hand. I did not know what he was doing.
“Q. Was it necessary for someone to give you a signal ? A. Yes, sir, because we talked about pulling up; Winfrey told me to go ahead and pull up when I started around.
“Q. That was before you got into the cab"? A. Yes, sir.” % * *
“Q. You looked through the opening in the back of the cab ? A. Yes, sir.
“Q. Before you proceeded forward? A. Yes, sir.
“Q. Did you see Dave ? A. No, sir, he was standing on the left hand side of the trailer and could not see over where he was.
“Q. In looking back through the opening in the back of the cab, you did not look to the left, could not look unless you turned around ? A. Yes, sir, I turned clear around.”

It would seem clear that had the driver done what he says he did, he would have seen plaintiff pushing the section of pipe into desired position. The driver’s seat is on the left side of the truck and so was plaintiff at the time. A slight glance from the left side of the cab would have been sufficient to reveal the situation.to him. It is clearly shown that no signal to start was given the driver and also that he gave no signal of his purpose to start the truck.

It is true, as argued, that plaintiff was experienced in this character of work and knew well the modus operandi. An essential and integral part of the modus operandi was that the truck would not be started forward until all the pipe there had been loaded and was in proper place. Plaintiff was within his rights in relying upon the rule all knew to prevail in work of this character. A duty due him was breached. The negligence superinducing the breach is actionable.

We do not agree with the contention that plaintiff was also negligent simply because he saw the driver reenter the cab for the purpose of starting the truck. He had the right to assume that the driver would observe the custom and not start the truck until signaled so to do. The motor of the truck was allowed to run while the pipe was being loaded, therefore, plaintiff’s attention was not attracted toward the driver as it possibly would have been had the motor been started after being dead. As the ground was wet and soft, it is not improbable, as contended, that the truck started off with a jerk and suddenly fouled plaintiff’s foot as he says.

Defendants argue that plaintiff has not proven that he was seriously injured in the accident. Why he escaped from being fatally injured or injured much worse than the record discloses, approaches the mysterious. The wheel of this heavily laden truck actually rolled upon his prone body, stopped momentarily on the small of the back and was then slowly backed off. Yet, it is certain no bones were broken and it is not even certain that a fracture of any bone was sustained. Perhaps the wide face of the tire and the wet, soft dirt account for this.

Plaintiff was lifted from the ground by 'fellow workmen. He was given first aid by a local physician and then taken to a hospital in the City of Alexandria, where he was a patient for twenty-seven days. He alleges that as a consequence of the accident, he is totally and permanently disabled; that the nerves, ligaments and muscles of his back are badly torn and bruised; that his spine is dislocated and strained; that the sacro-iliac joint is broken and dislocated; that his left leg is stiff and he is forced to walk with a limp, accompanied by pain. Only a meager portion of these allegations is sustained by the testimony in this record.

In view of the truck’s weight, it is certain that the muscles, tissues, etc., of plaintiff’s lower back were mashed and bruised. The fact that he had to be hospitalized for twenty-seven days unquestionably shows that he suffered substantial injuries. However, no attending physician was offered to prove the nature, extent and character of the specific injuries as they appeared while plaintiff was in the hospital. X-ray pictures made at that time disclosed no fractures nor broken bones. Pictures made by Dr. Caldwell, orthopedic surgeon in Shreveport, seven months after the accident, in his opinion, reveal old trauma to the fourth and fifth lumbar vertebrae. He examined plaintiff physically a few days prior to the trial and testified that he “walked with a very marked limp, protected gait, extremely guarded with his back”, and that he would continue to suffer pain. He found reflexes of the muscles to be normal. It was his opinion that plaintiff is unable to do heavy work. He was reluctant to estimate the period of such disability, but finally said that if plaintiff did recover from the disability, it would require not less than ten or twelve months.

Plaintiff testified that he suffered pain incessantly in his back for six months and during this time hot water bottles were used in the effort to alleviate them; that intermittently, pain develops in the back and legs; that he had not since the accident and could not do manual labor through which he had earned a livelihood. It is shown that he was a strong, healthy man before being hurt. His testimony is corroborated by that of a sister-in-law in whose home he lived for several months after being discharged from the hospital and who assisted in administering to his ailments.

In June, 1940, plaintiff compromised with his employer’s insurer for $416.80. He had already received $300.30, being twenty-one weeks’ compensation at $14.30. When the compromise was effected, plaintiff should have known the extent of his physical injuries and disability as well as he did when he filed suit only two months later. In the petition, filed in connection with the compromise, it is stated that he sustained sacro-il-iac sprains and serious injury to his legs and back with attendant nervous involvement. He also alleged therein .that he believed his disability to be total and permanent as he did in the petition in this tort action. There is no contention nor intimation that in the interim his condition changed for the worse. In view of his then and present professions, it is very strange that he would have accepted so -small a sum in cash and given up the right to further payments of compensation. , If he was totally and permanently disabled when he filed the present suit, undoubtedly he was in that condition two months previous. However, we do not believe he is now so affected nor that his physical condition since being discharged by the hospital physicians has so indicated. The trial judge is also of this opinion.

As against the Metropolitan Casualty Insurance Company, it is contended that plaintiff has utterly failed to make out a case. This position is predicated upon the failure by plaintiff to introduce in evidence the policy of insurance issued by this defendant to Swink.

Plaintiff, in Article 19 of his petition, alleged: “Your petitioner shows that at the time of the accident above described, the truck owned and operated by the defendant, Douglas A. Swink, was covered by a policy of liability insurance written by the defendant, Metropolitan Casualty Insurance Company; aad the Metropolitan Casualty Insurance Company is liable in solido with and for the negligence of the defendant, Douglas A. Swink, or any employee of the defendant, Douglas A. Swink, while operating a truck of the defendant, Douglas A. Swink.”

Answering this article, the defendants aver: “In answer to the allegations of Paragraph 19 your defendants show that the policy of insurance is the best evidence of the contents thereof and the provisions therein, otherwise the allegations of this paragraph are denied.”

Plaintiff argues that since the issuance of the policy is admitted, and no special defense to the suit was urged by the insurer, it is estopped to deny liability; that the failure to file the policy in evidence or to urge some special defense thereunder is the best evidence that had the policy been introduced in evidence, its contents would have been unfavorable to the insurer; that the burden of proof that the accident was not within the policy’s .coverage rested on the insurance company. Touching this issue the lower court in written reasons for judgment, said: - “During the trial counsel for plaintiff and defendants had a discussion about the policy and about producing it and filing it in evidence, plaintiff contending that the defendants had admitted the existence of the policy in their answer, and defendants contending they had made no such admission. At that time I advised counsel for defendants that I considered their answer to paragraph 19 of the petition to be an admission of the existence of the policy, and that if they, (defendants), failed to produce and file it in evidence, I would, under the jurisprudence of our State, consider that if produced, it would be unfavorable to them. The rule, as I appreciate it, is, that if evidence under the control óf a party to a suit is not produced by him, the inference is fairly drawn that if such evidence had been produced, it would have been unfavorable; and the insurance policy, the existence of which defendants admitted in their answer, was certainly under their control.”

There are various forms of (public) liability insurance. Some policies, if not all, contain many restrictions and limitations with respect to the insurer’s liability. Plaintiff alleges only that Swink’s truck was insured by a policy of liability insurance written by the Metropolitan Casualty Insurance Company and that that company is liable for the negligence of Swink’s employee, the truck’s operator. Defendants simply admit that “a policy of liability insurance” was issued by it and that its contents are the best evidence of what it contains. They deny that under the terms of the policy the insurer is liable for the truck driver’s negligence. Whether the accident is within the policy’s coverage may be determined only fro'm the contents of the policy. The burden rested upon plaintiff, not defendants, to make out his case against the alleged insurer. He should have caused the original policy to be produced so that it could be offered in evidence or procured a copy thereof. In view of the allegations of the petition and the answer, above quoted, defendants have not admitted liability under the policy, but on the contrary, clearly denied such. We are not authorized to infer that the policy covers the facts of this case and, this being true, we have no right to hold the insurer responsible to plaintiff to any extent. We do not think the rule invoked by the lower court applicable here. The policy was not in the insurer’s possession.

Defendants assign as error the overruling of their application to reopen the case prior to rendition of judgment. It is alleged in this application that since the trial of the case, new evidence had become known to defendants that is material and relevant to the facts of the case; that the existence of said evidence was unknown to them at the time of trial. The gravamen of the application and supporting affidavits is that plaintiff has been able to operate a road house and engage in fisticuffs and drunken brawls since he was injured and, therefore, the allegations that he was unable to work because of said injuries are untrue. The counter affidavits filed by plaintiff contradict the contents of • those filed by defendants.' The lower court discusses somewhat fully these affidavits and finally concluded: “I declined to reopen the case because I do not believe defendants used due diligence to discover this evidence prior to the trial, and for the further reason that it is doubtful that testimony of Van Esselberg is entitled to much credit anyway.”

The Van Esselberg referred to made an affidavit that plaintiff came to his father’s place of business in an intoxicated condition, became boisterous and insulting and threw heavy objects into the building after it had been closed because of his conduct; that he (affiant) engaged plaintiff in fistic 'combat and got the better of the battle although plaintiff offered stout resistance.

An application to reopen, such as is before us, like one for new trial, addresses itself to the sound legal discretion of the trial judge. His ruling thereon will not, save for clear reasons, be overruled. He states that defendants did not use due diligence in ascertaining the names of the witnesses and learning the nature of the evidence they would give if the case was reopened to admit their testimony. In fact, defendants do not allege that they made any effort whatever prior to trial to procure the testimony of these witnesses. This is indispensable to favorable action on such an application. It must clearly appear that the applicant has used every effort within his means to procure the evidence before trial. If there is doubt on the subject, it is resolved against the applicant. In addition to all this, if these witnesses were in court and testified in keeping with their affidavits and the plaintiff’s witnesses did likewise, it is reasonably certain that the outcome of the case would not be different. To warrant remanding the case to admit the referred to newly discovered evidence, it should appear that such evidence would be sufficient to bring about a different result. We think the application was properly overruled.

Plaintiff follows heavy oil field work for a living. When injured he was earning $22 per week. His case, in some respects, has unique features. The trial judge experienced some difficulty in determining what he thought would be a proper award of damages. As a rule, we are loath to disturb the quantum of damages fixed by a trial judge in personal injury cases, but, after mature consideration of the facts of the present case, have reached the conclusion that the award is more than it should have been. It will be reduced to $2,500.

For the reasons herein assigned, the judgment appealed from, in so far as it condemns the Metropolitan Casualty Insurance Company, is annulled and reversed and the suit as against it is dismissed as in case of non-suit; and in so far as said judgment condemns the defendant, Douglas ' A. Swink, it is amended by reducing the amount thereof to $2,500. In all other respects said judgment is affirmed with costs.


source: Caselaw Access Project

license: Public Domain

text:
    LEWIS v. LOUISIANA INDUSTRIAL LIFE INS. CO.
    No. 6315.
    Court of Appeal of Louisiana. Second Circuit.
    Oct. 31, 1941.

      E. B. Charbonnet, Jr., of New Orleans, and Chandler Furman, of Shreveport, for appellant-appellee.
    Guy Wimberly, Jr., of Arcadia, for ap-pellee-appellant.
   TALIAFERRO, Judge.

This suit involves alleged rights of the plaintiff under five life endowment insurance policies and under one combination life insurance, sick and accident benefit policy, all issued by the defendant at plaintiff’s instance. In four of the life endowment policies, plaintiff is designated as beneficiary. One of these policies is on the life of a brother; one on the life of a sister; one on the life of a daughter, and in the other, plaintiff’s mother is the insured. The fifth life endowment policy was issued to plaintiff. A sister is named beneficiary therein. The sixth policy was issued to plaintiff and her mother is named, beneficiary under the life insurance feature thereof. All of said policies excepting the sixth, issued during the period between October, 1928 and November, 1938. All premiums thereon to and including September 5, 1939, were paid by plaintiff. None thereafter was paid by any one.

The sickness and accident benefit policy contains these stipulations:

“Weekly benefits for sickness will only be paid for each period of seven consecutive days that the insured is, by reason of illness, necessarily confined to bed and that he shall remain under the professional care of a duly licensed and practicing physician. * * * * *
“The insured shall not be entitled to any benefits for sickness or accident under this Policy unless a certificate by a regularly licensed and practicing physician (satisfactory to the Company) showing the cause of the sickness or injury shall have been furnished the Company or its authorized agents within seven days from the date of physician’s first visit or treatment; and benefits for sickness or accidental disability for any subsequent week shall not be claimable unless at the beginning of each subsequent week for which such benefit is claimed a similar certificate is furnished. No liability for sickness or accidental disability shall begin to accrue under this Policy for any week until such a certificate is received as above set forth.”

Plaintiff was taken sick on or about August 28, 1939. She summoned Dr. Huggins, a practicing physician in the City of Shreveport, who found malaria to be the superinducing cause of her illness and prescribed for her accordingly. Plaintiff had Dr. Huggins fill out and sign a certificate in printed form, furnished by defendant, purporting to cover the facts of her case, which she mailed to defendant with request for payment of weekly sick benefits. This certificate was received by defendant in due course. However, it was found to be deficient in several' respects, which plaintiff admits, and for this reason it was returned to plaintiff with the request that she have it properly filled out and returned to defendant. This was not done. She says she forgot about it. It was not introduced in evidence. No other physician attended plaintiff until Dr. Harris was called in.

On September 21st, plaintiff was visited by Dr. Harris, who diagnosed her ailment as hapatitis malaria. Her temperature was 99.2 and pulse rate 108. Dr. Harris also-filled out and signed a regular printed form of certificate giving the facts of plaintiff’s illness as he found them to exist. He did not state in the certificate nor did he testify that this slight temperature would necessarily confine plaintiff to bed. This certificate was also sent to defendant with request for payment of sick benefits. The request was refused on the alleged ground that plaintiff’s illness did not as a fact confine her to bed. This suit followed.

Plaintiff seeks firstly to recover sick benefits for the period of her alleged illness, to-wit: Seven weeks at the rate of $5 per week, plus statutory penalty and attorney’s fee of $150; and, secondly, to recover the premiums paid by her on the life endowment and life insurance policies with interest. This phase of her suit is predicated upon the fact, as alleged, that defendant breached all of said contracts by refusing to accept from her the premiums due thereon after September 5, 1939.

Defendant denies that the life endowment and life insurance policies were breached or became ineffective because of any act or acts on its part or on the part of any of its agents or representatives; that plaintiff at no time offered to pay any of the premiums on any of said policies after September 5, 1939, though repeatedly solicited to do so, and, therefore, there was not any refusal by its agents or representatives to accept from her said premiums ; that said policies simply lapsed for non-payment of the weekly premiums due thereon and as stipulated therein.

As regards the demand for sick benefits, defendant avers that plaintiff furnished it with only one physician’s certificate in the form and as required by the policy as a condition precedent to her right to demand payment thereof and that payment was declined because plaintiff, for the week covered by the said certificate, was not confined to bed, such confinement, under the terms of the policy, being indispensable to the right to recover said benefits.

The trial court gave judgment for plaintiff for sick benefit for one week, or $5, plus penalty of like amount and for $50 attorney’s fee. In all other respects her demand was rejected. Both parties appealed.

Plaintiff assigns as error in the judgment the rejection of her demand to any extent. Defendant argues that no judgment at all should have been rendered against it. In the alternative, it contends that the attorney’s fee is excessive and that the penalty should not have been imposed.

Plaintiff and all others who testified in this case are members of the colored race. Therefore, the credibility of neither enjoys any advantage over that of the other on racial account.

Defendant’s agent called at plaintiff’s residence each Tuesday to collect premiums due under the policies involved herein. She made no payments otherwise. It was the rule and custom of defendant to thus collect premiums. Plaintiff testified that after September 5, 1939, no one representing defendant came to her home to collect the premiums and for this reason she paid none after that date. She says that had they come to see her as was their custom, she would have paid the premiums. She alleged, however, that defendant refused to accept her offer to pay the premiums. The sick and accident benefit policy, under its own terms, did not lapse until four weeks’ premiums were in arrears. Her testimony to the effect that payments were not solicited of her by defendant’s agents after September Sth is mildly corroborated by that of a colored man who leased from her a room in which he lived.

There is authority for the proposition that when the insurer’s agent regularly calls upon the insured for payment of premiums, the insured is within his rights to act upon the custom thus established. He is not required to make such payments otherwise unless prior notice is given him of the intention to abandon the custom. Riley v. Life & Casualty Ins. Co. of Tennessee, 184 S.C. 383, 192 S.E. 394; Cooley’s Briefs on Insurance, 2d Ed., Vol. 4, page 3591.

However in the instant case, the testimony convinces us, as it doubtless did the lower court, that plaintiff’s failure to pay the premiums as they matured was not due to lack of request therefor from defendant’s agents.

A negro man by the name of Hardy Walker, up to and including September 5, 1939, acted as defendant’s agent in collecting the premiums from plaintiff. This was the last day he made a collection as he then left defendant’s employ. On this last visit he was accompanied by J. C. Perry, defendant’s assistant manager. Plaintiff then complained about not receiving payment of her claim under the certificate of Dr. Huggins. She was promised that the matter would be looked into. The result was that the certificate was returned to her as above stated. She evidently became dissatisfied because no payments were made to her and decided to cease her efforts to keep any of the policies in force. Her income while sick, so far as the record discloses, was only $1.50 per week. It is not improbable that scarcity of finances had its influence upon her decision. She was expecting the agents to bring money to her instead of collecting premiums from her.

A colored man by the name of J. L. Cockerham succeeded Hardy Walker as collector. He testified that when he entered upon his duties as collector,, defendant provided him with a list of insured persons who were in arrears on premium account and that plaintiff’s name was thereon; that he called at her home on September 11th and solicited payment of premiums due at that time. She refused to make any payment at all. He endeavored to impress her with the advantages to be gained by keeping the policies in force. He continued to call on plaintiff through the month of September and tried without success to induce her to make additional payments. On three of these visits Perry, the assistant manager, accompanied him. He further testified that he received a percentage of all premiums collected by him as compensation for his services, and, therefore, it was to his financial interest and advantage to collect as many premiums as possible. On each trip to see plaintiff she discussed with him her claim for sick benefits.

Perry’s testimony corroborates that given by Cockerham in all essential details. He says he also endeavored to induce plaintiff to pay the premiums. He testified that on a visit to her residence very soon after Dr. Harris’ certificate had gone in, he found plaintiff sitting in a rocking chair on her front porch fully attired. For this reason, her claim under Dr. Harris’ certificate was rejected.

It is but reasonable to assume that an insurance company’s agent, the amount of whose compensation depends upon the amount of premiums he collects, would make due effort to collect as closely as possible all premiums due by the insurer’s patrons. His subsistence depends upon premium receipts as does the company’s continued existence. There appears no good reason why the company would desire to see the policies lapse. On the contrary, abundant reason appears why it should wish to have them remain in force.

Plaintiff testified that she was confined to her bed by illness for the seven weeks following August 28, 1939. Her testimony in this respect is corroborated by her tenant. In view of the fact that she only once complied with the policy requirements by providing defendant with a completed physician’s certificate concerning the nature of her illness, this instance only will be discussed and passed on. We refer to Dr. Plarris’ certificate.

The lower court evidently found that the testimony preponderates in favor of plaintiff’s contention that for the week following the visit by Dr. Harris, she was “necessarily” confined to her bed because of the illness diagnosed by him. The record sustains this finding.

Because plaintiff was seen in a rocking chair on her front porch or was able to come to her bedroom door to briefly talk with defendant’s agents, during the week following Dr. Harris’ certificate, does not necessarily mean that she was not during that time confined to her bed within the meaning of the policy covenants. To have temporary relaxation from the monotonous occupancy of a bed for days, ofttimes a patient resorts to the comforts of the family rocker. Also, one may be confined to bed, yet able to walk about the sick room for brief intervals or answer telephone or door calls. See Newton v. National Life Insurance Co., U.S.A., 161 La. 357, 108 So. 769; Lewis v. Liberty Industrial Life Insurance Co., Inc., 185 La. 589, 170 So. 4, 107 A.L.R. 286.

Plaintiff also contends that no duty rested upon her to furnish additional certificates, in view of defendant’s action on the two sent in; that to have done so would have been vain and useless. She cites the following cases as supporting her position: Johnson v. Universal Life Insurance Co., La.App., 150 So. 438; Traylor v. Liberty Industrial Life Insurance Co., Inc., La. App., 185 So. 649; Dossey v. Life & Casualty Insurance Co., of Tennessee, La. App., 177 So. 427; Smith-Canclar v. Unity Industrial Life Insurance & Sick Benefit Association of New Orleans, La.App., 144 So. 264.

We have read these cases closely. Neither is nearly on all-fours with that at bar. The facts of each are easily differentiated from those of this case. Here, the first certificate was not finally rejected. It should have been completed and returned to defendant. Until this was done, final action could not be had on it. Plaintiff waited three weeks after Dr. Huggins’visit before procuring the services of another physician. Presumably, such services were not needed until procured. However, for this entire time she claims benefits are due her. The policy plainly provides that each certificate is good for only the ensuing week. The certificates to some extent influence the insurer’s action. To provide them is simply meeting the policy’s requirements. Without a doctor there can be no certificate, and without the certificate, no valid claim for benefits.

Section 2 of Act 310 of 1910 provides that benefit payments when once due and demandable under health and accident policies shall not be delayed more than thirty days “without just and reasonable grounds such as to put a reasonable and prudent business man on his guard.” Failure to make such payments without the named grounds exposes the insurer to payment of a penalty double the amount due and attorney’s fees “to be determined” by the court.

We do not believe the facts of this case warranted defendant in not paying plaintiff the benefit due her under Dr. Harris’ certificate. Unquestionably, she was sick to some extent for several weeks. It may be true that within the terms of the policy, she was not confined to bed for this entire period. The evidence relied upon by defendant’s agents to induce them to believe she was not confined to bed, was insufficient to constitute the “just and reasonable grounds” required in the statute. They should have made further investigation into her physical condition before acting so drastically against her.

All things considered, we do not think the amount of attorney’s fee excessive. The act reposes in the trial court the power to determine the quantum of fee in such cases. Of course, the legal discretion he is required to exercise in arriving at the amount of the fee must not be abused. It was not in this instance. The trial judge is in the best position to correctly fix the fee. He knows best the quality and quantity of labor put forth by counsel in the prosecution of the insured’s action.

Defendant’s counsel argues that the fee should not exceed the amount of the judgment recovered. This position is not sound. If such a standard should be fixed, it would be impossible for claimants of small amounts in cases of this character to procure the services of counsel to enforce such claims. The insurer would be we'll protected against payment of small claims for lack of judicial prosecution thereof.

The judgment appealed from is correct. It is affirmed with costs.


author: JANVIER, Judge.

text:
    STATE ex rel. CABRAL v. STRUDWICK FUNERAL HOME, Inc., et al.
    No. 17575.
    Court of Appeal of Louisiana. Orleans.
    Dec. 1, 1941.
    Rayl & Loeb, of New Orleans, for defendant-appellant.
    Harry Herman, of New Orleans, for relator-appellee.
   JANVIER, Judge.

The relator, Harry R. Cabral, brings this mandamus suit for the purpose of compelling the Strudwick Funeral Home, Inc., a corporation, and its president, Fate Strud-wick, to transfer to Cabral eight shares of the capital stock of the corporation standing on its books in the name of William Wallace, and represented by Certificate No. 5, dated September S, 1934. Cabral alleges that the name of the corporation when the stock was issued was Pace-Strudwiclc Funeral Home, Inc.; that the said name was later changed to Strudwick Funeral Home, Inc.; that the stock in reality belongs to him, but that the certificate representing it was issued in the name of Wallace for convenience; that the said Wallace duly endorsed the certificate and that it has always remained in Cabral’s possession, and that the corporation and its president refused to make the transfer when requested to do so.

The respondent corporation and Strud-wick answered admitting that a certificate of stock for five shares was outstanding in the name of William Wallace, but denying all of the other allegations of the petition, and especially denying “that the certificate was endorsed by William Wallace.” Both defendants admitted refusal to transfer the stock to Cabral.

The corporation, in addition to denying the genuineness of the endorsement of Wallace on the stock certificate, set up two other alternative defenses — one of estoppel, and in the other asserting that because of a by-law provision of the corporation, no stock certificate might be transferred until it had “first been offered to the corporation.”

When the matter was on trial, Pauline Guss, widow of William Wallace, and Willie Joseph Wallace and William Wallace, Jr., appeared through an attorney and filed a written petition in which they alleged themselves to be the owners of the stock as the heirs of William Wallace and in which they prayed that the trial be delayed “for a period of no less than ten days to permit the interests of intervenors to be properly protected by the filing of proper intervention in these proceedings.”

This delay was refused by the judge a quo by the following order “The judge refuses to permit the filing of this intervention at this late date for the purpose of delaying the trial of this cause.”

There was judgment recognizing Cabral as the owner of the stock, ordering the corporation to transfer it to him, and ordering that any sale thereof by Cabral “be restricted according to Article 7 of the bylaws of this corporation * * Respondent corporation has appealed.

The record shows that there is not the slightest shadow of truth in the thinly veiled charge of the respondents that the endorsement on the stock certificate is a forgery. Cabral, as attorney, arranged the incorporation of the company and, when asked by the president what his fee would be, stated $200. The president, according to his own testimony, agreed that instead of paying this fee in cash, a certificate of stock would be issued for eight shares, but he suggested that “This company is a negro corporation and issuing a white man stock * * * will hurt the business.”

Strudwick further said that Cabral had then said: “Well, I have a chauffeur called William Wallace. I will give it to him and anytime that the stock will be voted, William Wallace will vote with me.”

For what conceivable reason would Cabral have actually donated eight shares of stock worth $200 to his negro chauffeur? What Cabral meant was that he would place the stock in the name of Wallace, but would himself retain ownership of it. Surely later on Wallace did not acquire it by purchase. It is shown that he was chauffeur, yard boy and butler for Cabral, and that he had no financial ability to buy stock. Mr. Cabral says that on the day after he received the certificate, Wallace endorsed it in his presence, and that he, Cabral, has had it ever since. Mr. Cabral’s secretary, Miss Soledel Mulhall Hebert, testifies that she witnessed the endorsement of Wallace on the stock certificate, and is certain that it was written in her presence. As against this positive testimony of the genuineness of Wallace’s endorsement, we find nothing which can be characterized as evidence that the signature was not genuine. No handwriting expert was introduced, though the record shows that counsel for respondents requested, and were granted, a delay in order that' such an expert might be consulted and employed. Respondents rely exclusively on a comparison of certain other signatures of Wallace with the one whieh they challenge. They asked the trial court and they ask us to hold that from such comparisons it will appear that the endorsement is not genuine. We see no remarkable dissimilarity among the various signatures; certainly none sufficient to cast suspicion upon the signature which is involved, and as to the genuineness of which we find not only positive testimony but also many corroborating circumstances. The record shows that such dividends as were paid by the corporation, Cabral received and that he attended stockholders’ meetings regularly. Respondents point to one dividend check which was made payable to Harry R. Cabral, attorney, and they contend that this evidences the fact that Cabral did not own the stock but held it as attorney for someone else. Cabral explains that the word “attorney” was placed after his name not to show that he represented someone else but merely as identifying him as an attorney.

It is quite evident that in this instance the placing of the word “attorney” after the name of the payee had no significance.

We have already dignified this unwarranted charge far beyond its just desserts and shall not by a more prolonged discussion, give ground for the belief that there appears anything whatever in it. The bylaw provision reads as follows: “No stock of this corporation may be sold by any stock holder at any time, without first offering for sale said stock to the stockholders of the corporation; this offer to be made in writing by the stockholder who desires to sell this stock to the secretary of the corporation, who shall notify each stockholder of the offer to sell. If no stockholder accepts to purchase the stock within the thirty day period from the date that the offer was made to sell same, the stockholder may place his stock for sale on the open market.”

But that provision cannot be interpreted as preventing the placing in Cabral’s name of stock, which not only already belongs to him but which was given to him by the corporation itself in payment of services rendered in connection with its own creation. It may prevent the sale by Cabral unless he first shall comply with its provisions, but it cannot prevent the transfer to the true owner of stock already issued under the circumstances set forth.

The judgment appealed from is affirmed, at the cost of appellant.

Judgment affirmed.


text:
    TEXAS & N. O. R. CO. v. MILLER & CO., Inc.
    No. 17000.
    Court of Appeal of Louisiana. Orleans.
    Dec. 1, 1941.

      Denegre, Leovy & Chaffe, Lloyd A. Ray, and John W. Sims, all of New Orleans, for plaintiff.
    Samuel I. Rosenberg and Titche & Tit-che, all of New Orleans, for defendants and plaintiffs in warranty.
    Henican, Carriere & Cleveland, of New Orleans, for warrantors.
   JANVIER, Judge.

The Texas & New Orleans Railroad Company sues Miller & Company, Incorporated, for the balance of freight charges alleged to be due on two shipments as follows:

(1) eight bales of compressed cotton marked Arah, which under bill of lading dated September 20th, 1932, was transported to East Orange, N. J., consigned to Miller & Company, Incorporated; and

(2) one hundred bales of compressed cotton marked Arik, which under bill of lading dated October 5th, 1932, was transported to Little Falls, N. Y., consigned to Miller & Company, Incorporated.

The carrier avers that the shipments were transported to their respective destinations; that the correct freight charge on the shipment of 8 bales was $25.19, whereas only $13.89 was collected; that the correct charge on the 100 bales was $295.86, whereas only $151.79 was collected, and that therefore on the two shipments there is a balance due of $155.38. (It is obvious that an error of has been made, and that the amount prayed for should have been, $155.-37).

J. J. Miller, individually, appeared and made answer, averring that the corporation, Miller & Company, Incorporated, which had been responsible for the two shipments, had been dissolved, and that he, J. J. Miller, had assumed all liability of the said corporation to which he has succeeded. He admitted that the two shipments had been made as alleged, and that the amount set forth as having been paid, had been paid, but he denied that the freight charges had been improperly figured, declaring that he had no knowledge as to the correct respective rates, and calling upon the carrier for strict proof of such rates.

Miller averred that the 8 bales of cotton had been bought by the Miller corporation from Manget Brothers, a partnership, under a contract by which the said Manget Brothers assumed responsibility for all freight charges required for the transportation of that cotton to East Orange, N. J., and, averring that he had succeeded to all of the assets of the said Miller Company, and calling upon the said partnership in warranty, Miller prayed for judgment in such amount as he might be condemned to pay to the carrier.

As to the shipment of 100 bales, Miller averred that this cotton likewise had been purchased from Manget Bros. We now quote from Miller’s answer:

“That by an oral understanding with Manget Bros, your respondent was to be entitled to inbound freight bills. That these freight bills would have permitted respondent to ship his cotton to their points of destination at a through rate, and that had such a through rate existed, the amounts which respondent paid, as alleged in the petition, would have been the full and complete payment to the carrier.”

Miller further averred:

“That as now appears from the petition filed herein, the said through rate is not available, and that because thereof the cotton must move under a local rate, and that the difference between the through rate and the local rate amounts to $155.38, which is the amount demanded of respondent in the petition”, and Miller further alleged: * * * “that he purchased the cotton above referred to under Manget Bros.’ guaranty and warranty that the cotton would move under a through rate, the said Manget Bros, to furnish your respondent with good inbound freight bills.”, and * * * “that should the plaintiff prevail in this suit, then and in that event the said Manget Bros, should be condemned to pay to your respondent any sum of money which your respondent may be condemned to pay to the plaintiff herein, as respondent had a contract with Manget Bros, guaranteeing to respondent that the cotton referred to in the petition filed herein would move under a through rate.”

Manget Brothers now admit that they sold the 8 bales of cotton to the Miller Company, all freight charges to final destination to be paid by them, and they concede that if the carrier is correct as to the rate on this shipment, then they are responsible to the Miller Company for such additional sum as it, the said Company, may be responsible for but they do not admit the correctness of the rate, nor that Miller, individually, may claim from them even though they may be obligated to the Miller Company.

As to the other cotton, the 100 bale shipment, Manget Brothers deny that the rate contended for by the carrier is correct, and concerning the call in warranty, they deny that they sold that cotton to the Miller Company and they deny any liability to the Miller Company or to Miller under any alleged guarantee, or because of any oral contract to furnish paid freight bills as alleged by Miller.

There was judgment as prayed for in favor of plaintiff against Miller, and there was also judgment on the call in warranty in favor of Miller and against Manget Brothers.

Miller has not appealed.

Manget Brothers have appealed from that part of the judgment which runs against them as warrantors. By this appeal they have kept alive their right to contend, not only that they should not be held as war-rantors, but also that, although as between the plaintiff carrier and Miller, the principal judgment is final, as between themselves and Miller the principal judgment is erroneous. Where, as here, there is a judgment against the main or original defendant, and also in favor of that defendant and against a war-rantor, there are in effect two judgments, and unless both are correct, the judgment in warranty is incorrect. The warrantor, therefore, as between himself and the principal defendant, may be heard to question the correctness of both parts of the judgment.

By his appeal, a warrantor may not reverse the principal judgment, but he may, by showing on his appeal that there should have been no judgment against the defendant, obtain a reversal of the judgment in warranty. This, of course, is not true where a warrantor, called upon by the principal defendant to defend the principal suit, undertakes that defense, for there the war-rantor, having undertaken to defend for the principal defendant must appeal from the judgment on the main demand, or be foreclosed by it. Code of Practice art. 384; Anderson v. Cade, 10 La. 269. For a discussion of the effect of an appeal by a war-rantor from the judgment in warranty alone, see Southern Development Co. v. Dubroca, 109 La. 990, 34 So. 50. Manget Brothers then, by their appeal from the judgment in warranty, have kept alive their right to contend that there should have been no judgment against Miller, and have kept alive also their right to contend that even if the judgment against Miller is correct, still the judgment in warranty is erroneous. We therefore first investigate the evidence concerning rates, because unless the rates contended for by the carrier are correct, the judgment in warranty against Manget Brothers must be reversed however final the judgment against Miller, by his failure to appeal, may have become.

The carrier elicited from Mr. Gooch, the Chief Rate Clerk, testimony to the effect that the charges contended for by it were correct, and there was no testimony in contradiction. It appears, however, that this testimony was based on an expert witness’s examination of published tariffs issued by the carrier and approved by the Interstate Commerce Commission, and not on his own independent knowledge of these rates. We think that no objection could be made to this evidence on this court. It is evident that no tariff or rate expert can testify to such matters as rates, except upon consultation of approved and published tariffs, and it was for this reason that the Congress included in the Interstate Commerce Act the provision that tariffs approved by and filed with the Interstate Commerce Commission should be received as prima facie evidence. 49 U.S.C.A. sec. 16, par. (13). Counsel, however, in oral argument, and in brief, have pointed out that the said traffic expert and rate clerk did not testify that the tariffs which were referred to were the ones which were in effect when the shipments were made, and it is true that there is nothing in the record to show that they were. Counsel argue that this is a fatal omission and that without proof that the tariffs introduced were effective on the dates of the respective shipments, there is no proof as to the correctness of the rates sued for. However, we do not find that any objection was made on that point, and it appears very obvious that the failure to state that the tariffs used were the ones in force when the shipments were made, resulted from oversight since the witness was placed on the stand for the very purpose of identifying those tariffs as the ones which were effective at those times.

The witness was questioned concerning the shipment of 8 bales to East Orange, N. J., and concerning the shipment of 100 bales to Little Falls, N. Y., and he consulted these tariffs, one of which had become effective on October 6th, 1931, and the other of which had become effective on February 19th, 1932. He then testified that the rates contended for by the carrier were correct. It is plain that his failure to add that those tariffs issued prior to the making of those shipments had remained in effect until the shipments had been made, resulted from oversight alone, and that it would work an unnecessary delay to remand the matter for that proof. Furthermore, we think that the introduction of those tariffs showing that they had become effective prior to the dates on which these shipments were made, raises the presumption that they were still in effect and placed upon the defendants the burden of.showing that those tariffs had expired or had been cancelled.

Therefore the rates sued for were, we think, shown to be correct by the applicable tariffs from which the witness testified. Since Manget Brothers now admit that they sold the 8 bale shipment to the Miller Company, and agreed to be responsible for the freight charges to East Orange, N. J., they would have been responsible to the Miller Company for such amount as that company might have had to' pay to the carrier had that Company been the plaintiff in warranty. Therefore, as to that shipment, the only remaining question is whether Miller, individually, may assert the right which the Miller Company could have asserted against Manget Brothers had the Company continued to function.

We see no force in the contention that whatever may have been the obligation of Manget Brothers in favor of the Miller Company, there is no such obligation in favor of Miller, individually. Miller testified that he has “succeeded” to Miller & Company; that he is “conducting” the business which was formerly conducted by the corporation, and that he has “assumed all of the debts of the corporation.” And there was introduced in evidence a certified copy of a notarial act of sale by which Miller, on October 31st, 1935, bought all of the assets of Miller & 'Company, Incorporated. We conclude that so far as the undercharge on the 8 bale shipment is concerned, Manget Brothers were properly held liable in warranty to Miller.

We find most complicated the facts on which Miller bases his contention that Manget Brothers are responsible for the balance of freight charges, if any such balance is due on the 100 bale shipment to Little Falls, N. Y., and it is very obvious that Miller’s charge that this cotton had been sold to the Miller Company by Manget Brothers is not correct as was conceded during the trial. It is shown that several weeks before the Miller Company caused the 100 bales to be shipped, that company bought from Man-get Brothers 230 bales of cotton, and that the 100 bale shipment involved here was not a part of that 230 bale purchase, and was not bought from Manget Brothers at all, but from Jovite Cau and Company, an entirely different concern. Miller admitted this at the trial, and in doing so altered entirely the theory on which -was based his claim in warranty against Manget Brothers, for whereas, in his call in warranty he charged that he had purchased the cotton from Manget Brothers and on Manget Brothers’ “guarantee and warranty that the cotton would move under a through rate” he now claims that though Manget Brothers did not sell him that cotton, they had, in connection with the previous sale of 230 bales, orally agreed to furnish him with certain freight receipts which he, or rather the Miller Company, might use to obtain a through rate on the 100 bales later bought from Jovite Cau and Company.

It is shown that at that time the carriers had established and were permitting a “transit” or concentration privilege under which cotton buyers at concentration points might use the freight receipts already received on cotton which had moved from interior points to concentration points in obtaining a lower through rate on cotton shipped from the concentration points to mill cities or other points to which the cotton might be ultimately transported. This privilege, as the record shows, was availed of in the following manner: Let us assume that Manget Brothers in New Orleans has purchased cotton from a local point in Texas, and has paid the freight charges from that local point to New Orleans, and later has sold that cotton to a mill in New York, under an agreement obligating Manget Brothers to pay the freight charges from New Orleans to New York. In most instances there is a lower through rate than the rate which results from totalling the local rates which would be involved. In other words the rate from the interior Texas point direct to New York is usually lower than the sum of the two rates, one from the Texas point of origin to New Orleans, and the other from New Orleans to destination.

Under the transit or concentration privilege, Manget Brothers in shipping the cotton to New York, by presenting the freight receipts showing that they had paid the freight charges from the Texas points, might obtain the through rate from the Texas point to New York and then, on the freight charge based on that through rate, obtain credit for the amount paid on the first movement from Texas to New Orleans.

The record further shows that this transit or concentration privilege permitted the substitution of cotton and that therefore a cotton merchant or concentrator in New Orleans might, in making the second shipment out of New Orleans, substitute cotton other than that covered by the inbound freight receipts. The record also indicates without definitely showing it, that, in order to take advantage of this right to substitute, the shipper must substitute for the original cotton, other cotton which has come into the concentration point from the same interior point of origin.

We have described this transit privilege as the record shows that it operated between the cotton merchants in concentration points and the carriers. Now let us see the effect of it as among cotton merchants. Because of this transit privilege, cotton merchants in New Orleans retain inbound freight receipts, and when they sell cotton to other merchants, as the result of another well established trade custom in the cotton business, furnish with each bale sold a freight receipt, showing payment of inbound freight on a bale of cotton, not necessarily the same bale, from point of origin to New Orleans, so that should the purchaser ship this bale out of New Orleans, he may, if the said freight receipt proves to be usable in connection with the bale shipped out, obtain a lower rate than he would otherwise have to pay.

Now let us revert to the facts of this case. When Manget Brothers sold 230 bales to the Miller Company several weeks before the 100 bales were purchased by the Miller Company from Jovite Cau and Company, Manget Brothers, as a result of the trade custom, became obligated to furnish to the Miller Company freight receipts showing payment of the inbound freight charges on 230 bales of cotton-from point of origin to New Orleans. Apparently the Miller Company at that time had no need for those receipts. So it was verbally agreed that the Miller Company would be entitled to demand of Manget Brothers 230 receipts whenever in the future it might decide to use them. When it bought the 100 bales from Jovite Cau and Company, and sold them to a purchaser in Little Falls, N. Y., under an agreement obligating it, the Miller Company, for the freight charges from New Orleans, it requested Manget Brothers to furnish inbound freight receipts covering 100 bales, and, of course, Man get Brothers did not know what cotton the Miller Company intended to ship. The record leaves no room for doubt, even Miller admitting it, that when a merchant in New Orleans sells cotton to another, the custom which we have described does not require that the freight receipts delivered therewith should be usable in connection with any particular cotton, all that is required being that the receipts furnished be usable if the transferee should possess and should desire to ship cotton which originated at the point from which the cotton shown on those receipts came. This feature of the custom appears to us to be rather strange, but that it was a part of the custom is shown by the record and is plainly indicated-by the testimony of Miller, himself.

It is indicated by the record that in order that the transit privilege be availed of, the shipper of the outbound cotton must be the consignee who paid the freight on the inbound movement. Apparently because of this requirement, when the Miller Company decided to ship to Little Falls, N. Y., the 100 bales purchased from Jovite Cau and Company, it requested Manget Brothers to produce 100 of the 230 freight credits due under the sale of 230 bales, and also requested Manget Brothers to ship the 100 bales in their name. Manget Brothers agreed to do this and allocated to the Miller Company 100 freight receipts which it had obtained in connection with 100 bales of cotton which had come to New Orleans from Texas'City, Texas. The shipment was made to Little Falls, N. Y., the .through rate was paid and all seemed serene until several years later when the carrier demanded the additional amount claimed in this suit, declaring that the 100 bales had not originated at Texas City, Texas, but at Oklahoma interior points; and that therefore since the freight credits covered cotton which had moved from Texas City to New Orleans, the through rate had been improperly allowed on the cotton from New Orleans to Little Falls, which had originated in Oklahoma.

Again reverting to the question of whether the carrier is correct in refusing to allow the through rate on this 100 bale shipment, we note that counsel for Manget Brothers maintain that the carrier is wrong in refusing the through rate on the ground that the tariffs do not show a through rate from Oklahoma points to New York. Counsel contend that the rate experts show that there was such a through rate shown in the tariffs. We cannot tell from the record whether the undercharge resulted from the fact that there was not in effect a through rate from Oklahoma points to Little Falls, N. Y., or from the fact that substitution under the transit privilege is limited to cotton from the same point of origin. If either was the reason then the carrier seems to be correct in demanding the additional amount because we are of the opinion that the evidence shows first that if substitution is to be made, the substituted cotton must have originated at the point from which the original cotton came, and also that the record shows that there was no through rate from Oklahoma points to New York. Counsel’s belief that the record shows that there was a through rate from Oklahoma points to New York seems to result from the fact that the rate expert did, it is true, refer to a through rate between these points, but he explained that that through rate was arrived at by summing up the local rates.

Thus the controversy between Miller and Manget Brothers is limited to a very narrow question, Was Manget Brothers obligated to deliver to the Miller Company 100 freight receipts which might be used against the particular 100 bale shipment which the Miller Company desired to make, or was the full obligation of Manget Brothers complied with when it delivered freight receipts which had value if the Miller Company could find for shipment cotton with which those receipts might be used?

That the custom did not require that the receipts be good in connection with any cotton which the Miller Company might select is very evident, and as we have said Miller, himself admits this. Note his testimony on this point:

“Q. And the practice was to deliver freight bills where inland cotton was purchased, was it not? A. Yes, expense bills.
“Q. And the particular expense bills ordinarily were left entirely to the vendor, were they not? A. Well, it could be that way.
“Q. Don’t you know that was the practice? A. No. I don’t know that.
“Q. Don’t you know that the seller ordinarily delivered the least available expense bills that he had in the files? A. Sometimes, that’s correct.
“Q. And that was the practice, was it not? A. I wouldn’t say that, but it has happened.
“Q. And that is recognized as being permissible in the trade? A. Well, yes, I imagine it is permissible.
“Q. So that being the fact, a seller had the right to take any expense bills he had in his file and deliver them to the purchaser in satisfaction of what you say was the custom of delivering expense bills? A. They are supposed to deliver good expense bills that have some value, but what the value is, that is determined by the final movement of the cotton.
“Q. In other words, they didn’t guarantee that you could use these particular bills in connection with a movement to East Orange when they delivered these bills to you in connection with the sale of the 230 bales, did they? A. They guaranteed me expense bills that were good. As it turned out, they were no good and weren’t usable anywhere.”

Miller’s statement that the particular expense bills which Manget Brothers furnished “were no good and weren’t usable anywhere” is shown to have been incorrect. The record convinces us that those bills had value and could have been used had Miller, or rather the Miller Company, desired to ship ‘out of New Orleans cotton which had originated at Texas City, Texas. Furthermore, when counsel for Man-get Brothers endeavored to -show that these bills had value, in connection with this particular cotton, to the extent of drayage charges at each, that evidence was excluded, the trial judge being of the opinion that Manget Brothers had warranted that those particular bills were usable as part payment of the through freight rate on that particular cotton. This ruling was incorrect since, as we have shown, the only warranty which resulted from the custom did not go so far as to include an agreement that those bills would be usable under all circumstances and in connection with any cotton regardless of its origin.

The only remaining point sought to be made by Miller is that in addition to the verbal warranty resulting from the trade custom, there was here a written guarantee given by Manget Brothers that these expense bills might be used in connection with this particular cotton. This point is founded on a document prepared and executed by Manget Brothers and tendered to the carrier in connection with the shipment of the 100 bales from New Orleans to Little Falls. This document, addressed to the carrier, listed 100 bales of cotton which had come to New Orleans from Texas City, Texas, and stated that the freight receipts shown were usable in connection with the shipments of the cotton to Little Falls, N. Y., and at first reading it appears to bind Manget Brothers to the warranty that those freight receipts would be usable in connection with that shipment to Little Falls. But we must not overlook the substitution feature of the transit privilege. Under that feature, all parties knew that the Miller Company might substitute any other cotton which had come to New Orleans from Texas City, Texas, and so far as the record shows, Manget Brothers had no knowledge whatever that the cotton which the Miller Company desired to ship had come from Oklahoma points. As we have said, they knew nothing at all about that cotton. All that Manget Brothers guaranteed was that those freight receipts were good in connection with Texas City cotton, and they would have been good had the Miller Company shipped Texas City cotton. It did not do so, it shipped Oklahoma cotton. This was not the fault of Manget Brothers. When called on for 100 freight receipts, they produced them and that was all that the custom required them to do. So far as the 100 bale shipment is concerned, Man-get Brothers have fully complied with the warranty placed upon them by the trade custom. There is no further obligation on their part.

The judgment on the call in warranty is amended by the reduction of the amount thereof to $11.30, with legal interest from judicial demand, defendants and plaintiffs in warranty to pay the costs of appeal, Manget Brothers to pay the costs resulting from the call in warranty in the First City Court.

Judgment amended and affirmed.


author: SIMON, Judge.

text:
    PRILLEUX v. METROPOLITAN LIFE INS. CO.
    No. 17619.
    Court of Appeal of Louisiana. Orleans.
    Dec. 1, 1941.
    Rehearing Denied Dec. 15, 1941.
    Writ of Certiorari Denied Feb. 2, 1942.

      Spencer, Phelps, Dunbar & Marks, of New Orleans (Louis B. Claverie and Ash-ton Phelps, both of New Orleans, of counsel), for appellant.
    John T. Charbonnet, of New Orleans, for appellee.
   SIMON, Judge.

On April 18, 1938, Earl Prilleux applied in writing to the defendant, Metropolitan Life Insurance Company, for the issuance of an industrial insurance policy upon his life in the sum of $670. In answer to certain questions contained in the application regarding the receipt of medical treatment, he stated that he had not “been under treatment in any clinic, dispensary, hospital or asylum within the past five years”, and that he had not been under the care of any physician within three years. He further stated that he had never had any of the numerous diseases listed in the application, that he was in sound health, and that he did not have any physical or mental defect or infirmity. This application for insurance was subsequently approved by the defendant company and on May 2, 1938, it issued to Prilleux a policy of industrial life insurance providing for the payment to his wife, Jannett Prilleux, the designated beneficiary, the sum of $670 upon his death.

About four months after the issuance of the policy, oh August 23rd, 1938, Prilleux died as the result of complications growing out of a surgical operation that he had had at the United States Marine Hospital in New Orleans on October 1, 1937, some six months before applying for the issuance of the policy. It appears further that Prilleux had received medical treatment at the same hospital during the period from September 11, 1937, to October 27, 1937.

Aiter Prilleux’s death, his wife, the beneficiary designated in the policy, filed with the defendant a proof of the assured’s death and made claim upon it for payment of $670, the face value of the policy. Upon the rejection of her demand by defendant, she filed this suit to recover its proceeds.

The defendant company resists liability upon the ground that the insured Prilleux had received medical treatment within two years prior to the issuance of the policy without any reference to such treatment having been endorsed upon the policy and the policy was, therefore, voidable under its “when policy is voidable” clause. That clause reads as follows:

“When Policy is Voidable. If (1) within two years prior to the date of issue of this Policy the Insured has been a patient at, or an inmate of, any institution for the treatment of physical or mental disease, or has undergone any surgical operation, or has been attended by a physician, unless it shall be shown by the Insured or any claimant that no such institutional, surgical, or medical treatment or attention was for serious disease, injury, or physical or mental condition; or if (2) prior to such date of issue the Insured has been rejected for life insurance by this or any other insurer; then, in any such case, this Policy shall, subject to the clause entitled Incontestability, be voidable by the Company, unless reference to such institutional, surgical, or medical treatment or attention, or such prior rejection, is endorsed on this Policy by the Company. If this Policy does not take effect, or is voided by the Company, the Company will return the premiums paid.”

In accordance with the foregoing policy provisions, the defendant, Metropolitan Life Insurance Company, in its- answer, tendered and deposited in the registry of the court the premiums theretofore paid on the policy, amounting to $9.50.

After a trial in the District Court, there was judgment in plaintiff’s favor for the amount claimed, $670, and defendant has prosecuted this appeal.

Plaintiff contends that the “when policy is voidable” clause, which the defendant has invoked as a defense to this action, is tmenforcible on the ground that its provisions are in conflict with the statutory law of this state.

The statutes upon which plaintiff relies are Acts N'os. 52 of 1906 (as amended by Act No. 227 of 1916), 97 of 1908, 160 of 1934 and 144 of 1936.

The particular policy provisions at issue in this case have not been heretofore passed upon by the appellate courts of this state. Under this “when policy is voidable” clause of the policy the insurer is required to prove that the insured has received medical or surgical treatment or attention within two years prior to the date of the issuance of the policy and that no reference to this treatment was endorsed upon the policy. It then becomes incumbent upon the claimant to adduce those facts and circumstances which are peculiarly within his knowledge, or easily obtainable by him to show that the disease, injury or physical or mental condition for which treatment had been given was not of a serious nature. If such a showing is made by the claimant, then liability attaches under the policy. This slight burden is imposed upon the claimant only when the insured’s death occurs within the contestable period of one year after the date of issue of the policy and when the insured has failed to have endorsed upon the policy a reference to any such institutional, surgical or medical treatment or attention had by the insured within two years prior to the date of issuance of the policy. If the insured lives for a full year after the issuance of the policy, it cannot be contested for a health condition or for any other reasons, since the incontestability clause of this policy in question so provides. If, on the other hand, the insured dies within the contestable period of one year, the policy will be paid unless there was a serious condition or disease which had not been revealed, and in this event the premiums theretofore paid on the policy are returned by the company.

We will now consider whether the statutory laws of this State, hereinabove referred to, in any way prohibit the enforcement of the policy provisions under consideration.

The plaintiff contends that defendant insurer was presumed to have had full knowledge of the health of the insured in view of Acts No. 97 of 1908 and 144 of 1936.

In the recent case of Succession of Ryan v. Life & Casualty Insurance Company of Tennessee, 198 So. 522, 526, after an exhaustive review of the pertinent statutes, we held that Act No. 144 of 1936 superseded Act No. 97 of 1908 insofar as industrial life insurance policies are concerned and that the Act of 1936 was not applicable to an industrial policy issued upon the written application of the insured, or to an industrial policy issued after a medical examination of' the insured. We said:

“ * * * Our present view is that the language used by the Legislature indicated a clear intention on its part to make the statute [Act No. 144 of 1936] inapplicable to policies of industrial life insurance which are issued either upon a written application or a medical examination. The statute is a special one and obviously supersedes the general law (Act No. 97 of 1908) insofar as industrial life insurance policies are concerned. * * * ”

However, plaintiff contends .that the written application is not admissible in evidence in this case, and, this being so, the policy at issue must be considered as having been obtained without an application and subject, therefore, to the provisions of Act No. 144 of 1936. The basis of this contention is that the defendant, in its answer, failed to allege that there had been such a written application.

In its answer the defendant quoted in full the text of the “when policy is voidable” clause of the policy. It specially pleaded that, in view of its provisions, the policy on which plaintiff’s action was founded was void since the insured had received medical treatment at the Marine Hospital from September 11th ,to October 27th, 1937, and that plaintiff had not shown that such treatments were not for a serious disease or condition. It is plaintiff’s contention that defendant should have also averred in i,ts answer that the policy was an industrial one and that it had obtained a written application, thereby affirmatively showing that the policy was not subject to the provisions of Act No. 144 of 1936.

We do not believe that .there is any merit in this contention. Plaintiff’s cause of action is based upon an insurance contract, which shows, on its face, that it is an industrial policy. Under the provisions of Act No. 160 of 1934, the written and signed application of the insured is made. “a part of the contract of insurance issued thereon, whether or not the application or a copy thereof he attached to or indorsed upon the policy when issued.”

In Lapeyrouse v. Orleans Industrial Life, Health, Accident & Burial Benefit Insurance Co., Inc., 4 So.2d 569, decided on November 17, 1941 we said:

“When the policy [industrial life] was written the assured was not required to submit himself for a medical examination but a written and signed application was obtained from him, .though it was not attached to nor made a part of the policy. However the policy was issued since the enactment of Acts Nos. 134 and 160 of 1934, and therefore it was not controlled by Act No. 52 of 1906, as amended by Act No. 227 of 1916, and consequently, even though the application was no,t attached to nor made part of the policy, it could be relied upon to show what statements were made by the assured at the time the application was signed.
J|i * * * sji * *
“This statute [Act 160 of 1934] effected a significant change in the law concerning the proof of misrepresentation by an applicant for industrial insurance because prior to its enactment, Act No. 52 of 1906 prevented an insurer, desiring to rely upon the defense of misrepresentation, from pointing to statements contained in an application unless the application should have been attached to and made a part of the policy.”

It was therefore unnecessary, in order to introduce the application in evidence, for defendant to allege that the policy was an industrial policy and that a written application had been obtained.

Since there was a written application, signed by the insured, Act No. 144 of 1936 is inapplicable. Nor has Act No. 97 of 1908 any application here since this is a policy of industrial insurance. See Succession of Ryan v. Life & Casualty Insurance Company of Tennessee, supra.

Consequently, the provisions contained in the “when policy is voidable” clause cannot be said to be in any way violative of either statute. Nor are the provisions contained in that clause in violation of Act No. 52 of 1906. The policy was issued after the enactment of Act No. 160 of 1934, and, as we have pointed out in the Lapeyrouse case, supra, such a policy is not controlled by Act No. 52 of 1906.

At this point it should be noted that we are aware of the fact that Act No. 144 of 1936, was amended by Act No. 140 of 1938. This amendment provides .that, after one year from date of issuance, industrial life insurance policies are incontestable save and except for non-payment of premiums. The policy under-’ consideration contains a similar incontestable clause. The latter amending statute has no application to the instant case since the policy was issued before the effective date of the amendment. Geddes & Moss Undertaking & Embalming Company v. First National Life Insurance Company, La.App., 177 So. 818; Manuel v. Peoples Industrial Life Insurance Company, La.App., 189 So. 311; Williams v. Peoples Industrial Life Insurance Company of Louisiana, La.App., 191 So. 331. The incontestable clause of the policy is likewise inapplicable since the insured died four months after its dafe of issuance.

Plaintiff further contends that, “under Act No. 160 of 1934, no policy of industrial life insurance shall be void unless the insured wilfully conceals facts as to his ill health” and that “the clause, therefore, is also in conflict with Act No. 160 of 1934 which requires an allegation and proof of fraud to avoid a policy of industrial life insurance”.

We believe that in this contention plaintiff is in error. Act-No. 160 of 1934 simply provides that, if an insurance company seeks to avoid liability under its policy on the basis of misrepresentations made by the assured in the application, the company must show that such misrepresentations were (a) wilful on the part of the assured and (b) concealed facts as to the ill health of the assured at the time of the application. See Succession of Ryan v. Life & Casualty Insurance Co. of Tennessee, supra. In the instant case the defendant is not in any way attempting to avoid liability under the policy on the basis of misrepresentations made by the insured in his application. The defendant undoubtedly had the right to show that statements made by the insured in his application were wilful misrepresentations and concealed facts as to his ill health. However, defendant has not elected to urge this defense or take advantage of the rights granted by Act No. 160 of 1934. The fact that it may have had other defenses of which it might have taken advantage, does not render any less enforcible its policy provisions under consideration in the case. Defendant is not seeking to avoid liability here on the ground of misrepresentation. Therefore, Act No. 160 of 1934 is inapplicable and, being inapplicable, it offers no reason whatsoever why the provisions of the “when policy is voidable” clause should not be enforced.

Plaintiff also contends that, because of the cases of Knowles v. Dixie Fire Insurance Company, 177 La. 941, 149 So. S28, Brough v. Presidential Fire & Marine Insurance Company, 189 La. 880, 181 So. 432, and Silver v. National Life & Accident Insurance Company, 6 La.App. 95, the policy provisions in question are unenforcible. A reading of the cited cases will disclose that they are completely inapplicable to the issues now before this court.

The Knowles and Brough cases, supra, involved policies of fire insurance and were decided under the provisions of Act No. 222 of 1928. That statute expressly provides that no policy of fire insurance should be declared void by the insurer because of the breach of any condition contained in the policy unless it be shown by the insurer that the breach of that condition “would increase either the moral or physical hazard”. The defendants in those cases sought to void the policies because of the violation of certain conditions contained therein. However, in each case the defendant failed to show and prove that the breach of the conditions had increased the moral or physical hazard as required by Act No. 222 of 1928. The conditions of the policy relied upon in those cases were the very conditions referred to in the statute, and those conditions were clearly subject to the provisions of the statute. Therefore, in order for the insurer, under the very terms of the statute (Act No. 222 of 1928) to take advantage of .those conditions, it was incumbent upon the insurer to show that the breach of those conditions had, in fact, increased the moral or physical hazard. Having failed to show ány increase in the physical or moral hazard, the insured failed to bear the burden imposed upon it by the statute, and accordingly .the assureds in those cases were permitted to recover on the policies.

The policy provisions under consideration here are not in any way referred to, qualified or limited by the terms of Act No. 160 of 1934. Therefore, the reasoning of the Supreme Court and the principles in the Knowles and Brough cases have no application upon .the issue now before this court.

In the case of Silver v. National Life & Accident Insurance Company, supra, the policy contained a provision to the effect that “no obligation is assumed by the company prior to the date thereof, nor unless on said date the insured is alive and in sound health.” The insurer had required no medical examination of the insured and therefore Act No. 97 of 1908 was applicable. Under the terms of that act, the insurance company, in the absence of a medical examination, was charged with knowledge of the previous condition of the insured’s health and was presumed to have waived the right to claim any forfeiture on that ground. This court held, therefore, that the enforcement of the policy provisions would have had the effect of relieving the company of the waiver with which it was charged by the statute and that the policy provision was therefore violative of Act No. 97 of 1908. The principles announced in that case are wholly inapplicable to the present case for the reason that Act No. 97 of 1908, as we have pointed out in the Ryan case, supra, has been superseded by Act No. 144 of 1936 insofar as industrial policies are concerned. Hence the Silver case is not in point.

It is seen, therefore, that there is no prohibitory law in this state to preclude the enforcement of the provisions of the “when policy is voidable”, clause of the policy under consideration. Further, we cannot conceive of any theory upon which it could reasonably be held that the enforcement of the provisions of the clause would be in contravention of any public policy of this state. The clause is simple, specific and definite. It is a reasonable contractual reservation of a right to avoid the policy within a reasonable time after its issuance in either of two events contained in the clause (which events are themselves reasonable), conditioned on the existence and affirmative proof of such fact or facts by the insurer. Accordingly, we believe that the clause in question is enforcible.

In Muse v. Metropolitan Life Insurance Company, 193 La. 605, 192 So. 72, 75, 125 A.L.R. 1075, the Supreme Court quoted with approval the following from Ruling Case Law:

“In the absence of statutory provisions to the contrary, insurance companies have the same right as individuals to limit their liability, and to impose whatever conditions they please upon their obligations not inconsistent with .public policy; and the courts have no right to add anything to their contracts, or to take anything from them.” 14 Ruling Case Law, pp. 929, 930.

As we havfi previously pointed out, this “when policy is voidable” clause has never been construed by an appellate court in this state. However, this clause has been previously upheld by a district judge of this state. (See reasons for judgment of Judge Harold A. Moise of Division “C” of the Civil District Court for the Parish of Orleans in the case of Sarah Merrisield, Widow of Joseph Navarro Garza, v. Metropolitan Life Insurance Co., No. 236,761 of the docket of that court).

Further, it is to be noted that the clause in question has been passed upon by the higher courts of several of our sister states, and in each case the provisions of the clause have been held enforcible. See Baum v. Metropolitan Life Insurance Company, 144 Pa.Super. 37, 19 A.2d 486; Davis v. Metropolitan Life Insurance Company, Ohio App., 31 N.E.2d 98; Brown v. Metropolitan Life Insurance Company, Mo. App., 151 S.W.2d 499; Grant v. Metropolitan Life Insurance Company, 194 S.C. 25, 9 S.E.2d 41; McDermott v. Metropolitan Life Insurance Company, Sup., 8 N.Y.S.2d 896, affirmed in 261 App.Div. 950, 27 N.Y.S. 2d 462.

Finding, as we do, that the policy provisions of the “when policy is voidable clause” are enforcible, we will now see whether the defendant has submitted proof in this case so as to make the clause applicable here. Under the provisions it was incumbent upon the defendant, Metropolitan Life Insurance Company, to show that the insured had undergone medical treatment within two years prior to the issuance of the policy, that no reference to such medical treatment had been endorsed upon the policy, and that the insured died within a year after its issuance. The defendant has shown without dispute that the insured received medical treatment and underwent a serious surgical operation at the United States Marine Hospital in the City of New Orleans within two years prior to the issuance of the policy; that no reference to this medical treatment had been indorsed on the policy, and that Prilleux died about four months after the policy was issued. Having made this showing, it then became incumbent upon the plaintiff, under the provisions of the clause in question, to show, in order to recover on the policy, that such medical treatment was not for a serious disease, or injury, or physical condition. This the plaintiff ha's completely failed to do. Accordingly, she cannot recover the face value of the policy, but is entitled only to the premiums theretofore paid. These premiums amount to $9.50. '

The only other questions involved concern the allowance of interest and the payment of costs.

As we have previously pointed out, when this suit was filed, the defendant in its answer set forth that the limit of its liability was $9.50, the amount of the premiums paid, and it deposited this amount in the registry of the court. It follows, therefore, that the defendant is liable only for all costs which had accrued prior to the date of its deposit in the registry of the court. See Code of Practice, Article 416, and Robertson v. Louisiana Industrial Life Insurance Company, La.App., 192 So. 385.

According to Article 554 of the Code of Practice and Article 1938 of the Civil Code, all debts bear interest at the rate of 5 per cent, per annum from the time they become due, unless otherwise stipulated. Under the terms of the policy in question here, the amount provided therein did not become due until the submission of proofs of loss. There is nothing in the record to show when the proofs of loss were submitted. However, it is certain that they were submitted at some time prior to the filing of this suit. Therefore, we will allow interest at the rate of 5 per cent, from the day on which this suit was filed until the day on which defendant deposited in the registry of the court the amount of $9.-50, which we have found to be due. See Dominique v. Liberty Industrial Life Insurance Company, La. App., 192 So. 110.

It is therefore ordered, adjudged and decreed that the judgment appealed from be amended by reducing the amount thereof to $9.50 and allowing 5 per cent, interest thereon from January 11, 1939, to February 27, 1939, and, as thus amended, it is affirmed. Defendant to pay all costs incurred prior to the date the amount for which it is cast was paid into the registry of the court; all other costs to be paid by the plaintiff.

Amended and affirmed.