{ "id": 8628024, "name": "STANDARD ACCIDENT INSURANCE COMPANY v. HARRISON-WRIGHT COMPANY", "name_abbreviation": "Standard Accident Insurance v. Harrison-Wright Co.", "decision_date": "1935-01-28", "docket_number": "", "first_page": "661", "last_page": "673", "citations": [ { "type": "official", "cite": "207 N.C. 661" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "153 N. C., 279", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "201 U. S., 173", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 344949 ], "opinion_index": 0, "case_paths": [ "/us/201/0173-01" ] }, { "cite": "170 N. C., 445", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8659860 ], "opinion_index": 0, "case_paths": [ "/nc/170/0445-01" ] }, { "cite": "155 U. S., 13", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3581023 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/us/155/0013-01" ] }, { "cite": "96 U. S., 258", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3382729 ], "opinion_index": 0, "case_paths": [ "/us/96/0258-01" ] }, { "cite": "184 N. C., 224", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11269841 ], "opinion_index": 0, "case_paths": [ "/nc/184/0224-01" ] }, { "cite": "118 N. C., 643", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8653737 ], "opinion_index": 0, "case_paths": [ "/nc/118/0643-01" ] }, { "cite": "79 N. C., 279", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8689369 ], "opinion_index": 0, "case_paths": [ "/nc/79/0279-01" ] }, { "cite": "204 N. C., 57", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8611223 ], "opinion_index": 0, "case_paths": [ "/nc/204/0057-01" ] }, { "cite": "113 Me., 17", "category": "reporters:state", "reporter": "Me.", "case_ids": [ 646882 ], "opinion_index": 0, "case_paths": [ "/me/113/0017-01" ] }, { "cite": "201 N. C., 445", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8626045 ], "opinion_index": 0, "case_paths": [ "/nc/201/0445-01" ] }, { "cite": "205 N. C., 43", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8626666 ], "opinion_index": 0, "case_paths": [ "/nc/205/0043-01" ] }, { "cite": "117 S. E., 790", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "185 N. C., 538", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8656716 ], "opinion_index": 0, "case_paths": [ "/nc/185/0538-01" ] }, { "cite": "154 S. E., 400", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "199 N. C., 269", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8598703 ], "opinion_index": 0, "case_paths": [ "/nc/199/0269-01" ] }, { "cite": "94 U. S., 673", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 5647156 ], "opinion_index": 0, "case_paths": [ "/us/94/0673-01" ] }, { "cite": "204 N. C., 506", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8621352 ], "opinion_index": 0, "case_paths": [ "/nc/204/0506-01" ] }, { "cite": "177 N. C., 327", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8654426 ], "opinion_index": 0, "case_paths": [ "/nc/177/0327-01" ] }, { "cite": "175 N. C., 314", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8659096 ], "opinion_index": 0, "case_paths": [ "/nc/175/0314-01" ] }, { "cite": "172 N. C., 142", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11252791 ], "opinion_index": 0, "case_paths": [ "/nc/172/0142-01" ] }, { "cite": "140 N. C., 263", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "203 N. C., 108", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8600295 ], "opinion_index": 0, "case_paths": [ "/nc/203/0108-01" ] }, { "cite": "76 Mo. App., 562", "category": "reporters:state", "reporter": "Mo. App.", "case_ids": [ 1471607 ], "opinion_index": 0, "case_paths": [ "/mo-app/76/0562-01" ] }, { "cite": "55 S. W., 999", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "153 S. W., 1080", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 } ], "analysis": { "cardinality": 1143, "char_count": 33751, "ocr_confidence": 0.468, "pagerank": { "raw": 1.4534472008156223e-07, "percentile": 0.6555065565598612 }, "sha256": "3aee46ffb2c052278398703e4e81b213d0dbf0819dfac44e9bc350c2b8ab2726", "simhash": "1:834375c1885ac10e", "word_count": 5600 }, "last_updated": "2023-07-14T19:17:31.653514+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "STANDARD ACCIDENT INSURANCE COMPANY v. HARRISON-WRIGHT COMPANY." ], "opinions": [ { "text": "Clarkson, J.\nTrial by jury was waived. Tbe whole controversy was reduced to two questions: (1) Did tbe policy and/or tbe certificate cover tbe losses of tbe defendant set out in its counterclaim? (2) What was tbe amount of those losses? Tbe judge ruled as a matter of law that tbe policy and/or certificate covered tbe losses. Tbe amounts of tbe losses were fixed by an agreement of tbe parties. Judgment was entered on tbe judge\u2019s ruling and tbe agreement of parties. Tbe judgment awarded the defendant tbe difference between tbe fixed amounts of tbe defendant\u2019s losses and tbe amount of tbe premiums admittedly due from tbe defendant to tbe plaintiff.\nFrom this judgment tbe plaintiff appealed to this Court. Tbe plaintiff contended that as a matter of law neither tbe policy nor tbe certificate of liability insurance covered tbe particular losses of tbe defendant enumerated in its counterclaim. We cannot so bold.\nHarrison-Wright Company, tbe defendant, is a corporation engaged in tbe general contracting business extending over a number of states. While it was engaged in laying sewer pipes for tbe city of Greenville, S. C., certain damage was \u2019 done to property owners, and one resident of Greenville, Mrs. Goodman, claimed that she suffered personal injuries, all arising out of blasting which was done by Harrison-Wright Company in removing rock in connection with tbe sewer construction.\nTbe material part of tbe property damage certificate (Manufacturers and Contractors Form), issued by plaintiff to defendant, which is printed as follows: \u201cProperty Damage Certificate. (Manufacturers and Contractors Form.) . . . Does hereby agree, in consideration of tbe estimated advance premium shown in tbe schedule on tbe reverse side hereof, insuring agreements with tbe assured named and described in said schedule, subject to tbe conditions and agreements hereinafter provided, as respects damage to or tbe destruction of property of every description. . . . (1) To pay, within tbe limits as specified in Item 4 of said schedule, tbe loss from tbe liability imposed by law upon tbe assured for such damage to or destruction of property so caused (a) while within or upon tbe premises described in said schedule or upon tbe sidewalks or other ways immediately adjacent thereto and caused by reason of and during tbe prosecution of tbe business operations of tbe assured as described in said schedule; (b) while elsewhere if caused by reason of and during tbe prosecution of tbe business operations of tbe assured as described in said schedule and conducted at tbe premises described in said schedule, or by employees engaged as such in said operations who are required in tbe discharge of their duties to be away from said premises. For the purpose of tbis insurance \u2018business operations\u2019 shall include operations incident or appurtenant thereto.\u201d\n\u201cExclusions II. . . . (3) This certificate does not cover any loss on account of accidents due to or caused by\u201d (naming many) \u201c(i) an explosion of any character.\u201d\n\u201cSchedule referred to in property damage certificate. Item 1. Name of the assured: Harrison-Wright Company. . . . Item'3. The business operations and the premises insured under this certificate are correctly described as follows: Description of business operations to be insured: Sewer construction \u2014 all operations \u2014 excluding tunnelling, except at street crossings.\u201d (Italics ours.) . . . Item 4. The company\u2019s liability under this certificate on account of any one accident resulting in damage to or destruction of the property of one or more persons shall be the actual value of the property damaged or destroyed at the time of such damage or destruction, together with the loss of use thereof, but in no event in excess of the total sum of one thousand dollars. Countersigned at Charlotte, N. C. Horace Davis, Inc., Gen\u2019l Agent. By: Horace Davis, Authorized Agent.\u201d\nThe following is not on printed form, but typewritten: \u201cSewer coiv-struciion \u2014 all operations \u2014 excluding tunnelling, except at street crossings.\u201d It will be noted that Item 3 says: \u201cThe business operations and the premises insured under this certificate are correctly described as follows:\u201d\nIn clear language we have: \u201cThe business operations and the premises insured under this certificate are correctly described as follows: description of business operations to be insured.\u201d The following is typed: \u201cSewer construction \u2014 all operations \u2014 excluding tunnelling, except at street crossings.\u201d\nThe defendant wanted insurance to protect it in sewer construction\u2014 All operations \u2014 what is the meaning of All? \"Webster\u2019s New International Dictionary defines the word as follows: \u201cThe entire thing; everything included or concerned; the aggregate; the whole; totality.\u201d\nThen is added, \u201cexcluding tunnelling, except at street crossings.\u201d If the insured and the insurer had wanted a further exclusion, how easily there could have been added \u201can explosion of any character.\u201d The typed language correctly described the business operations for which defendant was insured.\nThe question is, whether these words, \u201csewer construction \u2014 all operations,\u201d which were inserted with the typewriter and written into the policy, were words which the parties chose as directly appropriate, or whether certain printed words in other parts of the contract were to be considered as overruling and setting at naught this clear language. We think not.\nThe court below held: \u201cThat the paper-writing offered in evidence by defendant, marked \u2018Exhibit 1/ was the contract between the parties, and that under the terms and provisions of the contract it covered damages to property by blasting, and the plaintiff would be liable to the defendant for damages, if any, caused by blasting or explosion, as well as for expenses reasonably incurred by the defendant in the settlement of such matters.\u201d\nIt was said on the argument, and appears in defendant\u2019s brief, that the policy was fourteen feet in length and the Insurance Company\u2019s Manual contains several hundred pages. We think the manual immaterial.\nG-. T. Spruce testified: \u201cIn January and February, 1932, I was superintendent of construction for Harrison-Wright Company at Greenville, S. C. We were laying sewer in the northern section, and in connection with that sewer it was necessary to' do some Masting. We dug our first sewer and did our first blasting along Ashley Avenue, on which street were located the Crisp, Talley, Burdette, and Whiteside houses. Just about the time we finished this sewer we started digging an outfall in a hollow some distance away from Ashley Avenue. As an incident to digging that sewer, it became necessary to do some blasting down in the hollow. The damages complained of by Crisp, Talley, Burdette, and Whiteside resulted from blasting done on Ashley Avenue, and the damage done to the Goodman house was done by the blasting in the hollow. It was from twelve to fifteen hundred feet from Ashley Avenue to the Goodman house across the hollow; it was approximately four.hundred feet from the place we blasted on Ashley Avenue to the place we blasted in the hollow to the Goodman house.\u201d\nThe wishes of defendant were simple. It wanted insurance to protect it in the kind of work above described. It goes to the agent of plaintiff in Charlotte, N. C., and obtains from him a policy for a year effective from 4 May, 1931. It appears that the defendant was solvent, and had considerable dealing with plaintiff. The fixing of the premium was with the company. We think 6301 of the manual was put there to guide the local agents as to rates, etc. The manual was not made a part of the contract. It starts out, \u201cGeneral Instruction.\u201d To whom ? The agents.\nIn Miller v. Missouri State Life Insurance Co. (Missouri), 153 S. W., 1080, the Court said: \u201cThe manual giving these definitions was not a part of the policy, nor was it mentioned or referred to therein; yet, if its provisions were to have the effect desired by defendant, they would have become one of the principal parts of the contract. To have had this effect, they should have been embodied in the face of the contract, or referred to therein and made a part thereof in plain, unmistakable terms. McDonald v. Insurance Co., 154 Mo. loc. cit., 628, 629, 55 S. W., 999; Ellioit v. Safety Fund Life Ins. Co., 76 Mo. App., 562; 1 Joyce on Insurance, sec. 191.\u201d\nIn 1 Couch, Cyc. of Insurance Law, part of sec. 161, it is said: \u201cObviously definitions given in an underwriter\u2019s manual, of which insured had no knowledge and which are not embodied in his policy, are not binding upon him.\u201d\n\"We think the language controlling and predominant: \u201cSewer construction \u2014 all operations \u2014 excluding tunnelling, except at street crossings.\u201d It goes without saying and it is a matter of common knowledge that in a Piedmont city like Greenville, S. C., that in \u201csewer construction \u2014 all operations,\u201d that blasting would be necessary. In the typed agreement, we think blasting was included.\nIn Kenan v. Motor Co., 203 N. C., 108 (110): \u201cThe policy uses the broad language \u2018all other employees,\u2019 etc. If the clause in question is ambiguously worded, so that there is any uncertainty as to its right interpretation, or if for any reason there is doubt in our minds concerning its true meaning, we should construe it rather against the defendant, who was its author, than against the plaintiffs, and any such doubt should be resolved in favor of the latter, giving, of course, legal effect to the intention, if it can be ascertained, although it may have been imperfectly or obscurely expressed. Walker, J., in Bray v. Insurance Co., 139 N. C., at p. 393; Allgood v. Insurance Co., 186 N. C., at pp. 420-21.\u201d Jones v. Casualty Co., 140 N. C., 263; Johnson v. Insurance Co., 172 N. C., 142; Smith v. Fire Insurance Co., 175 N. C., 314; Underwood v. Insurance Co., 177 N. C., 327.\nIn Conyard v. Insurance Co., 204 N. C., 506 (507), speaking to the subject, we find: \u201cThe rule of construction is, that when an insurance policy is reasonably susceptible of two interpretations, the one more favorable to the assured will be adopted. \u2018The policy having been prepared by the insurers, it should he construed most strongly against them.\u2019 Bank v. Insurance Co., 94 U. S., 673; Jolley v. Insurance Co., 199 N. C., 269, 154 S. E., 400; Underwood v. Insurance Co., 185 N. C., 538, 117 S. E., 790.\u201d Hallock v. Casualty Co., ante, 195.\nIt may also be noted that the\" form language, \u201can explosion of any character,\u201d may be reconciled with the typed language. In Bolich v. Insurance Co., 205 N. C., 43 (46-7), is the following: \u201cThe word \u2018explosion\u2019 is variously used, and is not one that admits of exact definition, having no fixed or definite meaning, either in ordinary speech or in the law. 25 C. J., 178. It implies, however, a sudden expansion of a liquid substance, with the result that the gas generated by the expansion escapes with violence, usually causing a loud noise. The word as used in a policy of insurance should be construed in its popular sense, as used, by ordinary men, and not in a scientific sense as used by scientific men. There was evidence at the trial of this action which tended to show that the hot water which struck the plaintiff in the face and injured his eyes was forced out of the radiator by an explosion in the automobile.\u201d\nWe think perhaps there is a distinction between the use of the words \u201can explosion of any character\u201d and blasting. In ordinary parlance, we say blasting- rock, we do not mean an explosion like the explosion of an engine.\nIn Baum v. Insurance Co., 201 N. C., 445 (448-9), is the following: \u201cIn Bouchard v. Dirigo Mut. Fire, etc., Co., 113 Me., 17, L. R. A., 1915D, 187, it is held: 'That both clauses should be construed in' the light of the entire contract, the situation and character of the property insured, and the natural and necessary uses to which it must be put by the owner, and the application of this rule of construction confirms the inference already drawn from the language of the clauses themselves. That the policy is not avoided when the use made of the prohibited articles or the general use and operation of the property is necessarily incident to the business of the insured, and therefore presumed to be recognized and impliedly permitted by the insurer.\u2019 \u201d S. c., 204 N. C., 57. Collins v. Ins. Co., 79 N. C., 279. The case of Johnston v. Niagara Fire Ins. Co., 118 N. C., 643, is distinguishable from the present case.\nIn Clark on Contracts, at page 407, it is said: \u201cWhere, as in the use of printed forms, a contract is partly printed and partly written, and there is a conflict between the printing and the writing, the latter will control.\u201d\nIn May on Insurance, Yol. 1, part sec. 177, is the following: \u201cThese written clauses, nevertheless, contain the elements of the contract, and being framed under the immediate eye of the parties, and with special reference to the exigencies of the particular contract, and to the terms agreed upon, they sometimes present a contract to which some of the printed parts of the policy are inapplicable. And as effect must be given to the acknowledged intentions of the parties, these written clauses must necessarily supersede and control such of the printed clauses as would, if enforced and literally applied, be inconsistent with them.\u201d\nThe next question: The court below held that plaintiff company was liable for expenses reasonably incurred \u2014 that is, the attorney\u2019s fees paid in the Goodman case. We see no error in this.\nThe \u201cDefendant\u2019s Exhibit No. 1,\u201d Public Liability Policy, provides: \u201cIII. To defend in the name and on behalf of the assured any suits which may at any time be brought against him on account of such injuries, including suits alleging such injuries and demanding damages therefor, although such suits, allegations, or demands are wholly groundless, false, or fraudulent. IV. To pay (a) all costs taxed against the assured in any legal proceeding defended by the company according to Insuring Agreement III above; (b) all interest accruing upon such part of any judgment rendered against the assured as is not in excess of the company\u2019s limit of liability as hereinafter expressed, and until the company has paid, tendered, or deposited in court its part of such judgment; (c) and all expenses incurred by the company for investigation, negotiation, and defense. . . . Action against company: F. No action shall lie against the company to recover upon any claim or for any loss under this policy, unless brought after the amount of such claim or loss shall have been fixed and rendered certain either by final judgment against the assured after trial of the issue or by agreement between the parties with the written consent of the company, nor in any event unless brought within two years thereafter.\u201d\nThe property damage, under Item 4, in the Property Damage Certificate, cannot be in excess of the total sum of $1,000 on account of any one accident. An action was brought against the defendant by Mrs. Goodman for both personal injuries and property damage in the same suit.\nThe plaintiff, in its brief, says: \u201cIn the case of Byrd v. Georgia Casualty Co., 184 N. C., 224, the North Carolina Court held that an insurance company was not liable for the expense incurred by the insured in defending a suit for damages not covered by the policy. If, on the other hand, the Property Damage Certificate containing the specific exclusion of loss from property damage caused by explosion covered such loss, the authorities seem to indicate that the plaintiff would be liable for money expended by the defendant on account of the defense of the property damage phase of the Goodman action. It is submitted, however, that in no event is the plaintiff responsible under the Public Liability Policy for that portion of the attorney\u2019s fees which is properly assignable to the defense of the personal-injury phase of the action brought by Mrs. Goodman.\u201d\nThe record discloses that a jury trial was waived, and it was left to the court below to determine from the correspondence between the attorneys, together with the terms of the policy, whether the insurance company is liable for these fees. In so far as this finding involves any questions of fact, they are conclusive.\nIt may be noted that before the Goodman suit was commenced in South Carolina, Harrison-Wright Company had called upon the insurance company to take charge of all claims preferred against the contractors for personal injury and property damage alleged to have been caused by the blasting made necessary in the excavations for sewer. The insurance company caused its adjuster, Eden, to write the letter which is set forth in the pleadings and which denies all liability either for personal injury or property damage upon tbe ground that neither comes within the purview of the contract; and the insurance company declined to investigate these claims, or have anything to do with the matter.\nIt is alleged in paragraph 8 of the answer and counterclaim of defendant that certain damage was done by blasting, to several property owners, and that Harrison-Wright Company called upon the insurance company to take charge of these claims, but that it \u201crefused to assume any liability or to take any part in any settling or otherwise disposing of the claims made by the property owners.\u201d\nIt is further alleged in respect to the Goodman suit that the refusal of the insurance company to take charge of this ease made it necessary for the insured to employ a firm of lawyers in Greenville, S. C., and its local counsel in Charlotte, N. 0., to represent it in that suit, and in the fourteenth paragraph of the insurance company\u2019s answer to the amended counterclaim it is admitted that after this refusal of the insurance company to employ attorneys \u201cit became necessary for the defendant to defend the said action, and that for this purpose it employed as its counsel Hicks & Johnston, of Greenville, S. C., and Tillett, Tillett & Kennedy, of Charlotte, N. C., to represent it in said action, and to do all things necessary and proper to be done to defeat a recovery on the part of the said Mrs. Goodman.\u201d\nIn regard to the correspondence, we do not think it necessary to go into detail. It appears from the correspondence that while Mr. Hayden, general counsel, had, in his first letter, notified counsel for Harrison-Wright Company, and had notified Harrison-Wright Company itself, that the company would withdraw any denial of liability for the personal injury alleged to have been suffered by Mrs. Goodman, yet when counsel'for Harrison-Wright Company declined to allow counsel for the insurance company to have complete control of the case, then the insurance company, through the local attorney, notified Harrison-Wright Company that the insurance company would not be responsible for any judgment rendered in the case \u2014 that is, would not only disclaim liability for property damage, but would refuse to pay any damage that might be allowed for personal injury.\n\u2022In the correspondence, counsel for Harrison-Wright Company gave as a reason for not allowing counsel for the insurance company to have complete control of the case, because counsel, without any intention of doing any wrong, might minimize damage to the person and magnify the damage to the property; and besides, might contend that all of the injury was caused by one blast of dynamite, and thus bring the property damage within the provision of the policy that restricted the damage for one accident to $1,000. If the attorneys for the insurance company had appeared in the case and had control of it, they could not have accomplished more than the attorneys who actually appeared. These attorneys succeeded in having the jury in the Goodman ease find that there was no damage to the person of Mrs. Goodman. The damage that might be found by the jury for injury to property these attorneys did not at that time regard as of importance to the insurance company because of the fact that they claimed that the property damage was not within the provisions of the policy. Insurance company\u2019s refusal to pay and attempt to evade payment of attorney\u2019s fees in the Goodman case came too late.\nWhen the insurance company wrote the Eden letter entering a positive and unequivocal denial of any responsibility, Harrison-Wright Company were entitled to treat this as a final denial; and this right to treat the Eden letter as final is confirmed by the averment in the present answer to the effect that its offer to defend the Goodman suit was upon the express condition that it should not be liable for any judgment.\nIn Ohio and Miss. Ry. Co. v. McCarthy, 96 U. S., 258 (267-8), the Court said: \u201cWhere a party gives a reason for his conduct and decision touching anything involved in a controversy, he cannot, after litigation has begun, change his ground, and put his conduct upon another and a different consideration. He is not permitted thus to mend his hold. He is estopped from doing it by a settled principle of law.\u201d Robb v. Vos, 155 U. S., 13, 39 L. Ed., 52.\nThe defendant company, having refused to defend the Goodman suit, is liable for all the reasonable costs and expenses, including attorney fees, which the plaintiff incurred in defending the suit.\nIn Louie v. Fidelity and Casualty Co., 170 N. C., 445, it is said: \u201cThe defendant appeals because the judge rendered judgment in favor of the plaintiff receiver for costs, expenses, and attorney\u2019s fees incurred by plaintiff in defending the Marcus suit. . . . The contract makes it the duty of defendant, at its expense, Ho defend in the name and on behalf of the assured any suit brought against the assured.to enforce a claim, whether groundless or not, for damages on account of bodily injuries or death suffered, or alleged to have been suffered, through the assured\u2019s negligence, by the persons described in subsections (a) and (b) of the preceding paragraph, at the places and under the circumstances therein described, and as the result of an accident occurring while the policy is in force.\u2019 The failure of the defendant to defend the suit, after repudiating its liability to the assured, constituted a distinct breach of contract and justified the plaintiff in defending it at his own expense. Beef Co. v. Casualty Co., 201 U. S., 173. These costs and expenses constitute a primary liability of defendant that plaintiff may recover as damages for the breach of the contract. Power Co. v. Casualty Co., 153 N. C., 279.\u201d\nIn 5 Couch Cyc. of Insurance Law, at page 4108, it is said: \u201cBut an insurer cannot deny liability as against tbe insured on tbe ground tbat tbe injured employee was not covered by tbe policy and at tbe same time insist on controlling tbe defense, since its right to defend arises only by virtue of its contract.\u201d\nIn 7 Couch Cyc. of Insurance Law, sec. 1875 (e), at page 6255, it is said: \u201cIf tbe insurer refuses to defend a suit against tbe insured under tbe policy stipulations and insured is compelled to undertake tbe defense and does so, insurer is liable for tbe amount of tbe judgment and expenses incurred in conducting said defense.\u201d\nUnder plaintiff\u2019s contract witb defendant, in a matter of so grave importance to defendant, plaintiff cannot be permitted to \u201cblow bot and cold\u201d in tbe same breath. Tbe briefs in tbe case were exhaustive, well prepared, and covered every angle of tbe controversy. We have read tbe record and tbe briefs witb care. We see no error in tbe judgment of tbe court below, and it must be\nAffirmed.", "type": "majority", "author": "Clarkson, J." } ], "attorneys": [ "G. E. Cover and William T. Covington, Jr., for plaintiff.", "Tillett, Tillett & Kennedy for defendant." ], "corrections": "", "head_matter": "STANDARD ACCIDENT INSURANCE COMPANY v. HARRISON-WRIGHT COMPANY.\n(Filed 28 January, 1935.)\n1. Insurance S a \u2014 Property damage insurance in this case held to include damage to property from blasting, though policy excluded \u201cexplosions.\u201d\nInsurer\u2019s printed property damage certificate provided that insurer should pay all damage to property of third persons caused by insured in the performance of the construction work contemplated in the policy, with certain printed exceptions, one of which excepted losses due to \u201cexplosions of any character.\u201d The schedule referred to in the certificate was a printed form in which the name of insured and the business operations covered by the insurance were typewritten, the schedule providing that the business operations were correctly described as \u201csewer construction\u2014 all operations \u2014 excluding tunnelling, except at street crossings.\u201d In constructing the sewer it was necessary for insured to blast rock with dynamite, and the property of third persons was damaged by the operations : Held, the policy covered the damage to property resulting from the dynamiting, the printed exclusion in the certificate not being sufficient to nullify the clear typewritten language of the schedule which covered all operations necessary in the construction of the sewer, and which did not exclude \u201cexplosions,\u201d and the term \u201cexplosion\u201d being ambiguous and not necessarily including intentional blasting with dynamite, and it being apparent from a construction of the entire contract that the parties intended to insure against damage to property resulting from all necessary operations in the construction of the sewer.\nS. Insurance E lb\u2014\nA manual of an insurance company issued by it to guide its local agents as to rates, which is not made a part of the insurance contract, will not be considered in construing the contract as to risks covered.\n3. Same\u2014\nWhere a policy of insurance is reasonably susceptible to two constructions, the construction favorable to insured will be adopted, the insurer having chosen the language of the policy.\n4. Insurance L e \u2014 Insurer held liable under policy for fees of attorneys employed by insured to defend suit after insurer\u2019s refusal to defend.\nThe policy of property damage and personal injury insurance in this case provided that insurer would defend any suits brought against insured covered by the policy. Suit for property damage and personal injury was brought against insured by a third person, and insurer disclaimed any liability under the policy and refused to defend the suit. Insured employed attorneys to defend the suit, and thereafter insurer offered to defend the suit, but affirmed its denial of liability for the property damage feature of the case, and upon insured\u2019s refusal to allow insurer\u2019s attorneys to have complete control of the case, denied liability for either the property damage or personal injury: Held, upon a judicial determination that the suit was covered by the policy, insured is entitled to recover the reasonable costs and expenses, including attorney fees, expended by insured in defending the suit, insured being entitled to treat insurer\u2019s positive and unequivocal denial of liability for the suit as final, and insurer\u2019s later and conditional offer to defend the suit came too late, and insurer\u2019s later denial of liability confirming its original denial.\nAppeal by plaintiff from Shaw, J., at April Special Term, 1934, of Meoiclenbueg.\nAffirmed.\nThe record discloses that: \u201cUpon the call of this case for trial, and after empaneling the jury and reading the pleadings, the court suggested the first question to be determined in the case was: \u2018What was the real contract between plaintiff and defendant as to the matters in controversy in this action?\u2019 And with the consent of the attorneys^ the court directed counsel upon both sides to present to the court and jury such evidence as they had of the contract, and to present all the evidence they had hearing upon the contract and the construction thereof. The court announced to counsel that upon determining what the real contract was between the parties the court would refer the question of damages, if any, to be determined by a referee.\n\u201cAfter the introduction of evidence, counsel announced they had no more evidence to offer upon the above question, and counsel for both sides agreed that upon the evidence offered it is a question of law for the court to determine what the contract was between the parties, and whether or not, if defendant was damaged as alleged in its counterclaim, plaintiff would be liable for such damages.\n\u201cAfter hearing argument of counsel on both sides, the court holds that the paper-writing offered in evidence by defendant, marked 'Exhibit 1,\u2019 was the contract between the parties, and that undei the terms and provisions of the contract it covered damages to property by blasting, and the plaintiff would be liable to the defendant for damages, if any, caused by blasting or explosion, as well as for expenses reasonably incurred by the defendant in the settlement of such matters. To which ruling the plaintiff excepts.\n\u201cSubject to plaintiff\u2019s exceptions to the court\u2019s ruling and to the plaintiff\u2019s right to appeal, and except as stated below with reference to attorney\u2019s fees it is agreed that if the court, in making the ruling above, is correct, that under the provisions and conditions of. the policy in question the plaintiff would be liable to the defendant for damages under its counterclaim, and that such damages would be as follows:\u201d (Naming them.)\n\u201cIt is agreed that the foregoing amounts were paid by the defendants on account of the valid claims for negligence of Harrison-Wright Company in the construction of sewer lines in Greenville, S. C., as alleged in the counterclaim, said claims having been made against Harrison-Wright Company on account of property damages suffered by Crisp, Talley, Burdette, Whiteside, and Goodman in connection with the blasting operations described in the pleadings, and that the amounts paid H. C. Jones, Hicks & Johnston, and Tillett, Tillett & Kennedy were on account of expenses incurred by the defendant in connection with the settlement of the Crisp, Talley, Burdette, and Whiteside claims, and the suit brought by Goodman.\n\u201cThe foregoing recovery to be subject to a credit in favor of the plaintiff against the defendant for $723.62, with interest from 9 March, 1932. Notwithstanding anything in the stipulations and entries heretofore made and entered, the plaintiff contends that it is not liable for the payment of attorney fees incurred by the defendant in the Goodman case, and as a basis for this contention offers the following portions of letters, marked 'Plaintiff\u2019s Exhibit B.\u2019\n\u201cIt is agreed, and a jury trial being waived, the court finds as a fact that the negotiations between the plaintiff and defendant with respect to furnishing counsel to defend the Goodman suit were as shown by correspondence, which has been introduced in evidence as 'Plaintiff\u2019s Exhibit B,\u2019 and the above stipulations and agreements are made with the reservation that the plaintiff shall be entitled to contend in the Supreme Court that tbe facts being as shown by said correspondence, it is not liable to tbe defendant for tbe attorney fees paid on account of tbe Goodman suit.\u201d (Correspondence set forth.) \u201cTbe plaintiff\u2019s motion to amend tbe pleadings is allowed. Thomas J. Shaw, Judge Presiding. This 5 May, 1934.\u201d\nTbe judgment of tbe court below is as follows: \u201cThis cause came on to be beard before Thomas J. Shaw, judge presiding, and a jury, at tbe 30 April, 1934, Special Term. Proceedings were bad, stipulations and agreements were entered into, and rulings were made by tbe court, as appears upon tbe record of same which is attached to this judgment. Upon tbe said proceedings, stipulations, agreements, and rulings tbe court finds and bolds that tbe defendant is indebted to tbe plaintiff in tbe sum of eight hundred seventeen and 81/100 dollars ($817.81), which includes interest to 30 April, 1934, and that tbe plaintiff is indebted to tbe defendant in tbe sum of four thousand four hundred twenty-five and 79/100 dollars ($4,425.79), which includes interest to 30 April, 1934; that tbe amount of defendant\u2019s indebtedness to tbe plaintiff should be offset against tbe amount of plaintiff\u2019s indebtedness to tbe defendant, leaving a net amount due by tbe plaintiff to tbe defendant of three thousand six hundred seven and 98/100 dollars ($3,607.98), with interest from 30 April, 1934. Upon motion of Tillett, Tillett & Kennedy, attorneys for tbe defendant, it is ordered, adjudged, and decreed that tbe defendant recover of tbe plaintiff tbe sum of three thousand six hundred seven and 98/100 dollars ($3,607.98), with interest from 30 April, 1934, and tbe costs of tbe action, to be taxed by tbe clerk. This 5 May, 1934. Thomas J. Shaw, Judge Presiding.\u201d\nTbe plaintiff\u2019s exceptions and assignments of error are as follows: \u201c(1) That tbe court, at tbe close of tbe evidence of tbe defendant on its counterclaim, overruled tbe plaintiff\u2019s demurrer to tbe defendant\u2019s evidence upon tbe counterclaim and its motion to dismiss tbe counterclaim as of nonsuit. (2) After bearing tbe arguments of counsel, tbe court ruled that tbe paper-writing offered in evidence by tbe defendant, marked \u2018Defendant\u2019s Exhibit No. 1,\u2019 was tbe contract between tbe parties, and that under tbe terms and provisions of tbe contract covered damages to property by blasting, and that plaintiff would be liable to tbe defendant for damages, if any, caused by blasting or explosion, as well as for expenses reasonably incurred by tbe defendant in tbe settlement of such matters. (3) That at tbe close of all tbe evidence tbe court overruled tbe plaintiff\u2019s demurrer to tbe defendant\u2019s evidence on its counterclaim, and motion for judgment as of nonsuit upon tbe counterclaim then made. (4) That tbe court entered a judgment in favor of tbe defendant, as appears in tbe record.\u201d\nAppeal was duly taken to tbe Supreme Court. Tbe necessary facts will be set forth in tbe opinion.\nG. E. Cover and William T. Covington, Jr., for plaintiff.\nTillett, Tillett & Kennedy for defendant." }, "file_name": "0661-01", "first_page_order": 729, "last_page_order": 741 }