Case Name: CORNELL v. TRAVELLERS' INS. CO.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1901-12-06
Citations: 73 N.Y.S. 341
Docket Number: 
Parties: CORNELL v. TRAVELLERS’ INS. CO.
Judges: 
Reporter: West's New York Supplement
Volume: 73
Pages: 341–345

Head Matter:
(66 App. Div. 559.)
CORNELL v. TRAVELLERS’ INS. CO.
(Supreme Court, Appellate Division, First Department.
December 6, 1901.)
Employer’s Indemnity Insurance—Liabilities—Attorney’s Fees.
Defendant insured plaintiff against loss from liability to his employés: for personal injuries and from liability to persons other than employés who might sustain bodily injuries caused by the business operations of insured. The policy described plaintiff’s business as manufacturing and erecting structural ironwork for buildings. The policy also insured plaintiff’s liability on shop work and general liability on outside work. The-policy provided that the company might pay the full amount for which it would be held liable in respect to claims for personal injuries, failing, which it “shall defend said proceedings in behalf of the insured, and shall have control of such defense.” Plaintiff was sued by several persons for injuries received in the erection of a building. Defendant refused to defénd such suit, and plaintiff did so successfully. Held, that defendant was liable to plaintiff for his expenses in connection therewith.
Ingraham, J., dissenting.
Appeal from trial term, New York county.
Action, by John M. Cornell against the Travellers’ Insurance Company on an insurance policy. From a judgment dismissing the complaint, plaintiff appeals.
Reversed.
Argued before VAN BRUNT, P. J., and HATCH, McLAUGHUIN, O’BRIEN, and INGRAHAM, JJ.
Lemuel Skidmore, for appellant.
Ira D. Warren, for respondent.

Opinion:
McLAUGHLIN, J.
On the i8th of July, 1895, the defendant issued to the plaintiff a policy of insurance, which, among other things,, provided that the defendant, "in consideration of the application for this policy, a copy of which is hereto attached and made a. part of this contract," and of $5,000, does hereby insure "the plaintiff against loss from liability to employés of the insured who may during the term of twelve months from noon of July 3, 1895, accidently sustain bodily injuries while actually employed in the performance of 'duty-in the trade or occupation for which they have been employed by the insured under circumstances which shall impose upon the insured a common-law or statutory liability to such employés by reason tiaenrof. This insurance also covers the liability of the insured to persons other than employés who may, during the same term, sustain bodily injuries directly caused by the business opera- - tians of the insured, as described in the application for this policy, under -circumstances which shall impose upon the insured a common-law or statutory liability to such persons therefor." The applicafion referred to described the plaintiff's business .as manufacturing and erecting structural ironwork for building, and stated that the -policy to be issued in pursuance of it was to cover plaintiff's "liability on shop work and general liability on outside work, including teams." During the life of the policy a building in the city of New York, in process of construction, the structural ironwork of which ihad "been partially, but not entirely, completed by the plaintiff, colSa.ps.ed, and a number of workmen engaged thereon, not employés of the plaintiff, were either killed or injured. Following the accident, several of the persons injured and the legal representatives of those killed commenced actions in the supreme court of this state against ihe plaintiff, one Parker, the general contractor, and Ireland, the owner of the building, to recover damages for the deaths occasioned or -the personal injuries sustained, upon the ground that the same •were caused by the negligence of the defendants named in such actions. In all, ii actions were commenced. Immediately • following ike accident, the plaintiff in this action notified the defendant of what ihad occurred, and thereafter, as the actions were commenced, gave it -notice of that fact, at the same time transmitting to it a copy of -the summons and complaint in each action, coupled with a request that it assume and take charge of the defense. In each instance the' copy of the summons and complaint was returned, and the request zrefused. The plaintiff thereafter took charge of the defense on its <own account. Two of the actions were tried, and verdicts rendered in favor of this plaintiff, and thereafter the other actions were discontinued, so far as the same related to him. The defense of the ¡actions thus begun, so far as the same related to this plaintiff, in-Yolv-ed on his part the expenditure of a considerable sum of money, and this action was brought to recover that sum from the defendant, _ ¡upon the ground that under the terms of the policy referred to it was ' liable for the same. At the conclusion of the plaintiff's case, on motion -of defendant's counsel, the complaint was dismissed, substantially upon the ground that the plaintiff had failed to establish that the death of any of the persons killed was caused by, or the injuries to the other persons bringing actions were "directly the result of, the ¡business operations" of the plaintiff; and that the defendant had mot -given its written consent that the plaintiff incur any expense in She -defense of such actions. Judgment was entered to this effect, 5rom which the plaintiff has appealed.
We are of the opinion that the court erred in dismissing the complaint. It was stipulated upon the trial that the defendant refused ?t© take charge of the defense in any of the actions, and, having refused, the plaintiff was justified, under the terms of the policy, in assuming the defense, and looking to the defendant for whatever expense he incurred in connection therewith. Nor do. we think there is any force in the other ground urged, viz. that the plaintiff failed to show that the deaths were caused or the injuries sustained by the plaintiffs in the respective actions were "the direct result of the business operations of the plaintiff." It is true that it appeared upon the trial that the collapse of the building was not caused by any neglect or fault on the part of the plaintiff in this action, but was due solely to an insecure foundation of the building, with which the plaintiff had nothing to do; but the fact that the work which the plaintiff did was in no way connected with the foundation of the building did not relieve the defendant from its liability under its policy of insurance to defend actions brought against him upon the alleged ground that he was responsible in whole or in part for the collapse of the building. The deaths were caused and the injuries sustained in whole or in part by the fall of the iron structure which the plaintiff had erected, and when claims were made that his work was the cause of the collapse, or contributed to it, he was entitled to the protection provided by the policy. The contract was not one simply to indemnify him against damage,—that is, legal claims, which, from the very nature of things, could only be determined after a trial had,—but was to indemnify him against all claims, whether legal or not, provided the same came fairly within the provisions of. the policy. This, is evident from a portion of the policy, which provides that the defendant, "this company, shall have sole right, and it shall be its duty, to negotiate settlements and adjustments of all claims made against the insured and covered by this policy. If legal proceedings be commenced to enforce such claim or claims against the insured, this company may pay the insured the full amount for which it can be held liable in respect of such claim or claims, failing which it shall defend said proceedings on behalf of the insured, and shall have control of such defense." The policy, of course, must be liberally construed, and, if there be any doubt about its construction, or if it be susceptible to two interpretations, then it should be most strongly construed against the insurer, because it prepared the contract, and is responsible for the words used in it. Janneck v. Insurance Co., 162 N. Y. 574, 57 N. E. 182; Trenton Potteries Co. v. Title Guarantee & Trust Co., 50 App. Div. 490, 64 N. Y. Supp. 116. Claims of the nature referred to in the policy were made against the insured, based upon the ground that he was liable for the deaths occasioned and the injuries sustained, to enforce which the respective actions were brought. The very purpose of the policy was to indemnify the plaintiff against any expense which he might sustain by reason of such claims being made, and therefore, by the express provisions of the policy, it was the duty of the defendant to have assumed and taken charge of such defense. It having failed and neglected to do so, the only thing which the plaintiff could do was to assume and take charge of the defense himself, and look to the defendant for any expense he might incur by reason thereof, and for which it must be held liable. Hoven v. Assurance Corp., 93 Wis. 201, 67 N. W. 46, 32 L. R. A. 388; Anoka Lumber Co. v. Fidelity & Casualty Co., 63 Minn. 286, 65 N. W. 353, 30 L. R. A. 689.
The judgment, therefore, must be reversed, and a new trial or dered, with costs to the appellant to abide the event. All concur, except INGRAHAM, J., who dissents.