United States Fidelity v. Bullard Gin , 245 S.W. 720 ( 1922 )

The question for decision is: Did the court err in construing the policies of insurance in evidence as not covering the Bullard Gin Mill Company's employees who were employed to work in its business of making boxes and crates? It was for the court to construe the insurance policies and to determine the meaning of the clauses involved, and the court did not, it is believed, err in construing the same as he did. There are two distinct obligations upon the insurance company by the terms of the policy: One to secure payment of the compensation to the employee, and the other to indemnify the Bullard Gin Mill Company, the employer, against loss for the liability imposed upon, it, the employer, by law for damages on account of such injuries or death. By item 3 it is expressly declared that the "kind of business (manual classification) of the insured is cotton ginning and pressing (no compressing)." The "estimated pay roll of employees" and the "estimated advance premium" was with reference to that "kind of business." The representation or declaration of the "kind of business" was material, in view of the fact that the insured company was conducting two separate and distinct kinds of business. It would appear, then, that the insurance company and the insured company intended the line of business of "cotton ginning and pressing," in which the insured company was engaged, to be the only line of business covered by the policies of insurance. And the declaration had the substantial effect of singling out one of the lines of business for, and of eliminating the other from, indemnity under the policies. And item 2 specially limits liability for indemnity imposed by law for damages on account of injury or death "as are specified in item 3 of the Declarations." Thus, as evidently appears, the parties clearly had in mind indemnity for liability arising under the Workmen's Compensation Act as applicable only to the business of "cotton ginning and pressing." In view of the fact of the special designation in the policy of the line of business that would be followed under the policy, condition A would not relieve and authorize a different construction, for the language there would ordinarily be understood as intended and meant by the parties to apply to such "a change in or extension of the business" as was named or specially designated in the policy, rather than intended by them to refer to some other business distinct from and not connected with that mentioned in the policy. And likewise the term "all employees of the employer," as used both in "item 6" and in condition A, means and has reference and application to that particular class of employees engaged in the line of business specially mentioned in the policy. It is therefore concluded that the policies of insurance should be construed to mean that they cover all employees of the insured company legally employed in the business mentioned in the Declarations made a part of the policies. The statute (articles 5246 — 82 and 5246 — 84, St. 1920) does not deny or relieve, but authorizes the construction placed upon the policies by the trial court.

The judgment is affirmed.