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Toub v. Home Indemnity Co.

Decided: March 20, 1936.

NATHAN B. TOUB, PLAINTIFF-RESPONDENT,
v.
THE HOME INDEMNITY COMPANY, NEW YORK, DEFENDANT-APPELLANT



On appeal from a judgment of the District Court of the city of Bayonne.

For the appellant, Schneider & Schneider (Jacob Schneider, of counsel).

For the respondent, Tucker & Tucker (Stanley M. Tucker, of counsel).

Before Justices Trenchard, Heher and Perskie.

Heher

The opinion of the court was delivered by

HEHER, J. Plaintiff sues to recover counsel fees incurred in the successful defense of an action instituted by third persons to recover damages for injuries to person and property claimed to have been the proximate result of negligence in the operation of a motor truck owned by him, during the term of a policy of casualty insurance covering the vehicle, whereby defendant undertook to indemnify him against liability of this character, and to defend, at its own expense, actions brought to enforce such claims.

The District Court judge, sitting without a jury, resolved the issues in favor of plaintiff, and from the consequent judgment defendant appeals.

The primary question for solution is whether respondent defaulted in the performance of the duty imposed upon him by the policy to forward the summons and state of demand to the insurer at its home office, and thereby forfeited all claim to indemnity under the contract.

The pertinent policy provision is in terms following:

"Upon the occurrence of an accident, the Assured shall give prompt written notice thereof to the Company's Home Office at New York, New York, or to an Authorized Agent. If any claim is made on account of such accident, the Assured shall give like notice thereof with full particulars. If thereafter, any suit or other proceeding is instituted against the Assured to enforce such claim, the Assured shall immediately forward to the Company at its Home Office every summons or other process served upon him. Notice given by or on behalf of the Assured to any Authorized Agent of the Company within the State in which this policy is issued, with particulars sufficient to identify the Assured, shall be deemed to be notice to the Company, it being understood that failure to give any notice required to be given by this policy, within the time specified therein, shall not invalidate any claim made by the Assured if it shall be shown not to have been reasonably possible to give such notice within the prescribed time and that notice was given as soon as was reasonably possible."

And these are the essential facts and circumstances: The policy was issued by the insurer's agent, Colville & Company. Its vicarious authority was of a general character, and was committed to writing. It seems to have been entrusted with blank policies, and was empowered to issue them for and on behalf of its principal. Prompt notice of the occurrence of the accident was given by the assured to the issuing agent, who, laboring under the misapprehension that the Consolidated Indemnity and Insurance Company, whom it also represented, had issued the policy covering respondent's vehicle, relayed the notice to that company, who also failed to discover the mistake. The summons and state of demand were likewise delivered by the assured, promptly after service, to the issuing agent, who forwarded them to the Consolidated

Company. The latter undertook defense of the action; it caused an appearance to be entered for and on behalf of the respondent, and, so far as appears, no substantial right was sacrificed by a lack of diligence on its part in handling the litigation. The Consolidated Company was adjudged insolvent before trial of the action, and the receiver discovered that it was not the insurer. Thereupon, respondent gave notice to appellant, and demanded that it undertake the defense of the action in accordance with what he ...


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