Dixon v. United States Fidelity & Guaranty Co.

293 S.W. 291

• Court: Court of Appeals of Texas
• Decided: December 30, 1926
• Docket: No. 3317.
• Status: Published

Opinion

LEVY, J.

(after stating , the facts as above). The-question presented on the appeal is the legal correctness of submitting “justifiable cause” as an issue of fact to be determined by the jury, the action being under the statute to collect the total amount of the weekly payments awarded by. the board, together with the penalty and attorney’s fees. The appellant insists that the exculpatory facts, on which the verdict is based, is not a showing, as a pure matter of law, of a sufficient - reason for failing to pay the award promptly, as done by the ap-. pellee, and therefore the judgment should be reversed and judgment here entered in his favor. The appellee contends that the facts are sufficient to carry the question to the jury for decision, and therefore the judgment should be affirmed. The material facts are substantially without dispute. The award of the Industrial Accident Board, allowing weekly payments, was formally filed by the board on March 15, 1926. All parties thereto acceded to and abided by the ruling and decision, and did not give notice or file suit, as required, to set the award aside. It was an uneontested award from the date of filing it by the board. The appellee did not, as admittedly shown, pay the weekly payments as they matured under the terms of the award, nor offer to pay same until April 9, 1926, more than 20 days after the award. On April 9, 1926, there was due and unpaid, under the terms of the award, the sum of the weekly payments from the week ending November 27, 1925, to the week ending April 9, 1926, being as much or more than 15 weekly payments, each in the sum of $10.39. In such facts as stated; and under the terms of the statute, the legal duty to the insured employee owing by the insurance company was to “at once comply with” or pay the compensation allowed according to the terms of the award, upon the expiration of the statutory 20-day period, and thereafter as the weekly payments regularly matured to pay same promptly as they mature.” Article 8307, §§ 5 and 5a, Rev. Stat. The words “at once” and “promptly” were meant to emphasize that the compensation should be paid as it became due under the terms of the award, beginning not later ¿han at the expiration of the 20-day period provided from the date of the filing of the award in case all parties acceded to such award. Consequently, the act of the insurance company in failing to make payment of the uncontested award, according to its terms, on the precise date due, must be relieved against, if at all, in the “justifiable cause” offered as explanation thereof. As applied to the instant case, the exculpatory facts relied upon and made the basis of the verdict are to the effect: That the adjusting or paying officer of the insurance company failed to receive the copy of the award mailed to it at the Dallas office by the Industrial Accident Board, and did not know of the filing of the award. That if the said official of the insurance company had received the copy .of the award, or otherwise had known of the award, prompt compliance with its terms would have followed, as the insurance company was able and willing, and, acting through this officer, intended to comply therewith. That the said adjusting officer of the insurance company offered' to pay all the accrued payments immediately upon the ascertainment of the award, being only 25 days from the date of the award. Such facts, as well as the entire record, clearly reflects innocence on the part of the insurance company, acting through its officer, of any actual wrongdoing or bad faith respecting the award or the regular payment of the weekly compensation. The insurance company displayed entire good faith, as is manifest, in paying the compensation before the award, and in offering to pay accrued compensation after it knew of the decision and award by the board. Yet the insurance company has, in the specific facts, made actual default of compliance with and prompt payment of the award. And it is for this failure to act and pay “promptly” that the insurance company must be judged. The chief weakness as a justifiable cause, as is apparent, lay in the admitted fact that the attorney actually representing the insurance company before the board was timely served by the board with a copy of the award filed, and “knew the award was made” or filed.

The principal, according to a settled rule of law, is bound by the knowledge of the agent. Corporations, as well as natural persons, are held responsible for the knowledge which is possessed by those whom they appoint as their representatives. Notice to an attorney is notice to the client employing him. 6 C. J. § 144, p. 638. The knowledge of the attorney is the knowledge of his client. Riordan v. Britton, 69 Tex. 198, 7 S. W. 50, 5 Am. St. Rep. 37; 6 C. J. p. 638. The rule is but the application of the general law of agency. So that mere failure of the adjuster or paying officer of the insurance company too receive the copy mailed by the board is insufficient ground to place the insurance company in a position or attitude to assert, as a defense, that it should not be held to have notice of the filing of the award. And such position is not different, even though the attorney in good faith relied upon the board mailing a copy to his client. The notice to the attorney, although he did not communicate it to the adjuster, has the same legal effect as to duties to third persons as though his duty had been faithfully performed to his principal or client. The statute does not require, and no rules, as far as this record shows," seem to have been promulgated by the board, requiring notice to be' given of the filing of the award to both the attorney and the insurance company. No legal duty in that respect exists. And if any uncertainty arises on the part of those interested in ascertaining just when awards taken under advisement are made and filed, such difficulty was entirely removed in this case by the timely notice to the attorney through delivery of a copy of the award, showing date of filing. It follows from this fact, in legal effect, that the insurance company did have sufficient and timely notice of the filing of the award by the board, notwithstanding the adjusting or paying officer himself did not Laye or receive the notice. Then the nonperformance or failure to promptly pay the award according to its terms was due solely to neglect, or a mere failure to act.

In this light it is difficult to distinguish this ease in principle from the case of Minor v. London Guarantee & Accident Co. (Tex. Com. App.) 280 S. W. 163. In the Minor Case the insurance company did not pay promptly before or upon the expiration of the statutory 20-day period, and defaulted and neglected to comply with the award for about two weeks before the suit was filed. It was there firmly held that the neglect to pay the award promptly entitled the plaintiff to mature “the entire claim” and recover the total amount of the award, together with 12 per cent, penalty and reasonable attorney’s fees. It was further determined that “mere neglect” was not a legal showing of “justifiable cause.” The Supreme Court expressly’ approved “the holding of the Commission of Appeals on the questions discussed in its opinion.” Therefore it appears to be the plain, positive law that prompt payment of an uncontested award, beginning “at once” upon the expiration of the statutory period of 20 days, must not be neglected. However harsh of application it may be in exceptional cases, as is the present one, the rilling must follow that neglect of 4 days is no more justifiable than the neglect of 2 weeks under the terms of the statute. It is believed that, as a matter of pure law, justifiable cause was not shown by appellee for the default.

The case seems to have been tried, as appears, with the view of finally ending the litigation. Attorney’s fees were found to be in “the sum of $200 under the evidence adduced in this cause.” The judgment is therefore reversed, and judgment is here entered in favor of the appellant for the amount of the award, in a lump sum, less credits thereon, together with 12 per cent, damages and $200 attorney’s fees. The costs of ap•peal and of the trial court will be taxed against the appellee.