ON REHEARING. Respondent Aetna Life Insurance Company petitioned for a rehearing which was granted and the cause was again submitted at the June, 1924, term of this court held at Lewiston.
The principal errors relied upon for a rehearing are (1) that the failure of respondent to appeal from the order overruling the demurrer challenging the jurisdiction of the *Page 634 court was in effect a waiver of the objection; (2) that the contract of insurance had not been canceled; and (3) that the cause, if reversed, should be remanded for a new trial in order to give respondent an opportunity to offer its evidence in support of its contention that the policy had been canceled, and that such cancelation had been acquiesced in.
We agree with respondent that the question of the jurisdiction of the court over the subject matter is never waived and may be raised for the first time in this court, and there is nothing in the original opinion contrary to the holding in Aram v. Edwards, 9 Idaho 333, 74 P. 961.
The second contention, that there was error in holding that the insurance policy had not been canceled, we think has been sufficiently considered and for the reasons stated the conclusion reached will be adhered to.
It is urged that irrespective of the fact that this policy was in part for the benefit of those who might be employed by the mining company, it was nevertheless a contract only between respondent and the mining company, and the mining company having breached its contract by a failure to pay the premium, respondent had a right to cancel it and gave a notice that was definite, certain and unequivocal which evinced a determination to do so, and the other party was not misled thereby, although the time fixed was impossible under its terms, but, on the contrary, that the insured acquiesced in its cancelation and such cancelation should be held effective from and after the expiration of the thirty days provided in the policy, which was prior to the injury complained of.
Respondent insists that a more strict compliance with the terms of the agreement relating to cancelation should not be exacted than in other classes of insurance; that even though the policy may be taken out primarily for the benefit of the insured's employees and they may have a vital interest in it, they cannot prevent its cancelation where the insurer elects to cancel the same. But we adhere to the view that the employees of the insured who have suffered injuries, or their dependents when death has ensued, may recover *Page 635 against the insurer unless the policy has been canceled in accordance with the conditions in the policy. The insurer fixes those terms, and it is a well-settled rule of construction that the words of a contract will be construed most strongly against the party who uses them. (Anson on Contracts, p. 253, Knowlton's 2d Am. ed.; Century Digest, vol. 11, p. 729;Noonan v. Bradley, 76 U.S. 394, 19 L. ed. 757; Otis v. UnitedStates, 20 Ct. of Cl. 315; Shannon Copper Co. v. Potter,13 Ariz. 245, 108 P. 486; Dollar v. International Banking Co.,10 Cal. App. 83, 101 P. 34; Payne v. Neuval, 155 Cal. 46,99 P. 476; Yoch v. Home Mut. Ins. Co., 111 Cal. 503,44 P. 189, 34 L.R.A. 857; Lassing v. James, 107 Cal. 348,40 P. 534.)
The preamble to the Workmen's Compensation Act, C. S., sec. 6214, as well as the entire law, manifests a purpose on the part of the legislature, under its police power, to require every industry to bear the burden cast upon the working class because of personal injuries occasioned by accidents that are an incident of the occupation, in so far as the same may be compensated by a pecuniary consideration. All of its provisions, including the procedure to enforce the same, should be considered in view of this purpose and all contracts of indemnity to the injured, or their dependents when death ensues, should be so construed, in so far as a reasonable construction of the agreement will permit. In this view of the law we think the insurer should be required to comply with the terms of its policy with regard to its cancelation. If the question was one solely between the insurer and the insured, the acquiescence of the assured in the attempted cancelation, however irregular, would estop it to deny the same.
The question as to whether this contract of insurance is within the Workmen's Compensation Act and whether the Industrial Accident Board had authority to make the award is suggested by the record. Article 8 of the act prescribes the manner and form of giving security for compensation. C. S., sec. 6278, provides that employers, excluding the state or the municipal bodies mentioned in *Page 636 sec. 6215, shall secure compensation to their employees in one of the following ways:
"1. By insuring and keeping insured the payment of such compensation in the state insurance fund; or
"2. By depositing and maintaining with the department of commerce and industry security satisfactory to the board securing the payment by said employer of compensation according to the terms of this chapter. Such security may consist of a surety bond or guaranty contract with any company authorized to do surety or guaranty business in Idaho and having a sufficient deposit with the state treasurer upon which execution may lawfully be issued against said company on behalf of any workman secured under said bonds or contracts."
It is evident that the insurance policy pleaded and relied upon by appellant, the provisions of which have been considered, does not meet the requirements of either of the foregoing subdivisions of the section, because the employer was not insured in the state fund, nor is it such a surety bond or guaranty contract as required by the second subdivision, so that unless it falls within the terms of other provisions of this article it would not by its terms be insurance within the meaning of the Workmen's Compensation Act.
The Industrial Accident Board in the first instance had jurisdiction to hear and determine the amount of the award against the mining company, which was accordingly done, and a judgment was entered thereon in the district court for Shoshone county on March 24, 1921, in accordance with C. S., sec. 6271. The defendant mining company not having satisfied the award of the Industrial Accident Board or the judgment rendered thereon in the district court, by way of petition for a writ of execution against respondent supplementary to the judgment, claimants for the first time made respondent a party to the proceeding and as a basis for so doing relied upon the insurance agreement in controversy, designated Plaintiff's Exhibit "E," being policy No. C-0319469. Unless liability against respondent arises *Page 637 by virtue of this policy, under C. S., secs. 6282 and 6283, there is merit in the contention that as against respondent the court is without jurisdiction. These sections read:
"Sec. 6282. Every policy of insurance in the state insurance fund and every guarantee contract or surety bond covering the liability of the employer for compensation, shall cover the entire liability of the employer to his employees covered by the policy, bond or contract, and also shall contain a provision setting forth the right of the employees to enforce in their own names either by at any time filing a separate claim or by at any time making the surety a party to the original claim, the liability of the surety in whole or in part for the payment of such compensation. . . . ."
"Sec. 6283. Every such policy and contract shall contain a provision that, as between the employee and the surety, the notice to or knowledge of the occurrence of the injury on the part of the employer shall be deemed notice or knowledge as the case may be on the part of the surety; that the jurisdiction of the employer shall, for the purpose of this chapter, be jurisdiction of the surety, and that the surety shall in all things be bound by and subject to the orders, findings, decisions or awards rendered against the employer for the payment of compensation under the provisions of this chapter."
This contract of insurance was made January 1, 1918, and on February 5th following an indorsement was attached thereto in almost the precise language of these sections above quoted. It is therefore evident that it was the purpose of respondent by this policy to indemnify the mining company as well as to become liable to its employees for injuries to them. By this contract respondent stipulated that it "shall in all things be bound by and subject to the orders, findings, decisions or awards rendered against the assured" whether made a party to the proceedings or not. This contract also provides that "jurisdiction of the assured shall for the purposes of the Workmen's Compensation Act, be jurisdiction of the company and the company shall in *Page 638 all things be bound by and subject to the orders, findings, decisions or awards rendered against the assured." That is to say, respondent entered into a contract of liability instead of a contract of surety, and thereby assumed direct liability to each employee of the insured and made the insured its agent for all purposes by expressly stipulating that it should be "subject to the orders, findings, decisions or awards rendered against the assured." It might at any time have appeared and defended in person, but it was none the less bound by the appearance and defense of the insured. Under its contract the insured was the statutory legal representative of the insurance company for the purposes of all proceedings, process and awards, and the judgment against the insured is binding upon the insurer. (Maryland Casualty Co. v. Peppard, 53 Okl. 515,157 P. 106, L.R.A. 1916E, 597; Fenton v. Poston, 114 Wash. 217,195 P. 31.)
Respondent in its answer pleads an agreement between the defendant mining company and the Aetna Casualty Surety Company entitled "Idaho Compensation Surety Bond," which, so far as anything to the contrary in the record is concerned, is in compliance with C. S., sec. 6278, requiring a surety bond or guaranty contract, and this agreement is recognized by the Industrial Accident Board, for there is a finding by it that the respondent "Aetna Life Insurance Company and the Aetna Casualty Company canceled its Workmen's Compensation policy No. C-0319469 and bond No. S-98733 written on the part of the Coeur d'Alene Antimony Mining Company, effective August 20, 1918, for nonpayment of premium, which cancelation notice was given to the Coeur d'Alene Antimony Mining Company, Mr. C.O. Broxon, Idaho State Insurance Manager, and to the Industrial Accident Board of the State of Idaho, each dated August 8, 1918, and further that the death of Arthur F. Hauter was suffered November 18, 1918, it is recommended that the Industrial Accident Board of the state of Idaho rule that the above cancelation is effective and valid as of August 20, 1918, and the claim of the dependents *Page 639 of Arthur F. Hauter, deceased, against the Aetna Life Insurance Company and the Aetna Casualty Surety Company, both of Hartford, Connecticut, be denied, and that said companies be ruled not liable, either directly or indirectly, for the payment of any benefits whatsoever as contemplated by the Workmen's Compensation Act of the state of Idaho."
In this proceeding the petitioners did not make the casualty company a party and do not appear to have relied upon its contract of indemnity, but base their claim solely upon the insurance policy referred to. The relationship between these two companies does not appear from the record otherwise than as stated. Respondent pleads the indemnity contract and alleges that both were canceled at the same time and by the same act. We have already held that this policy was in force at the time of Hauter's death because the attempted cancelation was not effective for the reasons stated; that the finding of the Industrial Accident Board that this policy had been canceled was an error of law in the construction of the terms of the same; that all the facts being admitted it is a question of law, and a direct appeal from such conclusion was not necessary to preserve the rights of claimants. Being a question of law it was properly before the trial court and is now before us on this appeal.
We also adhere to our views, expressed in the former opinion, that the claimants, petitioners in this proceeding, are entitled to a judgment against respondent for the amount found by the Industrial Accident Board, and all questions of law and fact necessary to sustain a judgment having been determined adversely to respondent and there being no further facts to be determined, the cause is reversed and remanded, with instructions to enter a judgment against respondents in accordance with the award of the Board. Petitioners to recover costs.
McCarthy, C.J., and Budge and Dunn, JJ., concur.