Traders' & General Ins. Co. v. Emmert

GALLAGHER, Chief Justice.

This is a compensation case. Appellant, Traders’ & General Insurance Company, on December 7, 1932, issued a workmen’s compensation policy in the usual form to the Oil Field Water Company, which was an assumed name under which J. L. Eilers and L. T. Jones, copartners, were doing business, and the policy so showed on its face. Said policy contained a provision that no assignment of any interest thereunder should bind appellant unless its consent to such assignment was indorsed thereon. Said Jones, on February 25; 1933, sold to J. P. Kerr and W. L. Gary his undivided one-half interest in all the rights, privileges, and properties belonging to said Oil Field Water Company and retired from further participation in the operation of said business. No consent of appellant to such transaction was indorsed on the policy or otherwise shown. Ernest C. Emmert, an employee of said Water Company, was, on the 6th day of March, 1933, killed while in the discharge of the duties of his employment. Appellee Ethel Emmert is the surviving wife, and the other appeilees are the minor children, of the deceased employee. Appellees presented their claim to the Industrial Accident Board, which made an order thereon. This suit was instituted by them to set said order aside and to recover compensation in a lump sum.' Appellant, by cross-action, sought to have said order set aside and all compensation denied.

The ease was submitted to a jury on special issues. The court considered the answers returned by the jury thereto and rendered judgment against appellant in favor of ap-pellees for compensation in the sum of $13.85 per week, payable weekly, for 360 weeks, one-third of which was awarded to attorneys representing them in the case.

Opinion.

Appellant’s assignments are all based on its contention that it was in no way liable for the payment of compensation on account of the death of said Emmert because the testimony showed affirmatively without contradiction that the policy sued on was issued to the Oil Field Water Company, a partnership composed of J. L. Eilers and L. T. Jones; that the sale by said Jonesi on February 25, 1933, of his half interest in all the rights, privileges, and properties of the partnership to Kerr and Gary and his retirement from further participation in the operation of the business dissolved such partnership ; that the association of Eilers, Kerr, and Gary in the continued operation of said business created a new partnership; that the deceased Em-mert was at the time of the accident resulting in his death'an employee of the latter and not the former partnership; that since it had never consented to the assignment of said policy by the original partnership to the new partnership, its liability thereon ceased when such original partnership was dissolved. The facts material to the determination of appellant’s contention were not controverted. The transfer by one partner of his interest in the partnership property to a third party and his withdrawal from participation in the business conducted thereby dissolves the partnership. Moore v. Steele, 67 Tex. 435, 439, 3 S. W. 448; Watson v. McKinnon, 73 Tex. 210, 215, 11 S. W. 197; Carroll v. Evans, 27 Tex. 262, 267; Rogers v. Nichols, 20 Tex. 719, 724; Sherk v. First National Bank (Tex. Com. App.) 206 S. W. 507, 509, par. 4. The conveyance by Jones to Kerr and Gary of all his undivided half interest in the rights, privileges, and properties of the partnership and his. retirement from participation in the business conducted thereby effected a dissolution thereof. Such partnership to which the policy sued on was issued thereupon ceased to exist. The deceased Emmert was, therefore, at the time he received the injuries resulting in his death, no longer an employee thereof and no longer within the terms of the policy sued on, which promises to pay compensation to the employees of such partnership or to the dependents of such employees. New Amsterdam Casualty Co. v. Harrington (Tex. Com. App.) 290 S. W. 726. Such policy was a valuable asset of the firm to which it was issued. The terms of the conveyance aforesaid were very broad and sufficient to include an attempted assignment of Jones’ interest therein. Said policy contained an express provision that no assignment of interest thereunder should bind appellant unless its consent was indorsed thereon. Contracts for workmen’s compensation insurance, like other insurance contracts, are personal between the parties thereto, and a provision prohibiting the assignment thereof without the consent of the insurer is valid. Kolb v. Brummer, 185 App. Div. 835, 173 N. Y. S. 72, 73, pars. 1 and 2 (affirmed 226 N. Y. 570, 123 N. E. 874); White v. Maryland Casualty Co., 139 App. Div. 179, 123 N. Y. S. 840, pars. 1 and 2; National Fire Ins. Co. v. Carter (Tex. Com. App.) 257 S. W. 531, 532 (bottom 1st column); Cremo Eight Co. v. Parker, 118 App. Div. 845, 103 N. Y. S. 710, 711; Schneider's Workmen’s Compensation Law, p. 1606, § 485. It is true that recoveries have been permitted where the employer, at the time of the accident, was not the one specifically named in the policy; but in each such case the recovery was based on a finding of waiver or estoppel. Adams v. McKay, 229 Mich. 670, 202 N. W. 962, 963, par. 1; Capital Glenn Mining Co. v. Industrial Accident Commission, 124 Cal. App. 79, 12 P.(2d) 122; Kocher v. Kocher’s Estate, 300 Pa. 206, 150 A. 468; Scull v. Scull, 109 Pa. Super. 226, 167 A. 496. There was neither allegation nor proof of any circumstance tending to show waiver or estoppel in this case.

The case of Moffett v. Employers’ Liability Assurance Corporation, 286 S. W. 508, by the Court of Civil Appeals at Galveston, bears directly on the contention urged by appellant. In that case the insurance carrier issued its workmen’s compensation policy to D. B. Mc-Daniels and Joe Simmons, doing business as partners under th.e firm name of McDaniels & Simmons. Thereafter one Crosby became a member of such partnership and the firm name was changed to Crosby, McDaniels & Simmons. The insurance carrier, at the instance of the new firm, entered an indorsement on such policy showing the change in the business name and composition of the insured. Subsequently both Crosby and Mc-Daniels retired from said firm and one Pearce became a member thereof and the business was continued under the firm name of Simmons & Pearce. No consent to the assignment of the policy to the last-named firm was ever given by the insurance carrier. The claimant in that case relied on an alleged estoppel to bind the Insurance carrier, but the court held that such estoppel was not shown. A recovery was denied by the trial court and its judgment affirmed by the Court of Civil Appeals. The Supreme Court dismissed an application for writ of error for want of jurisdiction. Apparently, however, the claimant in that case conceded that the consent of the insurance carrier to the assignment of the policy to the last-named firm, or its es-toppel to deny such consent, was necessary to justify a recovery.

Appellees do not deny as an abstract proposition of law that the sale by one partner of his interest in the partnership operates ipso facto as a dissolution thereof. They do, however, deny the application of such proposition to the facts of this ease because the name of the insured employer was shown by the face of the policy to be “Oil Field Water Company,” and Filers, Kerr, and Gary continued the business under the same name. Appellees contend that since the firm name was not changed, there was no breach of the provision of the policy requiring appellant’s consent in ease of an assignment thereof. Appellees ignore the fact that the face of the policy, in direct connection with the statement that the name of the insured employer was “Oil Field Water Company,” further showed that the same was a copartnership composed of J. L. Eilers and L. T. Jones. The name “Oil Field Water Company” was therefore what is called in article 5924 of our Revised Statutes an assumed name. This, however, did not change the fact that Eilers and Jones, in transacting business under such name, were merely partners. Said partnership, merely by the use of such assumed name, did not acquire the corporate attribute of continuous succession regardless of change in .the membership thereof. Ap-pellees further insist that there never was an actual change in the membership of said firm prior to the time that the deceased employee Emmert was injured. This contention is based on- the fact that when Jones sold his interest in the partnership property and retired from participation in the business, the consideration for such sale, or a part thereof, was a .promissory note which Kerr and Gary secured by a deed of trust on their interest in the physical properties of the firm so purchased by them, and the further fact that thereafter, and long subsequent to the injury sustained by the deceased Emmert, on default in the payment of such note said properties were sold under such deed of trust and Jones became the purchaser thereof at such sale. Such deed of trust is not found in the statement of facts. Clearly, the foregoing facts are wholly insufficient to show that Jones remained a member of the firm doing business under such assumed name after such sale, and that Kerr and Gary never became members thereof. We are unable to agree with either of appellees’ contentions.

The judgment of the trial court is reversed, and since the case was apparently fully developed at the trial, judgment is here rendered that appellees take nothing by their suit.