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master s duty. This duty, as we say, could not be delegated, and if the injury to appellant was caused by its negligent performance the master is liable.
LABOR ORGANIZATIONS-IDENTITY-TRANSFER OF AFFILIATION— EFFECT ON RIGHTS TO ASSOCIATION FUNDS-Shipwrights', Joiners' and Calkers' Association, Local No. 2, of Seattle, v. Mitchell, Supreme Court of Washington, 111 Pacific Reporter, page 780.-The association named sued John McFarland Mitchell and another to recover certain funds claimed by the association, which had been transferred to alleged trustees of an association claiming the property on the ground that by a change of affiliation the association had forfeited its property rights. The association recovered judgment, whereupon Mitchell and his codefendant appealed, the appeal resulting in the judgment of the lower court being affirmed. The opinion in the supreme court was delivered by Chief Justice Rudkin, and is as follows:
The Shipwrights', Joiners' and Calkers' Association was organized in the city of Seattle about 25 years ago. The association is unincorporated, and is composed of numerous craftsmen voluntarily banded together for their mutual benefit and protection, and to provide health and death benefits for members. It is supported wholly by dues collected from members, which have varied from 25 cents to 70 cents per month, per capita, for several years last past. At various times since its organization the association has affiliated with different labor organizations, such as the American Federation of Labor, the Central Labor Council of Seattle, the International Union of Shipwrights, Calkers and Joiners, and the Pacific Coast Maritime Builders' Federation. From 1902 until late in 1906 the association was affiliated with the International Union of Shipwrights, Calkers and Joiners, as Local No. 11, and from the latter date until the present controversy arose, with the Pacific Coast Maritime Builders' Federation, as Local No. 2. While the membership in the association is continually changing by deaths, withdrawals, and removals, and while its affiliations with other organizations have changed from time to time, the association itself remains, and has at all times maintained its entity and separate existence. On the 21st day of August, 1907, the association had in the National Bank of Commerce in Seattle, the sum of $1,138.51, deposited in the name of the Shipwrights', Joiners' and Calkers' Association, Local No. 2. On the latter date, the defendants, who were or had been president and treasurer respectively of the association, withdrew these funds from the bank and turned them over to three persons, claiming to be trustees of the Shipwrights', Joiners' and Calkers' Association, Local No. 11. The present action was instituted by the association, and by a large number of its members in its behalf, to recover the above sum for the benefit of the association. The case was tried before the court without a jury, and from a judgment in favor of the plaintiffs the defendants have appealed.
The case presents questions of fact only. The fundamental error underlying the defense grows out of the erroneous assumption that
the respondent association changed and became a different and separate entity every time it changed its affiliations with other labor unions or organizations. This assumption has no foundation in law or in fact. Regardless of the changes in membership, and the changes in its affiliations, the association itself has remained the same, and the appellants were guilty of gross breach of trust when they took it upon themselves to pay over its funds to a rival organization without warrant or authority.
The judgment of the court below is therefore affirmed.
STRIKE INSURANCE-REPRESENTATIONS-CONSTRUCTION OF POLICY—INDEMNITY-Buffalo Forge Company v. Mutual Security Company, Supreme Court of Errors of Connecticut, 76 Atlantic Reporter, page 995.-This was a case involving the construction of a policy guaranteeing to the Buffalo Forge Co. indemnity for losses caused by strikes. The payment of such indemnity had been demanded and refused, whereupon action was brought in the superior court of New Haven County, and judgment given the plaintiff. The insurance company then appealed, claiming a number of errors in the procedure of the lower court. On review the judgment was affirmed on July 12, 1910, on grounds which appear in the opinion of the court as delivered by Judge Robinson.
The opinion is in part as follows:
We will first consider those reasons of appeal having relation to the claimed breaches of warranties and concealments and misrepresentations of material facts. The nature and novelty of this kind of insurance, and the numerous and interesting questions raised, seem to render it necessary to go somewhat into detail to define properly the attitude which this court has taken with reference to them.
It appears from the record that the plaintiff on or before the 1st day of April, 1906, was a New York corporation and engaged in the manufacture of forges, blowers, engines, etc., at its factory located in Buffalo, N. Y. It also appears that the defendant on and before May 1, 1906, was a Connecticut corporation organized under the law of this State with power to make contracts of insurance to protect, indemnify, and guarantee persons, firms, or corporate bodies engaged in the business of manufacturing against any loss or damage resulting directly or indirectly from any interference with or interruption or suspension of business, or the use and operation of any manufacturing establishment in whole or in part by reason of a strike of the employees. It further appears that on April 9, 1906, the defendant's agent called upon the plaintiff in Buffalo and solicited the insurance in question, and that the application for the policy in suit, containing the "schedule of warranties," was executed April 9, 1906. The policy itself was executed by the defendant, and on May 1, 1906, mailed to the plaintiff, and received by the plaintiff at Buffalo on May 2, 1906. The plaintiff was a member of the Buffalo Foundrymen's Association, a local association affiliated with the National Foundrymen's Association, and was also a member of the so-called
"National Metal Trades Association." The Buffalo Foundrymen's Association and the National Foundrymen's Association just referred to, recognized, dealt, and negotiated with the Molders' Union, and other unions through their officers; and the plaintiff was prior to, and during the entire year of, 1906, a member of all of said associations, and recognized unions through said associations, but did not recognize or deal with unions in any other way and did not operate any department of its factory as a union shop any further than as above stated, and the plaintiff was a union shop only to the extent indicated by membership in said associations. These are some of the material facts found by the trial court as bearing upon particular interrogatories and answers contained in certain paragraphs of the "schedule of warranties" which the defendant now claims were not truthfully answered by the plaintiff. The defendant claims that questions 7 and 8 are of this class, and further that the language employed by the plaintiff in answering the eighth question was not correctly construed by the superior court.
The finding of the court definitely settles any question of the untruthfulness in the answer to the seventh paragraph. This seventh paragraph was as follows: "State any existing dispute with or demand made by employees in the last 60 days.' The answer was, "None." The trial judge finds that the plaintiff told the exact truth as to this matter.
The eighth question and answer are as follows: "(8) Are you a union shop, and, if so, how many, and what unions do you recognize? Answer. Only so far as the National Foundrymen's Association and National Metal Trades Association." The trial judge construed this answer to mean that the plaintiff was a union shop and recognized union shops only to the extent that the National Foundrymen's Association or the Metal Trades Association did so. The defendants criticize this construction as erroneous. We are unable to see how the court could with reason or propriety have adopted any other construction. That offered by the defendants was clearly not a solution of the matter, especially when we read in this connection the ninth and tenth answers in this schedule of warranties, and consider the character of the organizations therein referred to. These questions and answers read as follows: "(9) If you are a nonunion shop, state the different lines of craftsmen employed and the approximate number of each? Answer. Are nonunion in forge and blower department; sheet iron department; pattern department. Number employees about 75, 50, and 20 each, respectively. (10) State what national and local organizations you are a member of? Answer. National Foundrymen's Association, National Metal Trades Association, and local branch of both associations." The construction of the eighth answer which the defendants claim should have been adopted by the trial judge is "that the plaintiff's shop was not any more of a union shop than the National Foundrymen's Association and the National Metal Trades Association, and that the plaintiff recognized as unions only the National Foundrymen's Association and the National Metal Trades Association." The weakness of this claim is manifest, when we consider that the organizations thus referred to were not "unions" of workingmen, but organizations of manufacturers created for the purpose, among others, of dealing with trades unions; and it is quite apparent from the tenth question and
answer that the defendant insurance company so understood the fact, and could not reasonably have attached any other meaning to the answer of the eighth warranty than that adopted by the court below, to wit, that the plaintiff was a union shop, and recognized unions only through its membership in the two national associations referred to in the answer. But if the answers were ambiguous, indefinite, or lacking in clearness of expression, the defendant company certainly waived any objection on that score, by issuing its policy on the application containing such defects. "The issuance of a policy on an application containing ambiguous, indefinite, or imperfect answers to questions propounded therein will waive any objections to the answers on the ground of defects therein." (Cooley, vol. 3, p. 2634.)
The defendant further claims that the answer in the seventh paragraph of the "schedule of warranties" is in effect a continuing warranty from the date of the application, April 6, 1906, to the delivery of the policy, May 2, 1906, and that even if this answer were true when made, if the plaintiff knew of the impending strike trouble on April 21 or 22, 1906, it then became the plaintiff's duty immediately to inform the defendant of the change of situation, and that its failure to do so vitiated the policy.
It is hardly worth while to consider the validity of this claim as thus stated, in view of facts established on the trial and appearing in the finding of the trial judge. The court has found that the policy of insurance in question was mailed to the plaintiff on the 1st day of May, and received by the plaintiff at Buffalo on the 2d day of May, shortly after the molders in the employ of the plaintiff had on that same morning gone out on a strike; and the court further finds that on the same day, May 2, the plaintiff mailed its check for $500 to the defendant, as the premium on this policy of insurance, and accompanied this check with a letter acknowledging the receipt of the policy, and containing a statement that the molders had just gone out that morning on a strike, and that the Molders' Union had notified the Buffalo Foundrymen's Association some time ago that they would demand a nine-hour day, and the same rate of pay as stated in their present demand; and the letter contained the further statement that during the conference of the last few days the employees had withdrawn their nine-hour demand, and, although they were in conference all day with the foundrymen, they came to no agreement, and, after an adjournment at 10 o'clock, they met and decided to place this agreement before the foundrymen this morning (May 2) and insist upon its being signed before returning to work; that the foundrymen had practically agreed to their wage rate, but objected to signing any agreement. The writer further says these matters are very uncertain, but expresses his private opinion that it will only be a day or two before the men return to work. It appears that the defendant received the check for $500, inclosed in this letter, and accepted and cashed it with full knowledge of the contents of this letter, and knowing that the molders in the plaintiff's employ had gone out on a strike on the morning of May 2, 1906, and that the controversy out of which this strike grew had been in existence for some time prior to May 2, 1906. The court finds that with such knowledge as this the defendant accepted this premium of $500 and retained it.
These facts make it quite immaterial whether the warranty contained in the answer to the seventh paragraph of this schedule of warranties is or is not a continuing warranty, for, whichever it be, the defendant elected to accept the premium and take the chances of an early settlement of the strike trouble. Instead of assuming at once the position that the warranty was a continuing one, returning the premium, and canceling the policy, on discovering that the conditions stated in the warranty had not in fact continued throughout the entire period after the application for and before the delivery of the policy, the defendant accepts and retains that premium with full knowledge of this situation. This must be treated as a waiver. Common honesty forbids their claiming a forfeiture of this policy under these circumstances.
Again, the defendant company claims errors in the construction of those parts of the policy which relate to the amount recoverable, and to the mode in which such amount should be calculated. This necessitates an examination of the entire contract with some degree of care, and the questions arising, as to the several parts above indicated, will be best considered together. The amount of indemnity to the plaintiff stipulated in the agreement is "an amount not exceeding $50,000," and this indemnity is "against all direct damage from suspension of operations at their factory plant situate at Buffalo, N. Y., caused by a strike of their employees, and hereinafter called a strike." This is insurance against "all direct damage from suspension of operations" caused by a strike. Looking a little further at the contract, we find that the liability of the defendant company is stated as follows: "If a strike occurs during the continuance of this policy, so as to entirely suspend the production of goods, this company shall be liable for loss of net profits and for fixed charges, to an amount not exceeding $1663 per day for such working day of such entire suspension; and in case a strike prevents the making of a full daily average production of goods, this company shall be liable for that proportion of the net profits and fixed charges which the production so prevented from being made bears to the average daily product not exceeding in any case the amount insured. The average daily product shall be determined from the amount of goods last produced during a period of twelve months full work previous to the strike, and losses shall be computed from the day of the occurrence of any strike to such time as the assured is able to produce the former daily average, and shall not be limited by the day of expiration named in this policy."
Now, it appears in this case that the suspension of production was partial only, and the contract makes provision for liability on the part of the insurance company for only a proportion of the net profits and fixed charges, something less than in the case of an entire suspension of production of goods. Now, looking at the contract, how do we find that proportion is to be measured and determined, and how are profits to be ascertained? What profits are to be taken? What is the criterion, what the standard by which to ascertain, whether the insured has lost profits by the partial suspension of production? It seems to us that the standard is plainly fixed by the contract, and that the net profits of the preceding year furnish the basis of estimate, and is the same as in the case of entire suspension of production. In the latter it is the whole of such loss up to the