Shortridge v. Hipolito Co.

CRAIG, Acting P. J.

A judgment was rendered in the Superior Court of Los Angeles County against the defendant for an alleged unpaid portion of insurance premiums on policies issued under the Workmen’s Compensation, Insurance and Safety Act. The defendant appealed therefrom and thereafter a receiver of the plaintiff corporation was appointed, who continues the proceedings here.

[683]

Commencing in October, 1924, the Lumbermen’s Reciprocal Association, a compensation insurance corporation, issued three successive annual policies purporting to cover liability of the appellant to injured employees. The subjects of insurance were therein classified under at least foui’ headings, to wit, manufacturing, drivers and helpers, chauffeurs and clerical office employees. An audit of the employer’s records in 1927 revealed that it had made no declaration, and that the policies had consequently borne no provision for employees engaged in fitting and installing window screens, which was a part of the employer’s regular business, properly classified as “installation work”, for which the defendant should have paid an additional amount of insurance premium. The action was instituted for the difference between the amount of premiums paid for insurance of workmen performing carpentry work but classified as salesmen and the legal rate allowed for such workmen under a proper classification.

The contentions below, and upon appeal arose principally from the question as to whether the insurance company or the defendant employer was responsible for the erroneous classification. Appellant insists that the respondent advised that the employees performing the outside work in controversy be classified as salesmen, and that since such designation was illegal the contract of insurance was void and unenforceable. It appears, however, that the respondent corporation was ignorant of the duties of these men, that there was no such labor known to it when the policies were issued, and that appellant’s predecessor sought to base such contentions wholly upon . hearsay evidence of statements alleged to have been made by an insurance agent for which the respondent was not legally answerable. Reports made by the insured did not bear information descriptive of the duties of the employees in question, and the insurer became aware of the discrepancy only upon, investigation in 1927. That the insurer is not bound by the statements of an agent which are alleged to vary the terms of its policies, is well settled.