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Peters v. London Lancashire Indemnity Company of America — Case Summary (Supreme Court of Missouri, Div. 2, Feb. 17, 1932)

Factual and Procedural Background

Plaintiff Arthur Peters, an employee of defendant Robert Fleming, obtained a judgment on December 28, 1927, for $15,000 for personal injuries sustained September 15, 1925. Execution having issued on that judgment, the London Lancashire Indemnity Company of America (the garnishee) was summoned in garnishment as the indemnitor of Fleming. The garnishee answered plaintiff's interrogatories, plaintiff denied the garnishee's defenses, and the garnishee replied. A trial on those issues resulted in a judgment for the plaintiff and against the garnishee in the amount of $10,000 — the policy limit of the garnishee's indemnity policy in favor of Fleming. The garnishee appealed.

Legal Issues Presented

Whether service of the writ of garnishment upon the deputy superintendent of insurance (rather than the superintendent) gave the circuit court jurisdiction over the garnishee under Section 5895, Revised Statutes 1929, and whether the garnishee waived any jurisdictional objection by filing an answer.
Whether the indemnity policy covered the building and the work being performed when the injury occurred — specifically whether the building fit within the policy's limitation of "not exceeding three stories and basement in height," and whether that was a question of law or fact for the jury.
Whether the garnishee's agent's treatment of the building (collecting and retaining premiums and treating the building as within the policy) could be shown and submitted to the jury as evidence of the parties' understanding and application of the contract terms.
Whether evidence and instructions concerning the parties' treatment of the policy and the meaning of "basement" were properly admitted and submitted to the jury, and whether plaintiff's reliance on the garnishee's conduct raised only a question of contract interpretation rather than estoppel or creation of a new contract.

Arguments of the Parties

Appellant (Garnishee) — Arguments

The circuit court lacked jurisdiction of the subject matter because the writ of garnishment was not served upon the Superintendent of Insurance as required by statute (citing Sections 6085, 6310, R.S. 1919).
The policy language is clear and unambiguous; the evidence did not show the building or the work were covered because the policy limits coverage to buildings not exceeding three stories and basement in height; therefore the court should have declared non-coverage as a matter of law (citing Meissner v. Ry. Equip. Co., 211 Mo. 112).
Plaintiff could not maintain garnishment against the indemnity company under the policy because the policy provides that the insolvency or bankruptcy of the assured shall not release the company, but an action may be maintained by the injured person against the company under the terms of the policy (argument asserted by appellant).
The court erred in admitting evidence (witnesses Kelly and Fleming) that the garnishee collected premiums on work on the building, including payroll covering plaintiff's wages; the coverage clause is unambiguous and should have been decided by the court as a matter of law (again citing Meissner).
The court erred in admitting testimony that the building was a three-story building "for insurance purposes."
The court should not have submitted construction of the policy to the jury; it refused requested Instruction 1 as asked and erred in giving it as modified because construction of the policy was a question of law for the court (citing Meissner v. Ry. Equip. Co.).

Respondent (Plaintiff) — Arguments

The circuit court had jurisdiction because the writ was served upon the deputy superintendent as authorized by statute; the deputy's authority is statutory and valid (citing Sections 5673, 5894, 5895, R.S. 1929 and Kurre v. Am. Indemnity Co., 17 S.W.2d 685).
The building was three stories and a basement in height; dictionary and other authority definitions support this construction and the policy, when read in detail, does not limit coverage to buildings of only three stories and basement in the way appellant contends.
The word "masonry" in the policy is generic, encompassing tuckpointing and terra cotta work (citing Joseph N. Eisendrath Co. v. Gebhardt, 124 Ill. App. 325 and dictionaries).
The garnishee's failure to defend the underlying damage suit and its disclaimer of liability constituted a breach of contract and ended certain defenses, supporting the plaintiff's position (citing Goerss v. Indemnity Co. of America, 3 S.W.2d 272; State ex rel. v. Daues, 13 S.W.2d 1059; Brucker v. Georgia Cas. Co., 32 S.W.2d 1091).
By collecting and retaining premiums attributable to payroll for work on the building in question, the garnishee waived the right to defend on the grounds of building height or class of work and is estopped from asserting those defenses (citing Block v. U.S. Fid. Guar. Co., 316 Mo. 296; Goffe v. Nat. Surety Co., 9 S.W.2d 929; Malo v. Fire Ins. Co., 282 S.W. (Mo. App.) 78 and other authorities).
Once the garnishee had put forth a particular ground of nonliability, it could not later assert different objections after suit began — respondent cited numerous authorities for the general proposition that insurers cannot change the grounds of objection after suit is commenced (many cases listed).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Meissner v. Ry. Equip. Co., 211 Mo. 112	Cited by appellant for the proposition that construction of the policy is a question of law for the court and not one of fact for the jury.	The court did not adopt Meissner's view to exclude jury consideration; instead the court concluded the policy terms were ambiguous in context and that the question was properly submitted to the jury. (Court treated Meissner as an authority urged by appellant but found the factual treatment warranted jury submission.)
Kurre v. Am. Indemnity Co., 17 S.W.2d 685 (Mo. App.)	Cited by respondent in support of the validity of service upon the deputy superintendent of insurance and the deputy's authority under statute.	The court held service upon the deputy was valid under Section 5895, R.S. 1929, and noted the sheriff's return recited the superintendent's absence; the court relied on statutory language rather than treating Kurre as the sole basis.
Joseph N. Eisendrath Co. v. Gebhardt, 124 Ill. App. 325	Cited by respondent for the proposition that the word "masonry" is generic and includes tuckpointing and similar work.	The court referenced the contention that "masonry" was generic but did not expressly employ this case as controlling; it noted the respondent's argument about the meaning of "masonry."
Goerss v. Indemnity Co. of America, 3 S.W.2d 272 (Mo. App.)	Cited by respondent to support that failure to defend and disclaiming liability may constitute breach and limit defenses.	The court considered the respondent's argument about breach/waiver but analyzed the evidence as one showing parties' interpretation and treatment of the contract rather than resolving a pure breach-of-contract defense on legal grounds alone.
State ex rel. v. Daues, 13 S.W.2d 1059	Referenced with Goerss as related authority on defenses and insurer conduct.	The court did not expressly rely on this case in its reasoning but acknowledged respondent's citations concerning insurer conduct and defenses.
Brucker v. Georgia Cas. Co., 32 S.W.2d 1091	Cited by respondent in the group of authorities addressing insurer defenses/waiver.	No direct application by the court was described in the opinion; it was among authorities listed by respondent.
Block v. U.S. Fid. Guar. Co., 316 Mo. 296	Cited by respondent for the proposition that retention of premiums may constitute waiver or estoppel of certain defenses.	The court considered evidence of premium collection and retention as relevant to the parties' treatment of the contract and allowed it to go to the jury; it did not label the claim primarily as an estoppel in the instructions.
Goffe v. Nat. Surety Co., 9 S.W.2d 929 (Mo.)	Cited for waiver/estoppel principles relating to premiums and insurer conduct.	The court treated the garnishee's conduct (collection and retention of premiums) as evidence of the parties' interpretation and application of the contract, admitting related testimony for the jury's consideration.
Malo v. Fire Ins. Co., 282 S.W. (Mo. App.) 78	Cited by respondent among authorities on waiver/estoppel and insurer conduct.	Included among respondent's cited authorities; the court relied on the factual record rather than on this case specifically.
Shearlock v. Mut. Life, 193 Mo. App. 430	Cited by respondent in support of the proposition that an insurer may not change the grounds of objection after suit is begun.	The court noted the respondent's authorities about insurer conduct and change of defenses but decided the case on the basis that the parties' treatment of the contract created a jury issue.
Castner v. Ins. Co., 50 Mich. 273	Cited as one of many authorities supporting the principle that an insurer cannot assert new objections after suit begins.	Listed among respondent's citations; the court's decision did not depend explicitly on this authority.
Wolf v. District Grand Lodge, 102 Mich. 23	Cited as supporting authority for the respondent's general objection-change principle.	Included among respondent's citations; no distinct application by the court was described.
Brink v. Ins. Co., 80 N.Y. 108	Cited by respondent among authorities on insurer objections and consistency of defenses.	No direct application by the court described; cited by respondent.
Smith v. Ins. Co., 107 Mich. 270	Cited by respondent for the general principle about insurer objections after suit begins.	Part of respondent's supporting citations; not independently applied in the opinion's analysis.
Taylor v. Columbian League, 135 Mich. 231	Cited by respondent among similar authorities regarding insurer conduct.	Cited by respondent; no discrete application by the court is recorded in the opinion.
Ins. Co. v. Allen, 128 Ala. 451	Cited among authorities for the proposition insurers must conform objections to those stated previously in litigation.	Listed by respondent; the court's opinion does not purport to rely on this case specifically.
Snyder v. Mystic Circle, 122 Tenn. 248	Cited by respondent for the same general proposition.	No direct application by the court was recorded.
Ins. Co. v. Waugh, 60 Neb. 348	Cited among authorities on insurer conduct and objections in suit.	Listed among respondent's citations; the court did not specifically rely on this case in its opinion text.
McCormich v. Ins. Co., 163 Pa. 193, 194	Cited by respondent as illustrative authority on insurer objections.	Cited by respondent; no explicit application by the court recorded.
Western A. Pipe Lines v. Ins. Co., 145 Pa. 346	Cited by respondent within the group of authorities on insurer defenses and consistency.	Included among respondent's citations; not specifically applied in the opinion.
Mitchell v. B. of L.F. E., 103 Neb. 791	Cited by respondent for the general rule on insurer objections.	Listed by respondent; the court did not expressly base its ruling on this case.
Ins. Co. v. Elliott, 60 Ind. App. 112	Cited among authorities supporting respondent's position about insurer objections.	Cited by respondent; no distinct application by the court reported.
Ins. Co. v. Ray, 196 Ala. 425	Cited by respondent in the cluster of authorities on insurer conduct and objections.	Included among respondent's citations; not specially applied by the court.
Ward v. Ins. Co., 69 Or. 347	Cited by respondent as additional supporting authority.	Listed by respondent; the court's opinion does not indicate a specific application.
Milling Co. v. Ins. Co., 127 Iowa 314	Cited by respondent among supporting authorities for insurer-objection principles.	Cited by respondent; no direct court application recorded.
Jacobs v. Sugar Refinery Co., 115 A.D. 499 (N.Y.)	Cited by respondent with other cases supporting the general proposition on insurer objections.	Included among respondent's citations; not explicitly applied by the court.
Strasburger Co. v. Bonwit, 174 A.D. 215 (N.Y.)	Cited by respondent as authority illustrating insurer objection-change principle.	Listed by respondent; no independent application in the court's reasoning appears in the opinion.
Landau Grocery Co. v. Hart, 223 S.W. 793	Cited in the court's opinion for the proposition that words by custom and usage acquire technical significance and that parties may give peculiar meanings to contractual terms.	The court used this authority as illustrative support for treating contractual terms as potentially acquiring special meaning by usage and for permitting parol evidence of the parties' treatment; applied in the court's interpretive analysis.
Snoqualmi Realty Co. v. Moynihan, 179 Mo. (l.c. 643)	Cited in the opinion to support the principle that terms may acquire technical significance by custom and usage.	The court cited this case as part of the body of authority showing that words may have technical or customary meanings and that parties' treatment of terms is relevant.
Soutier v. Kellerman, 18 Mo. 509-11	Cited in the opinion for the same principle regarding custom and usage affecting contractual terms.	Used by the court as part of its reasoning that the parties' interpretation and treatment of a contract term may be shown and considered.

Court's Reasoning and Analysis

The opinion's analysis can be summarized in discrete steps reflecting the court's application of statutory provisions, evidentiary rulings, contract construction principles, and instructions given to the jury.

Jurisdiction and waiver: The court first addressed the garnishee's challenge that service upon the deputy superintendent of insurance (rather than the superintendent) deprived the circuit court of jurisdiction. The court observed that the garnishee had not timely objected in the circuit court, having filed an answer to interrogatories and proceeded to trial. The court further relied on Section 5895, R.S. 1929, which validates service upon the deputy where the superintendent is absent; the sheriff's return recited the superintendent's absence. Thus the court held jurisdiction was proper and that the garnishee was not in position to raise the objection after participating in the proceedings.
The policy language and the factual dispute: The court examined the indemnity policy's declarations and an attached rider limiting contractor coverage to buildings "not exceeding three stories and basement in height." Photographs and witness testimony were offered about the building's number of stories; the factual dispute hinged in large measure on the meaning of "basement" in the context of the particular building (front entrance at street level, rear portion partly below ground, sub-basement/cellar referenced by witnesses).
Admissibility of evidence concerning the parties' treatment of the contract: The plaintiff introduced evidence (including a power of attorney to Kelly, the company's attorney-in-fact, and Kelly's audit showing payroll entries and premiums collected for work at the building) that tended to show the garnishee had examined and audited the job and had collected premiums applicable to that job. Kelly testified that, "for insurance purposes," he considered the building one, two, three stories and a basement in height. The court admitted this evidence over objections, reasoning that parties are free to give contractual terms a peculiar meaning by usage and that such treatment and interpretation by the parties (and by an authorized agent) is admissible to show how the parties understood and applied the expression "three stories and basement."
Ambiguity and the proper decision-maker: The court rejected the garnishee's position that the policy wording was unambiguous as a matter of law (relying on Meissner as cited by the garnishee). Instead, the court found the evidence sufficient to show the terms were ambiguous in their practical application to this building and that evidence of the parties' treatment of the contract (including the agent's audit and premium collection) made the question one for the jury. The court emphasized that words may acquire technical significance by custom and usage, and that parol evidence of the parties' treatment is competent to explain such terms.
Instructions and the scope of the jury question: The court reviewed the instructions given. It noted the court modified the defendant's requested Instruction No. 1 by adding a parenthetical clause referencing the question whether the garnishee "by its actions, conduct and collections of premiums construed and treated the building covered by the policy as a three-story building." The court reasoned that the instructions submitted the factual question to the jury — whether the building exceeded three stories and basement in height and, separately, whether the garnishee had construed and treated the building as within the policy. The court treated the issue as one of the parties' treatment of the contract, not as a pure estoppel question, and found the instruction set appropriate.
Estoppel/waiver pleadings: The court addressed the garnishee's contention that plaintiff had not pleaded waiver or estoppel and therefore could not rely on the garnishee's collection and retention of premiums. The court observed that the garnishee itself introduced evidence about definitions of "basement," and that Kelly's testimony was received as tending to show interpretation (not an attempt to create a new contract or cause of action). The court further clarified that the instructions did not submit estoppel to the jury, but the parties' treatment of the contract.
Final conclusion: Considering the admissible evidence of the parties' interpretative conduct, the authorized agent's participation, and the fact questions submitted by the instructions, the court concluded that the jury was properly permitted to decide whether the building was within the policy's terms as the parties understood them. The court overruled the garnishee's demurrer to the evidence and affirmed the judgment for plaintiff against the garnishee.

Holding and Implications

Holding:

AFFIRMED.

The Supreme Court of Missouri affirmed the circuit court's judgment for the plaintiff against the garnishee. Concretely, the judgment against the London Lancashire Indemnity Company of America in favor of Arthur Peters (the plaintiff) in the garnishment proceeding — which had resulted in a recovery up to the policy limit of $10,000 — was affirmed.

Implications:

The direct effect is that the garnishee remains liable to the extent of its policy limit to satisfy the underlying judgment by plaintiff, as determined by the jury and entered by the circuit court.
The court's opinion emphasizes that (a) service upon the deputy superintendent pursuant to statute is valid, (b) an insurer's authorized agent's interpretative treatment and collection of premiums may be admissible to show how the parties understood contractual terms, and (c) where the meaning of policy language is ambiguous in context, the issue may be for the jury rather than for the court as a matter of law.
The opinion does not announce or predicate the outcome on the creation of a new legal doctrine; rather it applies established principles concerning waiver, agency, custom and usage in contract interpretation and leaves resolution of the factual dispute to the jury. No new controlling precedent beyond the court's factual application and interpretive emphases is established in the opinion.

Opinion authored by Presiding Judge White. Judgment affirmed; all concur.

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ARTHUR PETERS v. ROBERT FLEMING, Defendant, THE LONDON LANCASHIRE INDEMNITY COMPANY OF AMERICA, Garnishee and Appellant.

Wilbur C. Schwartz and Charles E. Morrow for appellant.

(1) The circuit court acquired and had no jurisdiction of the subject-matter of this garnishment proceeding, for the reason that the writ of garnishment was not served upon the superintendent of insurance as provided by statute, and the court erred in holding that it had jurisdiction. Secs. 6085, 6310, R.S. 1919. (2) The wording of the coverage clause of the contract and policy is clear and unambiguous. The plaintiff's evidence did not show that it covered the building in question, or the work being performed thereon by Fleming at the time plaintiff was injured. All the evidence shows that the building in question was not covered by the policy and it should have been so declared by the court as a matter of law. Meissner v. Ry. Equip. Co., 211 Mo. 112. The construction of the policy was one of law for the court and not one of fact for the jury. Meissner v. Ry. Equip. Co., 211 Mo. 112. (a) The plaintiff could not institute a garnishment proceeding against Fleming under the provisions of the policy in question, because it is alleged by plaintiff that Fleming was insolvent and the policy provides that the insolvency or bankruptcy of the assured shall not release the company from payment of damages for injuries sustained or loss occasioned during the life of the policy, but an action may be maintained by the injured person against the company under the terms of the policy. (3) The court erred in admitting over the objection of the garnishee the evidence of the witness Kelly and the witness Fleming to the effect that after the plaintiff was injured the garnishee had collected premiums on the work on the building in question including the payroll covering plaintiff's wages at the time he was injured. The language of the coverage clause of the policy is unambiguous and should have been construed and declared as a matter of law by the court. Meissner v. Ry. Equip. Co., 211 Mo. 112. (4) The court erred in admitting the evidence of the witness Kelly that the building in question was a three-story building for "insurance purposes." (5) The court should not have submitted the construction of the policy to the jury. Meissner v. Ry. Equip. Co., 211 Mo. 112. There was no evidence in this case tending to prove that the garnishee construed and treated the building in question as a three-story building prior to the injury of the plaintiff. (6) The court erred in refusing to give Instruction 1, requested by the garnishee as asked, and erred in giving the same as modified. The construction of the policy was a question of law for the court. Meissner v. Ry. Equip. Co., 211 Mo. 112.

Murtha J. Hackett and James J. O'Donohoe for respondent.

(1) The circuit court had jurisdiction of the subject-matter of this garnishment proceeding, because the writ of garnishment was served upon the deputy superintendent as provided by statutes. The deputy possesses no power derived from the superintendent; rather they come to him by virtue of statutes. Secs. 5673, 5894, 5895, R.S. 1929; Kurre v. Am. Indemnity Co. (Mo. App.), 17 S.W.2d 685. (2) The building in question was three stories and basement in height and no more. Webster's New Int. Dict.; Bouvier's Law Dict.; Cent. Dict. Ency.; 7 C.J. 933; Funk Wagnall's New Standard Dict. Moreover, the policy considered in its details and entirety does not limit coverage to buildings three stories and basement in height. (3) At the time of the accident assured and respondent were engaged in masonry work. The word "masonry" is not a specific term, but is generic and includes tuckpointing and terra cotta work. The words "masonry" and "tuckpointing" are synonymous. Joseph N. Eisendrath Co. v. Gebhardt, 124 Ill. App. 325; Webster's New Int. Dict. (4) Failure to defend the damage suit and disclaiming liability constituted a breach of the insurance contract upon appellant's part and put an end to the defenses based upon the number of stories and class of work being performed by assured and respondent at the time the latter was injured. Goerss v. Indemnity Co. of America (Mo. App.), 3 S.W.2d 272, writ quashed, en Banc, in State ex rel. v. Daues, 13 S.W.2d 1059; Brucker v. Georgia Cas. Co., 32 S.W.2d 1091. (5) By holding on to the premiums collected for wages paid by assured for work upon the building in question, appellant waived the right to defend on the ground of height of building or that the work done did not come within the coverage of the policy and estoppel itself from doing so. Neither defense is available for those reasons alone. Block v. U.S. Fid. Guar. Co., 316 Mo. 296; Goffe v. Nat. Surety Co. (Mo.), 9 S.W.2d 929; Malo v. Fire Ins. Co., 282 S.W. (Mo. App.) 78; 5 Cooley's Briefs on Ins.2d 4325. (6) Before this action was instituted, appellant put nonliability on the ground that the "building was more than three stories and basement in height," and upon that ground alone. And if there is any proposition more firmly established than any other, it is that "An insurance company, when sued upon a policy, cannot, after the beginning of suit, make any objections to paying the loss that are different from or additional to those which it stated before." Shearlock v. Mut. Life, 193 Mo. App. 430; Castner v. Ins. Co., 50 Mich. 273; Wolf v. District Grand Lodge, 102 Mich. 23; Brink v. Ins. Co., 80 N.Y. 108; Smith v. Ins. Co., 107 Mich. 270; Taylor v. Columbian League, 135 Mich. 231; Ins. Co. v. Allen, 128 Ala. 451; Snyder v. Mystic Circle, 122 Tenn. 248; Ins. Co. v. Waugh, 60 Neb. 348; McCormich v. Ins. Co., 163 Pa. 193, 194; Western A. Pipe Lines v. Ins. Co., 145 Pa. 346; Mitchell v. B. of L.F. E., 103 Neb. 791; Ins. Co. v. Elliott, 60 Ind. App. 112; Ins. Co. v. Ray, 196 Ala. 425; Ward v. Ins. Co., 69 Or. 347; Milling Co. v. Ins. Co., 127 Iowa 314; Jacobs v. Sugar Refinery Co. (N.Y.), 115 A.D. 499; Strasburger Co. v. Bonwit (N.Y.), 174 A.D. 215.

1. INDEMNITY INSURANCE: Garnishment: Process. Where an employee obtained judgment for personal injuries against his employer and proceeded by garnishment against a liability indemnity company the service of the writ of garnishment upon the deputy superintendent of insurance gave the court jurisdiction of the garnishee, such service being provided for by Section 5895, Revised Statutes 1929.

2. ____: ____: ____: Waiver of Service. The garnishee having filed answer to the interrogatories was not in a position to question the jurisdiction.

3. ____: Liability Policy: Jury Question. Where the indemnity policy provided that the insurer's liability should apply to employments in buildings "not exceeding three stories and basement in height" the issue of whether the building was of greater than that height was a question for the jury.

4. ____: ____: ____. Where the indemnity company's agent by his interpretative treatment of the contract included the building as within terms of the policy the jury was authorized to find it so.

5. ____: Contractual Terms: Custom and Usage. Circumstances cause terms to acquire technical significance different from the ordinary meaning.

6. ____: Interpretation by Parties. Parties to a contract may give a peculiar meaning to terms applied to the subject-matter and are bound by such meaning.

7. ____: ____: Instructions. Instructions to the jury submitting the question of the height of a building, directing that the jury might disregard the actual height if they should find that the indemnity company treated the building as within the terms of its contract, did not submit the question of an estoppel but a question of the parties' treatment of the contract.

WHITE, P.J.

Plaintiff Arthur Peters, as an employee of defendant Robert Fleming, recovered judgment December 28, 1927, for $15,000 on account of personal injuries sustained September 15, 1925. Execution was issued upon that judgment and the Indemnity Company of America summoned as Garnishee. Upon the issues made up by the garnishee's answer to plaintiff's interrogatories, plaintiff's denial and garnishee's reply a trial was held resulting in a judgment in favor of the plaintiff and against the garnishee for $10,000, the limit of garnishee's indemnity policy in favor of Fleming. The appeal is from that judgment.

I. The garnishee makes the point that the court obtained no jurisdiction of the subject-matter of this action because the writ of garnishment was not served upon the Superintendent of Insurance but upon his deputy. The garnishee is not in position to urge the objection; it did not object to the jurisdiction of the circuit court in that court. It filed its answer to the interrogatories and went to trial upon the issues tendered.

Besides, under Section 5895, Revised Statutes 1929, service upon the deputy in case of the absence, etc., of the Superintendent, is made valid service. The return of the sheriff recites that the Superintendent of Insurance was absent and therefore service was had upon the deputy.

II. The appellant further claims that the indemnity policy sued on did not cover the building nor the work performed thereon by the defendant Fleming at the time and place where the plaintiff was injured.

The policy agrees to indemnify the assured (Fleming) against loss by reason of the liability imposed upon him for damages caused or bodily injuries suffered by any employee or employees of the insured, as the result of any accident "at a location named in the declarations or elsewhere and due to or caused by the operation of the trade or business of the assured as described in the declarations and conducted at the locations named therein."

It seems conceded that the declarations included the apartment building at 4616 Lindell Avenue in the city of St. Louis. To the policy is attached a rider "for the purpose of furnishing additional space for description of business operations and premium rates for work," etc. It contains this clause:

"Kind of Trade, Business, Profession or Occupation (Manual Classification) — 1. Contractors — Building private residences, flats or apartments, with or without stories, one story stores and stores with offices above, private stables and private garages, and buildings not mercantile or factory, all not exceeding three stories and basement in height (no blasting), excluding the erection of churches, theatres, railroad stations, round houses, court houses, city halls and capitol buildings."

The defendants introduced some photographs of the building at 4616 Lindell which it is claimed show the building was four stories high instead of three stories and basement. The photograph of the front of the building shows the first floor is of stone, the three floors above of brick; the side of the building shows except at the front four floors of brick. Whether or not there were more than three stories or a basement turns largely upon the meaning of the word "basement." Respondent cites some authorities including 7 Corpus Juris, 933, and the dictionaries to the effect that a basement is the lower part of a building. It may be partly below the ground. One of the witnesses said a basement was anything below the floor level or street level. Others declared a basement was the lowest part of a building and was generally partly below the street level. None of the witnesses qualified as experts on the meaning of the word "basement." It was testified that the front fifty feet of the first floor was on a level with the walk and 150 feet in the rear was below the level of the ground. Under that rear 150 feet was a sub-basement or cellar which the garnishee claimed was the basement. It asserted that the first floor which the plaintiff called the basement was one story above the basement.

The garnishee claimed that the evidence conclusively showed the building to be four stories high and it therefore did not come within the terms of the rider to the policy. The plaintiff contended that it was a question for the jury whether the house was three stories and a basement as the matter was understood by the parties to the contract; that the parties treated the contract as covering the building at 4616 Lindell; Fleming paid and the Company received premiums upon the insurance policy with respect to the employees upon that building and the garnishee not only collected the premiums but retained those premiums even after the suit was brought.

In support of this point the plaintiff introduced a power of attorney from the Garnishee Company to Joseph P. Kelly, Jr., making him "its true and lawful agent and attorney-in-fact to make, execute, seal and deliver for and on its behalf, as surety, and as its act and deed, where required, any and all policies, bonds, recognizances, contracts of indemnity and all other writings obligatory in the nature of a bond, recognizance or conditional undertaking. . . .

"It is understood that any bond, executed under this power required in any State which has a resident agent's law, shall be countersigned by a licensed agent of the company, residing in the State where the bond is required.

"And the execution of such instruments, in pursuance of these presents, shall be as binding on said company, as fully and amply, to all intents and purposes, as if they had been duly executed and acknowledged by the regularly elected officers of the company in their own proper persons."

The policy had the usual provisions about its obligation to defend any suit against assured on account of injuries, the giving of notice by the assured when sued; aiding in a settlement when requested; a no-action clause to the effect that no action should lie against the Company until the amount of damages is determined either by final judgment against the assured or by agreement of the parties with the written consent of the company.

The policy further provided that if the assured should make any structural or unusual alterations of the structure or premises or of the plant described, that the policy should cover such operations, except . . . etc.

It also provided that the assured, whenever requested by the company should furnish the company with a written statement of the entire amount of compensation earned by all persons engaged in the operations covered by this policy, which statement should be divided so as to show the amount of compensation earned in each of the classifications described in the declarations.

The declarations mentioned in the policy stated the date and duration of the policy and under "the locations of the factories, buildings," etc., was this: "St. Louis and elsewhere in the State of Missouri." It seems that that comprehensive statement was made more definite by the audit of the company's attorney-in-fact.

There is a further provision that if complete and accurate pay roll records are not kept by assured so as to show the divisions thereof according to the foregoing classification, of the entire, actual pay roll shall be considered to have been expended under the highest rate of classification.

The indefinite statement in the declarations seemed to have been clearly understood by the parties in the trial of the case, for they did not attempt to make it clearer except as it appears in the testimony of Kelly, Garnishee's attorney-in-fact who had full authority with respect to the contract. Apparently it was his duty to examine and make an audit of the insured's accounts. Kelly at first identified a paper marked "Exhibit G" which was not offered in evidence. It designated the Carlton Apartment job 4616 Lindell Boulevard, with Kelly's signature attached. He said the pay roll there was audited quarterly and this paper showed the audit of the accounts relating to that apartment. He had collected the premiums on the policy that covered the Carlton apartments. The audit was made October 10, 1925. The name of Arthur Peters, plaintiff, appears in the audit, showing his pay for sixteen hours. The premium was collected for the end of the quarter which included all work "on this job" and any other jobs in that quarter. The witness was unable to tell the percentage he collected on the pay rolls of that particular job, that the policy contained the rate but he collected the premium which was probably $3.32 per hundred. The witness found in his audit a pay roll expenditure on this building of $364, for five weeks, and a premium of $11.08 collected on that specific job. The initial premium on the policy of $47.50 was paid. No part of the premium paid for insuring the workmen on this particular job was ever returned.

Mr. Kelly testified further that he had been through the Carlton Apartments, and that he thought the first floor was the basement; that is, the floor where you enter on a level with the walk in front. That was objected to with no ruling on the objection. Defendant's attorney suggested the witness should describe it. The witness then said:

"If I describe it I will describe it for insurance purposes," and then over the objection and exception of the defendant he said: "It is one, two, three stories and basement in height."

The court modified and gave on behalf of the plaintiff Instruction No. 2:

"No. 2

"The court instructs the jury that it makes no difference whether the building, 4616 Lindell Boulevard, known as `Carlton Apartment' is now or was, at the time garnisher (plaintiff) was injured, three four or more stories in height; and in arriving at your verdict you are not to take into consideration the number of stories of said apartment but you are to disregard the same (if you further find that the garnishee, the Indemnity Company construed and treated said building as a three-story building prior to the injury to plaintiff, Peters)."

The part in parenthesis was added by the court.

And on behalf of defendant it gave Instruction No. 1, as follows:

"No. 1

"The court instructs the jury that if you find and believe from the evidence that the building mentioned in the evidence, upon which the plaintiff was working at the time he claims to have been injured, exceeded three stories and basement in height, then the plaintiff is not entitled to recover herein against the garnishee and your verdict should be that the London and Lancashire Indemnity Company of America, garnishee herein, is not indebted to the defendant, Robert Fleming (unless you further find that the garnishee, the London and Lancashire Indemnity Company, by its actions, conduct and collections of premiums construed and treated the building covered by the policy as a three-story building)."

The instruction as asked by garnishee did not contain the part we put in parenthesis which was added by the court, over the garnishee's objection and exception.

The defendant also asked an instruction to the effect that the word "basement" means the ground floor of a house or other building beneath the upper story, wholly or partly sunk below the level of the ground, which instruction the court refused.

From these instructions given the court left it to the jury to determine whether the building was more than three stories and a basement in height. The appellant could not complain of that because its instruction as asked presented that issue. It was not presented by the plaintiff.

Thus the issue was squarely put to the jury to determine whether the garnishee company and the plaintiff treated the building as a three-story building. It is claimed by the appellant that the contract is unambiguous because the meaning of "basement" is clearly defined and there could be no two opinions as to its application to this building, that it was conclusively a four-story building and not a building of three stories and basement; garnishee presented a demurrer to the evidence on that theory.

Many words and phrases employed in contracts have acquired definite meanings by judicial construction. [13 C.J. 532-4.] These expressions, contractual terms, usually go to the scope and obligation of a contract. On the other hand, words by custom and usage acquire a technical significance entirely different from their ordinary meanings. [14 C.J. 498-9; Soutier v. Kellerman, 18 Mo. 509-11; Snoqualmi Realty Co. v. Moynihan, 179 Mo. l.c. 643; Landau Grocery Co. v. Hart, 223 S.W. 793.] Further, parties to a contract may give a peculiar meaning to terms applied to the subject-matter of their contracts and their intention so to do may be shown by parol and by their treatment of the contract. The parties to this contract had a right to call the first floor a basement if they wanted to whether it was generally so understood or not.

While Mr. Kelly's statement that for insurance purposes the building was three stories and a basement, may be insufficient to show a custom, which we do not decide, he was authorized to act for the company in interpretative treatment of the contract. His evidence tended to show how the parties understood and applied the expression "three stories and basement." The evidence was sufficient to show that those terms as generally understood were ambiguous so as to permit evidence as to how the parties treated and understood the contract, and that this building was treated as covered by the policy. The garnishee received all the advantages of the contract, as so interpreted, and declined to repay the money which it collected by reason of insuring the defendant against liability for injuries to employees working on that particular building. The issue was properly submitted to a jury. There was no error, therefore, in refusing the garnishee's offered instruction defining basement when many other definitions somewhat different were shown, and no error in overruling garnishee's demurrer to the evidence.

III. Appellant claims that the plaintiff did not plead waiver or estoppel and therefore could not be heard to say that the actions of the garnishee in collecting premiums and failing to return them is a defense, on the theory that estoppel cannot create a contract nor a cause of action.

The appellant itself in the first place introduced evidence of definitions of "basement." The court admitted Kelly's evidence because it tended to show that the garnishee's collection of the premium which covered those Carlton Apartments was contemplated by the policy. The evidence did not show an attempt to create a contract or cause of action. It tended to show interpretation of the policy. The instructions did not submit the question of estoppel, but the question of the parties' treatment of their contract.

The judgment is affirmed. All concur.

PETERS v. FLEMING