Opinion
Gen. No. 44,000.
Opinion filed April 21, 1947. Released for publication May 5, 1947.
1. INSURANCE, § 87 — rule of liberal construction in favor of insured. Rule, that insurance policies are construed liberally in favor of insured, is merely general rule of construction applied to contracts prepared by one of parties.
See Callaghan's Illinois Digest, same topic and section number.
2. INSURANCE, § 86fn_ — principles applicable to interpretation and construction. Principles applicable to interpretation and construction of insurance policies do not differ from those governing other contracts.
3. INSURANCE, § 86.3fn_ — construction of policy and rider. Primary purpose of construction of insurance policy and rider attached thereto is to give effect to intention of parties, and policy and rider must be construed together and, whenever possible, effect must be given to every word, term and condition in each.
4. INSURANCE, § 134fn_ — rider extending policy to cover liability as carrier as also extending risks or hazards. Rider, attached to insurance policy limiting hazards insured against and excluding goods in possession of insured as carrier, extending policy, subject to all its terms and conditions, to cover insured's liability as carrier, and which concluded with words, "all other terms and conditions remain unchanged," extended policy only as to goods covered and not as to risks or hazards, and therefore rider did not extend policy to cover damage to vegetables, as consequence of abandonment of insured's truck, which did not result from hazards insured against by original policy.
5. INSURANCE, § 133.1fn_ — spoilage of vegetables as within provision excluding loss or damage to goods by delay or being "rotted." Spoilage of vegetables, as result of exposure to elements in midsummer for about one week when truck was abandoned by insured's employee, fell within purview of provision in insurance policy excluding loss or damage to goods by delay or being "rotted," as against contention that "spoiled" and "rotted" are not synonymous.
Appeal by defendant from the County Court of Cook county; the Hon. DEWEY MONTGOMERY, Judge, presiding. Heard in the first division of this court for the first district at the February term, 1947. Reversed. Opinion filed April 21, 1947. Released for publication May 5, 1947.
QUERREY HARROW, of Chicago, for appellant; JOHN KENNEDY and JOSEPH HARROW, both of Chicago, of counsel.
HARRY G. FINS, of Chicago, for appellee.
Defendant appeals from a judgment against it entered on an insurance policy issued to one Thomas Bekiaris, hereafter called the insured. No question of fact is involved.
The original policy insured lawful goods and merchandise consisting of wholesale produce, the property of the insured or sold by them in course of delivery while in the custody of the insured and actually in transit, and only while contained in or on certain motor trucks owned or operated by the insured. The insurance was against loss or damage directly caused by:
"5. (a) Fire, including self-ignition and internal explosion of the conveyance, and lightning; (b) Flood, meaning rising navigable waters; (c) Cyclone and tornado; (d) Perils of the seas, lakes, rivers and/or inland waters while on ferries only; (e) Collision, i.e., accidental collision of the truck or trucks during the period insured with any other automobile, vehicle or object; (f) Overturning of the motor truck; (g) Collapse of bridges." It was specifically provided that the policy did not insure, "6. (b) Goods carried by the Insured under a contract or agreement of hauling or as bailee for hire," and, "(f) Loss or damage to goods by delay, wet or dampness, or by being spotted, discolored, mouldy, rusted, frosted, rotted, soured, steamed or changed in flavor except the same is the direct result of a peril insured against." Shortly thereafter a rider was attached to the policy reciting: "This policy, subject to all its terms and conditions, is hereby extended to cover the Insured's liability as a carrier for loss or damage to lawful goods and merchandise as described herein, while contained in or on the within described truck or trucks owned and operated by the Insured and while in the custody and control of the Insured temporarily in any building during due course of transfer to other vehicles; but this policy to cover only while such goods are actually, in transit, and in no event shall this policy cover any goods after same has ceased to be at the risk of the Insured, covering only within the limits of the United States and Canada. In the event that the Insured's goods and merchandise of others as described herein are loaded on any one vehicle at the same time, the Company's combined liability shall be limited to the amount of insurance applying to such vehicle. All other terms and conditions remain unchanged."
Thereafter the insured received from plaintiff a load of vegetables to be transported for hire from Chicago to Columbus, Ohio. The shipment was not delivered at destination. The truck with the load of vegetables, spoiled and unfit for consumption, was found abandoned near Columbus about a week later. Plaintiff brought suit against the insured to recover its loss. Defendant, denying liability under its policy, refused to defend and judgment was entered in favor of plaintiff and against the insured. Thereafter insured assigned to plaintiff his rights, title and interest in and to his chose in action against defendant under the insurance policy and this action was instituted, judgment for plaintiff being entered on the pleadings.
Plaintiff contends that by the rider the policy was "extended to cover the insured's liability as a carrier for loss or damage to lawful goods and merchandise." Defendant insists that the rider merely extended the policy to cover loss or damage to goods from the hazards specified in the policy while being transported by insured for hire. The rule that insurance policies, having been prepared by the insurer, are construed liberally in favor of the insured, is merely the general rule of construction applied to contracts prepared by one of the parties. The principles applicable to the interpretation and construction of insurance policies do not differ from those governing other contracts. Old Colony Life Ins. Co. v. Hickman, 315 Ill. 304. The policy and rider must be construed together and, whenever possible, effect must be given to every word, term and condition in each. The primary purpose of the construction is to give effect to the intention of the parties. The original policy was limited as to the goods insured and the hazard insured against. It covered only goods owned by the insured or goods sold by him and in course of delivery. It specifically excluded goods carried by the insured under a contract or agreement of hauling or as bailee for hire. This excluded liability for goods in the custody or possession of the insured as a carrier and exempted defendant from liability for loss and damage to plaintiff's goods. The extension made by the rider was not unlimited and without condition. The rider commenced: "This policy, subject to all its terms and conditions, is hereby extended to cover the Insured's liability, as a carrier for loss or damage to lawful goods and merchandise as described herein, while contained in or on the within described truck or trucks owned and operated by the Insured" etc., and concludes, "All other terms and conditions remain unchanged." Nowhere in the rider is any term or provision enlarging or extending the hazards insured against. Therefore the policy must be construed as extended only as to the goods covered by the policy and not as to the risks or hazards insured against. The damage resulting to the vegetables from the abandonment of the truck by insured's employee did not result from any of the hazards covered by the policy.
Plaintiff attaches much importance to the fact that defendant by its answer admitted that "the goods were spoiled and in a condition unfit for consumption," and denies that spoilage of the vegetables is within the provisions of 6 (f), which exempted from liability loss or damage to goods by delay or by being rotted, etc., claiming that "spoiled" and "rotted" are not synonyms. In taking this position counsel is indulging in the lawyer's favorite pastime of quibbling over the meaning of words. Every person has known from early childhood that rotting, to the extent of rendering them unfit for consumption, is a natural consequence of exposing packed vegetables to the elements in midsummer in this climate for a week or more. Such vegetables are spoiled.
The judgment is reversed.
Reversed.
O'CONNOR, P.J., and FEINBERG, J., concur.