Bauerle v. State Farm Mut. Auto. Ins. Co. of Bloomington, Ill.

• Decision Date: 20 September 1967
• Docket Number: No. 8315,8315
• Citation: 153 N.W.2d 92
• Parties: Myrtle BAUERLE, Plaintiff and Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY OF BLOOMINGTON, ILLINOIS, acorporation, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 92

153 N.W.2d 92

Myrtle BAUERLE, Plaintiff and Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY OF BLOOMINGTON, ILLINOIS, acorporation, Defendant and Appellant.

Civ. No. 8315.

Supreme Court of North Dakota.

Sept. 20, 1967.

Syllabus by the Court

1. Where provisions of a contract of insurance are susceptible of two equally reasonable constructions, one favorable to the insurer and the other to the insured, the latter will be followed.

2. An insurance contract, like any other contract, is to be construed according

to the sense of the words that are used in the contract.

3. A truck acquired for use on a 'commercial farm' by a person listing his occupation as 'farmer' is a commercial automobile under the terms of the insurance policy.

4. The test in construing the term 'commercial' is the character of the use of the vehicle taken into consideration with its form.

5. An insurance contract should be viewed in the light of the circumstances and conditions prevailing at the time it was executed.

Melvin Christianson, for Foughty & Christianson, Devils Lake, for plaintiff and respondent.

Mart R. Vogel, of Wattam, Vogel, Vogel, Bright & Peterson, Fargo, for defendant and appellant.

CLIFFORD JANSONIUS, District Judge.

This matter comes before the Court on a stipulation of facts and evidence contained in several depositions. The facts, while rather complex, are only in dispute so far as the use of the truck is concerned and whether or not it should be defined as a 'commercial automobile' and within the exclusionary provisions of an insurance policy. At the time of the accident resulting in the death of plaintiff's husband, it is admitted that the decedent was returning home after hauling a load of grain from decedent's farm to the elevator.

After the first decision of the trial court, the case was reopened and the evidence of Duane Bauerle and John Bauerle was taken by deposition. This was directed to the use made of the vehicle, which avowedly was a truck equipped with a hoist, and suitable for the general farm purposes of the deceased.

It is admitted that there were other vehicles on the farm which were passenger automobiles, but if a recovery is to be had, it would have to be under the policy covering a 1956 four-door Ford automobile, the policy being Exhibit A attached to the amended answer, and it being the only policy providing death benefits.

The insurance policy provides in part as follows:

'INSURING AGREEMENT IV--AUTOMOBILE DEATH INDEMNITY, SPECIFIC DISABILITY AND TOTAL DISABILITY INSURANCE COVERAGES

Division 1--Death Indemnity. To pay the principal sum ($5,000.00) stated as applicable in the exceptions of the declarations in event of the death of each insured which shall result directly and independently of all other causes from bodily injury caused by accident and sustained by the insured while occupying or through being struck by an automobile, provided the death shall occur within 90 days from the date of such accident.'

Said insurance policy further provided in part, as follows:

'EXCLUSIONS--INSURING AGREEMENT IV

Insuring Agreement IV does not apply:

(a) to bodily injury sustained in the course of his occupation by any person while engaged

(1) in duties incident to the operation, loading or unloading of, or as an assistant on, a public or livery conveyance, commercial automobile, ambulance, fire truck, police car or other emergency vehicle, or

(2) in duties incident to the repair or servicing of automobiles;'

That said insurance policy further provided as follows:

'DECLARATIONS (continued from page 1)

1.--5 * * *

6. The purposes for which the owned automobile is to be used are 'pleasure and business' unless otherwise stated in the exceptions.

(a) the term 'pleasure and business' is defined as personal, pleasure, family and business use.

(b) The term 'commercial' or 'commercial-farm' is defined as use principally in the business occupation of the named insured as stated in the exceptions, including occasional use for personal, pleasure, family and other business purposes.'

The policy on the truck operated by the decedent states on its face the use to which the vehicle was to be put and the business of the insured as follows: 'Use in commercial farm, occupation farmer'.

It is therefore obvious that the parties were aware of the fact that the truck was one being used commercially.

The issue in this case is whether or not the exclusionary provisions of the policy will preclude recovery by the plaintiff and becomes involved because of the fact that there is no dispute in regard to the following:

1. The decedent was returning from hauling a commercial farm load to the elevator;

2. The vehicle in which decedent was riding at the time of his death was insured under a policy for 'use, commercial farm; occupation, farmer'.

3. The vehicle was equipped with a commercial hoist which is something that could only be used in transporting a commodity as distinguished from special equipment used to transport persons.

4. The vehicle was used by the decedent and his children at times in getting the mail, visiting friends and neighbors, and non-economic personal activities.

In the case of St. Paul Fire and Marine Insurance Company v. Kell, 231 Ark. 193, 328 S.W.2d 510, the policy was similar to the one involved in this case, insofar as using the phrase 'use principally in the business occupation of the named insured'. The Court in this case, however, was confronted with a different set of facts:

'It is undisputed that at the time this accident occurred appellee was using the vehicle for transportation to the job site the same as he would a private automobile, and was not using the truck to perform any duties incident to his occupation.'

This case also differs from the cases reported because the deceased was covered by two policies written by the same company on separate vehicles and is further confused by the fact that while he was operating the truck when killed, the claim is made under the provisions of his automobile policy, the truck policy containing no death benefits.

Policy No. 436 154--B30--34 was on the Ford 1948 and box, which is the truck, and the use is set out as 'commercial farm, occupation farmer'.

Both of the policies appear to be identical except for the death benefits provided by the car policy.

Subsection (a) of the exclusions under insuring agreement 4 of both policies reads as follows:

'To bodily injury sustained in the course of his occupation by any person while engaged (1) in duties incidental to the operation, loading, or unloading of * * * commercial automobile.'

Under the stipulated facts it is agreed that the decedent, Richard Bauerle, was an insured individual under Policy 453 964--F22--34. Under coverage S, insuring agreement 4, insured was covered for the sum of $5,000 in the event of death by accident sustained by him while occupying, or through being struck by an automobile. Insuring agreement 4 does not apply. '(a) to bodily injury sustained in the course of his occupation by any person while engaged (1) in duties incident to the operation, loading or unloading of * * * commercial automobile'.

Item 6 of the policy declarations is as follows:

'The purposes for which the owned automobile is to be used are 'pleasure and business' unless otherwise stated in the exceptions. (a) the term 'pleasure and business' is defined as personal, pleasure, family and business use. (b) the term 'commercial' or 'commercialfarm' is defined as use principally in the business occupation of the named insured as stated in the exceptions, including occasional use for personal, pleasure, family and other business purposes.'

The issue resolves itself down to whether or not the 1948 Ford one and a half ton truck belonging to the deceased, Richard W. Bauerle, was a commercial automobile within the meaning of Policy No. 453 964--F22--34 excluding coverage for death sustained by any person while engaged in duties incident to the operation of a commercial automobile.

A review of the cases indicates that the prevailing rule governing the construction of contracts of insurance is that where a provision of the contract is susceptible to two equally reasonable constructions, one favorable to the insurer, and the other to the insured, the latter will be followed.

St. Paul Fire andMarine Insurance Co. v. Kell, 231 Ark. 193, 328 S.W.2d 510.

In the case of Schmitt v. Paramount Fire Insurance Company, 92 N.W.2d 177, this Court stated:

'An insurance contract, like any other contract, is to be construed according to the sense or meaning of the words that are used in the contract. 44 C.J.S. Insurance § 294, p. 1155. While the language of the contract should not be strained in...