Continental Cas. Co. v. Warren, A-3713

Citation152 Tex. 164,254 S.W.2d 762
Decision Date28 January 1953
Docket NumberNo. A-3713,A-3713
CourtSupreme Court of Texas

Kemper & Wilson and W. L. Kemper, Houston, for petitioner.

Woodul, Arterbury & Wren, Houston, for respondent.

GARWOOD, Justice.

The matter at issue here is whether the death of an aeroplane pilot in an accidental crash of the plane under his control is within the coverage of an aeroplane accident insurance policy issued by the petitioner-defendant Continental Casualty Company. The trial petition of respondent-plaintiff, Mrs. Audie Warren, widow of the pilot, seeking recovery under the policy and disclosing all the relevant policy terms and other facts, was met by an appropriate exception on the part of the petitioner-defendant insurer, which, being sustained by the trial court, resulted in a dismissal of the suit upon refusal of Mrs. Warren to amend. The Ft. Worth Court of Civil Appeals reversed this judgment and remanded the case 'for further trial not inconsistent with this opinion.' 248 S.W.2d 315, 317.

The policy was issued to a business firm, Callery & Hurt, Inc., which owned the aeroplane in question and employed pilot Warren to operate it. Generally speaking, the insurance provided indemnity to the policyholder up to the principal amount here in suit for loss incident to injury (including death) of its officers, employees or guests, resulting from operation of the aeroplane. Following the crash, Callery & Hurt, Inc., demanded payment under the policy and, upon failure of the petitioner-defendant to comply, assigned its rights to the respondent-plaintiff. The only question presented to us is whether the claim is without the policy coverage because pilot Warren was killed while piloting the plane as distinguished from being merely transported therein.

The more critical provisions (with certain portions italicized by us) read:

'That it will indemnify the employer for loss resulting from injury sustained by any officer, employee or guest of the employer (herein individually called insured person); to the extent herein provided.

"Injury' wherever used in this policy means bodily injury caused solely by an accident occurring while the policy is in force and resulting directly and independently of all other causes in loss covered by the policy, provided such injury is sustained by the insured person in consequence of riding as a passenger in, boarding, alighting from, making a parachute jump from (for the purpose of saving his life) or being struck by the twin engine six passenger-place Beechcraft Aircraft D18S, License NC 80496, owned by the employer, which aircraft at the time of the accident is flying with the consent of the Employer in or between the Continental United States, Mexico and Canada and is piloted by a person who holds a valid and current certificate of competency of a rating authorizing him to do so.'

Further on in the policy there is a special 'Part' or chapter entitled 'Exclusions,' which in brief disclaims coverage for any 'loss' resulting from suicide, war, military or naval service, 'accident occurring while the aircraft herein described is carrying passengers for hire,' and certain types of flying such as acrobatic, stunting, racing and endurance testing. Neither in this nor any other part of the policy is there language which could fairly be described as categorically excluding the pilot or any class of 'insured person' ('officer, employee or guest of the employer') within which a pilot would necessarily fall, nor, more certainly, is there any provision directly and expressly limiting coverage under the policy generally to such an officer, employee or guest as should at the same time be a 'passenger' of the plane. There is, however, a provision limiting the indemnity to $25,000 'as to each insured person' and to six times that sum ($150,000) as to any one accident, and a recital that the premium is based on a rate of $125 'for each passenger place' in the plane and that this totals $750, or six times $125.

But for the fact that insurance policies are governed by the special rule of construction, which is a familiar part of our jurisprudence, we might, indeed, hold either that the interpretation against liability of the insurer should prevail or that, the policy being ambiguous, there is a fact issue as to what was intended. Yet the rule, of course, applies, and under it the insurer may not escape liability merely because his or its interpretation should appear to us a more likely reflection of the intent of the parties than the interpretation urged by the insured. The latter has to be no more than one which is not itself unreasonable. Lloyds Casualty Insurer v. McCrary, 149 Tex. 172, 179, 229 S.W.2d 605, 609. A related or subsidiary rule is 'that exceptions and words of limitation will be strictly construed against the insurer.' Providence Washington Ins. Co. v. Proffitt, Tex., 239 S.W.2d 379, 381. For all the particular considerations reasonably indicating that the pilot is not covered, there are yet others making it not unreasonable to say that he is, and that the insurer is therefore liable.

We start with the initial broad statement that 'every office, employee or guest' of the policyholder is, in the very words of the insurer itself, an 'insured person'. This naturally suggests to the ordinary reader that all of the class mentioned-which, of course, includes the pilot-is insured for such risks and with such limitations as may follow in the rest of the policy. The additional phrase, 'to the extent herein provided' does not make the preceding provision any the less a statement of the persons who are 'an insured person,' that is, who are insured. Since the phrase does not refer to any particular succeeding provision, it amounts to no more than, for example, 'subject to the further terms of this policy' and is by way of suggesting that important matters are to follow. The next paragraph-immediately following-purports to be an extended definition of the erstwhile simple word 'injury,' but is more a statement of risks insured against, and is in no case a restatement of who is 'an insured person.' If it were intended to be the latter, the 'insured person' paragraph would probably not have been written, and in the 'injury' paragraph, the words 'bodily injury' would have been followed by some such phrase as, 'to any officer, employee or guest of the policyholder.' At the same time, of course, the 'injury' paragraph does set out the risks and sundry related matters, without the addition of which the 'insured person' provision would serve no purpose. (An insurer obviously has to insure his 'insured person' against something and for an amount, else there is no insurance). But, if this risk or 'injury' paragraph had merely said 'This insurance is against accidental bodily injury or death received in consequence of riding in' the aeroplane in question, and the amount of insurance had been duly stated, there would have been a complete contract of insurance, and it would undoubtedly have covered the pilot and every one else described in the 'insured person' paragraph. Rather clearly, therefore, the purport of the so-called 'injury' paragraph is to state the risks in contradistinction to the persons insured, and if the intended effect of the description of the risk it to limit the persons insured so as to eliminate one group of them altogether, it thus operates as an indirect sort of exclusion or exception clause and should accordingly be very clear insofar as it is to deny application of the insurance. And the indirectness of the exception is the greater, since the whole 135-word paragraph in question purports to be a mere definition of 'injury,' when it is actually a full statement of the insured risks.

Thus the question is, does the risk ('injury') paragraph or any succeeding part of the policy operate clearly to exclude the pilot, who, being an 'employee' is, in the insurer's own words, 'an insured person,' so that to say the pilot is insured would be not merely less realistic than to exclude him, but also of itself a view beyond the broad pale of reason. Obviously the question could have been easily disposed of beyond a doubt by a few words in the 'exclusions' section, or by inserting a phrase such as 'other than airplane operatives' in the 'insured person' paragraph or inserting after 'bodily injury' in the risk paragraph 'to a person other than the one piloting the plane.' But, there is no such clear exclusion of the pilot anywhere in the policy, and the insurer thus has to bottom its position on the risk or 'injury' definition proviso that 'such injury is sustained by the insured person in consequence of riding as a passenger in, boarding, alighting from, making a parachute jump from (for the purpose of saving his life) or being struck by' the plane (italics supplied). Certainly without the italicized words we would not have this lawsuit, whatever else may be said to aid the construction urged by the insurer. The pilot would be covered because (a) he is 'an insured person' under the initial paragraph and (b) the insured risk came to pass.

Now the mere word 'passenger' cannot be said to exclude the pilot, although, here too, the insurer might have excluded him beyond question by the simple insertion of a phrase such as 'and not as the pilot.' As sufficiently demonstrated in the opinion of the court below, such dictionary definitions as give the word a significance of non-operator of the vehicle concerned are but one of several definitions given by the same work, while common parlance undoubtedly uses it at times in the sense of 'occupant' of a private vehicle, as in the familiar expression 'a six-passenger automobile.' We are cited to no decision fixing the meaning to exclude the operator of a private vehicle, which the aeroplane in question here undoubtedly was, and the significance of 'passenger' as applied to...

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