General Cas. Co. of Wisconsin v. Elam, 71--66

• Decision Date: 25 October 1972
• Docket Number: No. 71--66,71--66
• Citation: 8 Ill.App.3d 215,289 N.E.2d 699
• Parties: GENERAL CASUALTY COMPANY OF WISCONSIN, a corporation, Plaintiff-Appellant, v. Betty J. ELAM et al., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 699

289 N.E.2d 699

8 Ill.App.3d 215

GENERAL CASUALTY COMPANY OF WISCONSIN, a corporation Plaintiff-Appellant, v. Betty J. ELAM et al., Defendants-Appellees.

No. 71--66.

Appellate Court of Illinois, Fifth District.

Oct. 25, 1972.

August L. Fowler, Fowler & Novick, Marion, for plaintiff-appellant.

Craig & Craig, Hanagan, Dousman & Giamanco, Mt. Vernon, Joseph W. Hickman, Benton, for defendants-appellees.

EBERSPACHER, Justice.

This is an appeal from a declaratory judgment by the court in a non-jury trial that an automobile policy issued by plaintiff, General Casualty Co., to Betty Elam, wife of Arlie Elam, which specifically described a 1963 Ford automobile, also covered a 1959 Chevrolet owned and operated by Arlie Elam. The plaintiff had sought a judgment declaring which of two automobile insurance policies were available to pay for injuries sustained by Mary Bushing and Pauline Carnago, when their automobile, insured by Automobile Club Interinsurance Exchange, collided with the 1959 Chevrolet driven by Arlie Elam.

The pertinent facts are as follows: Betty Elam applied for an insurance policy to insure a 1963 Ford on March 17, 1969, from plaintiff's agent. According to the insurance agent's testimony, Mrs. Elam stated that her husband then owned a 1959 Chevrolet, that it was covered with insurance by another insurance company, and that as soon as this policy on the 1959 Chevrolet expired, she would request coverage from plaintiff's insurance agent. Mrs. Elam testified that she told the agent that she did not think the 1959 Chevrolet was running, that her husband would insure it when he got home and got it running. The application which she signed contained the statement 'Husband has own auto 1959 Chev.--will add to this later'. A policy was later issued, effective March 17, 1969, providing coverage of a '63 Ford', but the company did not attach or make the application a part of the policy. No reference was made in the policy about the 1959 Chevrolet. The policy further defined 'owned vehicle' to include 'a private passenger * * * automobile ownership of which is acquired by the named insured during the policy period then current * * *'.

On March 14, 1969, Arlie Elam had entered the veterans hospital. A few days prior to that he had a conversation with his half brother, Riley Roach, concerning the purchase of the 1959 Chevrolet. He and Roach had agreed upon a price which was $50 in cash and credit for an indebtedness of Roach to Elam in the amount of $35. Elam did not take possession of the automobile prior to the time that he went into the hospital, nor had he paid Roach $50. It was not until Elam got out of the hospital on March 28, 1969 that he paid Roach the $50. He then took possession of the 1959 Chevrolet on March 29, 1969, the same day of the accident with Mary Bushing.

Betty Elam testified that at the time she applied for insurance, the 1959 Chevrolet was at her husband's mother's house. After she had applied for the insurance, she visited her husband at the hospital. She said that it was at this time that she learned that her husband did not in fact own the 1959 Chevrolet.

The issues are whether the trial court was correct in deciding that Arlie Elam acquired ownership of the 1959 Chevrolet after the effective date of plaintiff's policy to Betty Elam and in deciding that the policy should not be construed to incorporate the statement of Betty Elam in the application that the 1959 Chevrolet should not be included within the coverage of the policy.

The only evidence which plaintiff submitted to rebut the evidence that Arlie Elam acquired ownership after the effective date of the policy is a statement in a discovery deposition by Arlie Elam that he considered the automobile to be his when he went into the hospital; a signed statement taken by plaintiff's insurance adjuster from Riley Roach indicating that Roach believed the car belonged to Elam before Elam entered the hospital; and the testimony of Mrs. Elam to the effect that she thought Arlie Elam owned the car before he entered the hospital.

However, Arlie Elam testified on trial that when he gave Roach the $50 he expected the '59 Chevrolet was his car and that was the first time that he considered that he was the owner of the car. Although there is a conflict between plaintiff's discovery deposition and Elam's subsequent testimony, the trial judge, after weighing this conflict believed the testimony at trial.

Second, plaintiff's signed statement from Riley Roach is of questionable value since it was established on trial that Roach can neither read nor write except to sign his signature. The trial judge noted this fact and elected to minimize the effect of this evidence.

Finally, Mrs. Elam's testimony that she thought her husband owned the '59 Chevrolet was explained by her testimony that her husband talked like he was going to purchase it and she thought he had already purchased it for a while. Further testimony on her part revealed that she did not learn that he had not actually purchased it until she visited her husband at the hospital and he asked her to get the money from her brother to pay for the '59 Chevrolet.

Thus, it is evident that none of this evidence, without more, can require a decision contrary to the one made by the trial judge. As in other cases raising factual questions, we adhere to the principle expressed in Brown v. Zimmerman, 18 Ill.2d 94, 102, 163 N.E.2d 518, 523 (1960), wherein the court stated:

Where the trial court has seen and heard the witnesses and the testimony is contradictory, this court will not substitute its judgment as to the credibility of witnesses for that of the trial court, and will not disturb the findings unless they are manifestly against the weight of the evidence.

The plaintiff argues that this principle is inapplicable since the trial court stated in its decision: 'I realize it is a close case, but if there is any question here, we will let the Appellate Court decide it.' The plaintiff argues that this statement indicates the trial court 'passed it on to this Appellate Court for a decision.' We disagree. The trial court heard the evidence, saw the witnesses, and, though recognizing that it was a close case, found for the defendants. We will not disturb his finding unless manifestly against the weight of the evidence. The trial court concluded that the 1959 Chevrolet was acquired after the effective date of the policy. There is sufficient evidence in the record to support this conclusion.

Plaintiff next argues that, even assuming ownership of the 1959 Chevrolet was acquired after the effective date of the policy, the policy should be interpreted in such a way as to exclude the 1959 Chevrolet. Plaintiff argues that the clause in the policy concerning after acquired automobiles is latently ambiguous because it was the clear intention of the parties not to include the 1959 Chevrolet within the coverage of the policy.

Both at the time the application was offered and at the time the plaintiff's agent was questioned about taking the application from Betty Elam, counsel for defendants objected, on the theory that the evidence was being offered to vary the terms of the written insurance contract. However, the trial court permitted introduction of the evidence on the theory that plaintiff was not 'proposing to make a change, he is proposing to show the interpretation at the time of the inception of the contract'.

Appellant, in his reply brief, cites Queen Insurance Co. of America v. Meyer Milling Co., 43 F.2d 885 (8th Cir. 1930), to illustrate the latent ambiguity doctrine. In particular, appellant draws our attention to the language on page 887 of this case wherein it is stated:

To discover latent ambiguity it is, of course, necessary * * * to go outside the instrument and to consider evidence * * * to reveal the facts which existed when the words of the instrument were used, so that by comparing the words used with the facts it may be ascertained whether the words aptly fit the facts. 2 Corpus Juris, 1314. If they do not, then there is latent ambiguity. When that has been ascertained, extrinsic proof as to the real intent is competent. We illustrate the foregoing general observation thus: A enters into a written contract with B by which he agrees to sell and B agrees to buy A's house for $5,000. There is no patent ambiguity in that contract. But the fact is, A has two houses. Proof of that fact shows a latent ambiguity in the written contract. It is then competent to prove by extrinsic evidence what house was really intended by A and B as the subject-matter of the written contract.

Thus, for the latent ambiguity doctrine to be applicable, the words or the term in question must initially be susceptible of more than one possible meaning or description. Consequently, the language used in the written contract must be ambiguous before extrinsic proof of real intent is competent. Coney v. Rockford Life Insurance Company, 67 Ill.App.2d 395, 214 N.E.2d 1 at 3, (1966), clearly substantiates this point:

Contracts are said to be ambiguous where the words used by the parties are fairly susceptible of being understood in more than one sense. 12 I.L.P., Contracts, § 211.

There is no way that the clause in the policy providing for automatic coverage for newly acquired automobiles can be construed any differently than what the words themselves express. Appellant agrees that the instant policy provided automatic coverage for newly acquired automobiles; that the parties intended such coverage; and that they clearly expressed this intention. Therefore, it is not only evident that the words in the policy clearly indicate the parties intention, but also that the same words aptly fit the facts described above.

Notwithstanding this seemingly incontrovertible proof, appellant urges us to consider a definition of latent ambiguity taken from 3 C.J.S. Ambiguity page 1035:

A latent ambiguity implies 'a...