George S. Allen v. Berkshire Mutual Fire Insurance Co.

• Decision Date: 03 October 1933
• Parties: GEORGE S. ALLEN v. BERKSHIRE MUTUAL FIRE INSURANCE COMPANY
• Court: Vermont Supreme Court

168 A. 698

105 Vt. 471

GEORGE S. ALLEN v. BERKSHIRE MUTUAL FIRE INSURANCE COMPANY

Supreme Court of Vermont

October 3, 1933

May Term, 1933.

Insurance---Construction of Insurance Policy---Sufficiency of Facts To Show Insured Had Not Parted with "Possession"---"Theft"---Taking of Automobile by Naked Bailee out of State Animo Furandi as Constituting Theft---Provision in Automobile Theft Policy Exempting from Wrongful Conversion, etc., under Certain Specified Contracts as Inapplicable to Naked Bailment---Contracts---Words of Particular Description Followed by Words of General Import---Sus- pension and Reattachment of Theft Insurance Policy---Sufficiency of Fact To Show That Automobile Was Not "Unattended."

1. Language of theft insurance policy, being that of insurer all conditions and provisions favorable to it are to be strictly construed against insurer, though entire contract is to be construed together for purpose of giving force and effect to each clause.

2. Equivocation and uncertainty, whether in signification of terms used or in form of construction of sentences, are to be resolved in favor of insured and against insurer.

3. Provisions of automobile theft policy, if clear and unambiguous, must be given force and effect as express condition of validity of contract.

4. Where owner of insured automobile brought to end status of prospective purchaser, who had had automobile on trial, by demanding payment of its purchase price or return of automobile, and received transmission keys from him, but left automobile in such person's garage to be returned following Monday to insured's garage, and such person prior to that time left State with automobile, held that insured had not parted with its "possession," so as to prevent recovery under automobile theft policy.

5. Word "theft" as used in automobile theft policy should be given meaning attributed to it in common use.

6. "Theft" is wider term than larceny, including other forms of wrongful deprivation of property of another, and acts constituting embezzlement may properly be so-called.

7. Where prospective purchaser having automobile on trial, after such relationship had been terminated and transmission keys returned to owner, and while holding automobile as naked bailee for return to owner within specified time, took automobile out of State animo furandi, held that such act constituted "theft" within meaning of automobile theft policy.

8. Provision in automobile theft insurance policy, exempting from risk assumed wrongful conversion, embezzlement, or secretion by person in lawful possession of insured property under mortgage, conditional sale, lease, or other contract held inapplicable to naked bailee taking automobile from State, such person having no such interest or title as contracts specifically mentioned.

9. Where words of particular description are followed by words of general import, latter can be held to include only things similar in character to those specifically named.

10. Protection under automobile theft policy, containing provision against liability when automobile was stored in building not securely enclosed and locked when unattended held suspended only during time car was stored in this manner, and attaching again as soon as such situation came to end.

11. Where insured automobile was taken by person in whose lawful custody it was, and in whose building it had been stored, it was not "unattended" at time within exception as to liability under automobile theft policy.

ACTION OF CONTRACT on automobile theft insurance policy. Pleas, general denial and special pleas. Replication by plaintiff to special pleas. Trial by court at the June Term, 1932, Orange County, Bicknell, J., presiding. Judgment for the defendant. The plaintiff excepted. The opinion states the case.

Judgment reversed, and judgment for the plaintiff to recover the sum of $ 600 and his costs.

Stanley J. Chamberlin and John J. Wilson for the plaintiff.

Wilson & Keyser for the defendant.

Present: POWERS, C. J., SLACK, MOULTON, THOMPSON, and GRAHAM, JJ.

OPINION

MOULTON

The material provisions of the theft insurance policy issued by the defendant and covering the plaintiff's automobile, are these: "G. Theft, Robbery and Pilferage * * * * excepting by any person * * * * to which person * * * * the assured voluntarily parts with title and/oor possession, whether or not induced to do so by any fraudulent scheme, trick, device or false pretence. * * * * The policy does not insure against the wrongful conversion, embezzlement or secretion by a mortgagor, vendee, lessee or other person in lawful possession of the insured property under a mortgage, conditional sale, lease or other contract or agreement, whether written or verbal." A rider attached to the policy contains the following: "2. Exclusions. This policy does not cover * * * * (d.) Under the perils of theft, robbery and pilferage * * * * loss suffered by the assured in case he voluntarily parts with title to or possession of any automobile at risk hereunder, whether or not induced to do so by any fraudulent scheme, trick, device or false pretence or otherwise. (e) Theft, robbery or pilferage * * * * of any automobile stored * * * * in any building not securely enclosed and locked when unattended * * * *."

According to the finding of facts made by the trial court, the plaintiff, on July 3, 1931, permitted Henry Smith, a prospective purchaser, to take the automobile in question on trial. On July 17 the plaintiff went to Smith's home and told him that the automobile must either be paid for or returned. Smith thereupon delivered the transmission keys to the plaintiff, who proposed to remove the car at once. Smith, however, said that he would drive the car back to the plaintiff's garage on the following Monday, July 20, and it was arranged that it should be left with Smith until that day. On July 18 Smith decamped with the automobile, and has since remained in parts unknown. The automobile was found sometime later in Denver, Colorado. While it was upon Smith's premises it was kept in an unlocked garage. The fair value of it, on July 18, was $ 600. Upon these facts judgment was rendered for the defendant, and the plaintiff excepted. His exceptions relate to the failure of the court to find in accordance with certain requests, and to the judgment upon the facts as found.

The controversy between the parties seems largely to turn upon the meaning to be given to the word "possession," as used in the portions of the policy above quoted. The plaintiff contends that it is to be construed as something more than a mere limited or special custody, and must be of a permanent nature, or coupled with an interest in the property, in order to come within the terms of the contract of insurance. The defendant's position is that the word is to be considered as meaning the occupancy and custody of a chattel and exercising dominion over it, and that, taken in this sense, the findings show that the plaintiff had voluntarily parted with the possession of the automobile and so was not entitled to recover.

The language of the policy, being that of the defendant company, all the conditions and provisions favorable to it are to be strictly construed against it, although the entire contract is to be construed together, for the purpose of giving force and effect to each clause. Kimball v. N.Y. Life Ins. Co., 96 Vt. 19, 28, 116 A. 119; Brink v. Merchants, etc., Ins. Co., 49 Vt. 442, 457. Equivocation and uncertainty, whether in the significance of the terms used or in the form and construction of sentences, are to be resolved in favor of the insured and against the insurer. Spaulding, Admr. v. Mutual Life Ins. Co., 96 Vt. 67, 80, 117 A. 376; Stanyan v. Security Mutual Insurance Co., 91 Vt. 83, 86, 99 A. 417, L.R.A. 1917C, 350. The reason for this rule lies, as is pointed out in Wilson et al v. Commercial Union Assurance Co., 90 Vt. 105, 109, 110, 96 A. 540, in the peculiar features of and attending contracts of insurance in which the insurer has an advantage over the applicant for insurance, although of course the provisions of the policy, if clear and unambiguous, must be given force and effect as an express condition of the validity of the contract. Bardwell v. Commercial Union Assurance Co., 105 Vt. 106, 163 A. 633, 635.

"Both in common speech and in legal terminology," says Mr Justice Lamar in National Safe Deposit Co. v. Stead, 232 U.S. 58, 67, 58 L.Ed. 504, 509, 34 S.Ct. 209, "there is no word more ambiguous in its meaning...