Hann v. Carolina Cas. Ins. Co.

• Decision Date: 23 April 1969
• Docket Number: No. 18908,18908
• Court: South Carolina Supreme Court
• Parties: Doyle HANN, Appellant, v. CAROLINA CASUALTY INSURANCE COMPANY, Respondent.

Page 420

167 S.E.2d 420

252 S.C. 518

Doyle HANN, Appellant, v. CAROLINA CASUALTY INSURANCE COMPANY, Respondent.

No. 18908.

Supreme Court of South Carolina.

April 23, 1969.

Rainey, Fant & Horton, Greenville, for appellant.

Leatherwood, Walker, Todd & Mann, Greenville, for respondent.

BUSSEY, Justice.

This is an action upon an insurance contract, the primary question being whether a combination automobile insurance policy issued by the defendant-respondent to the plaintiff-appellant afforded theft coverage for a Great Dane trailer of the plaintiff which was stolen. The defendant denied that the policy afforded such coverage, and in a counterclaim contingently sought to have the policy reformed in the event the policy was construed as providing coverage.

At the trial before a judge and jury, considerable evidence was admitted over the objection of the plaintiff. Much of the objected to evidence, if admissible, was admissible only in connection with the defendant's contingent contention that it was entitled to a reformation of the policy. At the conclusion of the testimony both parties made motions for directed verdicts in their respective favors which motions the court did not then pass upon. Instead, the court of its own motion concluded that there were no factual issues to submit to the jury and, over the objection of the plaintiff, dismissed the jury and took the case under consideration as one to be decided by the court alone. Thereafter, the court issued its decree in which the policy was construed as not affording coverage, and having arrived at such construction of the policy. The court found it unnecessary to pass upon defendant's contingent claim that the policy should be reformed.

The plaintiff owned a single, long distance tractor and trailer unit composed of a 1961 Kenworth tractor and a 1955 Great Dane trailer. The policy issued to plaintiff by defendant admittedly provided liability coverage for both tractor and trailer, and theft coverage for the tractor, but it is contended by the defendant that it provided no theft coverage for the trailer. Item 3 on the first page of the policy sets forth the coverages provided, the premiums charged for each coverage, and the limits of the insurer's liability with respect to each coverage. In item 3, theft coverage is denoted by the letter 'G', and the limit of the insurer's liability in connection therewith is stated as $8,000.00.

Item 4 of the policy is headed 'Description of the automobile and facts respecting its purchase by the named insured'. Underneath, in the space provided, both the tractor and trailer are described by model, year and serial number, and with respect to the tractor the additional information is stated that such was purchased, used, June 1966, at an actual cost of $8,000.00. No similar information is set forth with respect to the trailer.

Under insuring agreement IV, the word 'automobile' is defined as follows:

'(a) Described automobile--the motor vehicle or trailer described in this policy.'

Also contained is the following pertinent language,

'IV. (d). Two or more automobiles. When two or more automobiles are insured hereunder, the terms of this policy shall apply separately to each * * *, (and) they shall be held to be * * * separate automobiles as respects limits of liability, including any deductible provisions under coverages d, e, f, g, h, i, and j.' (Coverage g is theft coverage.)

In addition to the limit of liability for theft set forth in item 3, other provisions of the policy limit the company's liability, in the event of loss by theft, to the actual cash value of the property at the time of loss.

In brief, the defendant's contention is that it was necessary to describe the trailer on the face of the policy since it was with the tractor being covered with liability insurance, and that its description was inserted only for such purpose. That since the cost of the tractor and the stated limit of theft liability are the same, to-wit: $8,000.00, and no cost of the trailer is shown on the face of the policy, it is clear that the theft coverage was limited to the tractor and that the trailer was excluded therefrom.

The lower court, in substance, agreed with the construction contended for by the defendant. When, in the light of the defendant's contention, all of the pertinent provisions of the policy are considered, we think that at most a patent ambiguity arises. If it was the intention of the parties to afford no theft coverage for the trailer, it would have been quite simple for the insurer to have inserted in the policy with respect to theft coverage 'tractor only', or, following the description of the trailer, to have inserted 'insured against liability only'. Had the insurer done so, any intention to exclude the trailer from theft coverage would have been clear.

We think it not amiss in the instant case to point out clearly the nature of the ambiguity which we consider. In Jennings v. Talbert, 77 S.C. 454, 58 S.E. 420 (1907), we find the following well stated proposition,

'Ambiguities, however, are patent and latent; the distinction being that in the former case the uncertainty is one which arises upon the words of the will, deed, or other instrument as looked at in themselves, and before any attempt is made to apply them to the object which they describe, while in the latter case the uncertainty arises, not upon the words of the will, deed, or other instrument as looked at in themselves, but upon those words when applied to the object or subject which they describe. 2 Ency. of Law, 388. Thus, where there is conflict in words or clauses of a will or other instrument, the ambiguity is patent.'

The construction contended for by the defendant-insurer, while possibly a permissible one, is, we think, rather a strained construction when it would have, as above pointed out, been so very simple for the defendant to clearly show that no theft coverage was provided for the trailer, if indeed such was the intent of the defendant. In any event, such is not the only reasonable construction of the policy. We find no rpovision in the policy requiring as a precedent for theft coverage that the cost and date of purchase of the trailer be shown on the face of the policy.

Item 4 of the policy declarations describes both the tractor and the trailer. Automobile is defined as, 'The motor vehicle or trailer described in this policy.' Sec. IV(d) of the insuring agreements provided that when two or more automobiles were insured they should be held to be separate automobiles with respect to the defendant's limit of liability for theft coverage. Since on the face of the policy two vehicles were insured, the policy is clearly susceptible of the reasonable construction that the limitation of $8,000.00 was intended to apply separately to each vehicle insured. The liability of the defendant was further limited, in other provisions, to the actual cash value of the vehicle or vehicles at the time of loss. The stated $8,000.00 limitation was therefore only a maximum limitation applicable separately to the vehicles insured. Since the defendant elected to state on the face of the policy only a single maximum limitation, applicable separately to each vehicle insured, it was only natural for it to make that limitation the same as the cost of the more expensive of the two vehicles.

For the foregoing reasons, we conclude that the policy here was clearly and reasonably susceptible of the construction that it was the intention of the parties to afford and that the policy did afford theft coverage with respect to the trailer. It is settled beyond cavil in this jurisdiction that the terms of an insurance policy should be construed most liberally in favor of the insured, and that in case of conflict or ambiguity, a construction will not be adopted that defeats recovery if the policy is reasonably susceptible of a meaning that will permit recovery. We uniformly give the insured the benefit of any doubt in the construction of the terms used in an insurance policy. This the lower court failed to do and it was in error. See numerous cases collected in West's South Carolina Digest, Insurance, k146(3).

Plaintiff alleged that the value of the trailer at the time of its loss was $6,000.00, and contends that the lower court should have directed a verdict in his favor for such amount, or, in the alternative, should have directed a verdict as to the liability of the defendant, leaving to the jury only the amount of the loss sustained. We will not review the evidence in detail as to the amount of the loss sustained, it being sufficient to say that the evidence is susceptible of more than one reasonable inference as to the amount of the loss. Accordingly, the amount of the loss was a jury issue. We are of the view that the...