Hardware Mut. Cas. Co. v. Mayer

• Decision Date: 28 June 1960
• Citation: 104 N.W.2d 148,11 Wis.2d 58
• Parties: HARDWARE MUTUAL CASUALTY CO., Appellant, v. Alex D. MAYER et al., Respondents.
• Court: Wisconsin Supreme Court

Page 148

104 N.W.2d 148

11 Wis.2d 58

HARDWARE MUTUAL CASUALTY CO., Appellant, v. Alex D. MAYER et al., Respondents.

Supreme Court of Wisconsin.

June 28, 1960.

Rehearing Denied Oct. 4, 1960.

See 105 N.W.2d 322.

Schanen, Schanen & Pauly, Port Washington, Arthur Wickham, Edmund W. Powell, Milwaukee, Erwin N. Pauly, Port Washington, of counsel, for appellant.

Richard C. Bonner, Ralph E. Houseman, Grafton, Gerold & Huiras, Port Washington, of counsel, for respondent.

BROWN, Justice.

The trial court made findings of fact. In findings 1, 2, 3 and 4 the court identified the parties and the insurance policy and further found that Mayer owns approximately 230 acres of land in the city of Mequon. Then the court found:

'5. That on or about the 28th day of December, 1954, the defendant, Alex D. Mayer, among other things, was engaged in the business of farming approximately 100 acres of the 230 acre parcel of land in the said City of Mequon by virtue of an agreement he entered into with one Don B. Steward. Besides the usual land and buildings commonly associated with agricultural pursuits and the business of farming, such non-farming items as a home worth far in excess of Fifty Thousand ($50,000.00) Dollars was then under construction on the bank of a thirty acre lake on lands specifically excluded from farming operations. This home is presently occupied by the defendant Mayer as his personal residence.

'6. That on or about December 28, 1954, a multiple duty relationship existed betwen the defendant, Alex D. Mayer, and his co-defendant, Frederick G. Sachse; Mayer, as employer, directed Sachse to perform duties such as shining shoes, shoveling snow, filling the wood box and wood cutting. He was also directed to perform certain commercial duties in connection with the business of Flex Belt Company, a business owned by the defendant, Alex D. Mayer. Said defendant, Frederick G. Sachse, was further directed on various occasions to perform certain duties in connection with agricultural pursuits under the direction of Steward, the farm tenant.

'7. That at the time of the accident referred to in plaintiff's complaint, namely December 28, 1954, when the defendant, Frederick G. Sachse, was injured, he was working on a portion of the acreage which was specifically excluded from farming operations, said injuries being sustained on acreage reserved for the use of the owners and their guests, which said acreage, by its very nature, purpose and use, cannot be classified as a commercial operation; that the acreage for use of the owners and their guests, by its very nature, purpose and use, cannot be classified as a farming operation.

'8. That the defendant, Frederick G. Sachse, at the time he was working on non-farming and non-commercial acreage on December 28, 1954, the date of the accident, could not be classified as a commercial employee nor as a farm employee of his co-defendant, Alex D. Mayer.

'9. That the defendant, Frederick G. Sachse, being neither a commercial employee nor a farm employee, is not excluded from coverage by the terms of the insurance policy issued to the defendant, Alex D. Mayer, by the plaintiff, Hardware Mutual Casualty Company.

'10. That there is no contractual relationship between the plaintiff, Hardware Mutual Casualty Company, and the defendant, Frederick G. Sachse. The said defendant, Frederick G. Sachse, is not a necessary party to a complete determination of the declaratory judgment action nor does he have an interest adverse to the plaintiff herein; he is neither a necessary nor proper party to this action brought pursuant to sec. 269.56 of the Wisconsin Statutes, and is dismissed as a defendant with costs.

'11. That on or about the 10th day of August, 1956, the defendant, Frederick G. Sachse, commenced an action in the Circuit Court of Ozaukee County, Wisconsin, against Alex D. Mayer, alleging damages for personal injuries sustained by virtue of an accident happening on the premises of the defendant, Alex D. Mayer, on the 28th day of December, 1954. The accident referred to happened on a portion of the Mayer premises specifically excluded from farming operations and from commercial operations.

'12. That the defendant, Frederick G. Sachse, at the time of injuries sustained on December 28, 1954, could not be classified as a commercial employee nor as a farm employee of his co-defendant, Alex D. Mayer, and therefor is not excluded from coverage by the terms of the policy issued by the plaintiff, Hardware Mutual Casualty Company, to the defendant, Alex D. Mayer.'

The policy in question is in two parts, the first is referred to as the basic policy and was issued April 11, 1952. Accompanying and made a part of it are a number of Declarations. The basic policy begins:

'[The company] Agrees with the insured, named in the declarations made a part hereof, in consideration of the payment of the premium and in reliance upon the statements in the declarations and subject to the limits of liability, exclusions, conditions and other terms of this policy: (Emphasis ours.)

'Insuring Agreements * * *.'

Reference to the declarations is further made by paragraph 19 of the basic policy, which reads:

'19. Declarations. By acceptance of this policy the named insured agrees that the statements in the declarations are his agreements and representations, that this policy is issued in reliance upon the truth of such representations and that this policy embodies all agreements existing between himself and the company or any of its agents relating to this insurance.'

Among the declarations appear the legal description of Mayer's farm of 221 acres. Within this area is a wooded tract. Sachse was injured when he was cutting a limb off a tree there.

On January 14, 1955, there was added to the policy an endorsement which the parties referred to as a 'Comprehensive Personal Liability Endorsement.' Though the accident had occurred before this date the company agrees that whatever the effect of this endorsement may be it is to be treated as being in effect at the date of the accident.

The basic policy is divided into coverages A, B, C and D. Coverages A and Crefer to automobile accidents, which protection Mayer did not purchase. Also, no automobile was involved in the Sachse accident. Coverage D refers to property damage and that, too, is not involved. Coverage B, alone, is material. It reads:

'Coverage B. Bodily Injury Liability--Except Automobile. To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, and caused by accident.'

Among the exclusions stated by the basic policy is (e), to wit:

'This policy does not apply. * * *

'(e) under coverage B, except with respect to liability assumed under contract covered by this policy, to bodily injury to or sickness, disease or death of any employee of the insured while engaged in the employment of the insured;'

It is not disputed that at the time of Sachse's accident he was employed by Mayer and was hurt in the course of his employment.

Respondents submit that exclusion (e) does not exclude coverage to Mayer because Mayer had a contract obligation to pay Sachse wages for his labor. Coverage B is coverage over bodily injuries, that is, insurance against tort claims, and there is no evidence that Mayer by contract assumed any tort liability. Mayer's obligation to pay wages has nothing to do with coverage B or the exclusion of (e). Exclusion (e) withholds coverage with respect to liability for the injury to the employee of the insured while the employee was engaged in the employment. This is Sachse's situation and we conclude that the basic policy affords no protection to Mayer against the claim of Sachse for personal injury.

We must then examine the Comprehensive Personal Liability Endorsement to see whether it affects the terms of the basic policy. The endorsement begins:

'It is agreed that:

'I. The policy does not apply to any business pursuits of an insured, except (a) in connection with the conduct of a business of which the named insured is the sole owner and (b) activities in such pursuits which are ordinarily incident to non-business pursuits.

"Business' includes trade, profession or occupation and the ownership, maintenance or use of farms, and of property rented in whole or in part to others, or held for such rental, by the insured other than (a) the insured's residence if rented occasionally or if a two family dwelling usually occupied in part by the insured or (b) garages and stables incidental to such residence unless more than three car spaces or stalls are so rented or held.

'II. Except as it applies to the conduct of a business of which the named insured is the sole owner, the policy is...