Inter-Insurance Exchange of Chicago Motor Club v. Westchester Fire Ins. Co.

• Decision Date: 29 September 1964
• Docket Number: INTER-INSURANCE
• Citation: 130 N.W.2d 185,25 Wis.2d 100
• Parties: EXCHANGE OF the CHICAGO MOTOR CLUB, Respondent, v. WESTCHESTER FIRE INSURANCE COMPANY, Appellant.
• Court: Wisconsin Supreme Court

Page 185

130 N.W.2d 185

25 Wis.2d 100

INTER-INSURANCE EXCHANGE OF the CHICAGO MOTOR CLUB, Respondent, v. WESTCHESTER FIRE INSURANCE COMPANY, Appellant.

Supreme Court of Wisconsin.

Sept. 29, 1964.

Rieser, Stafford, Rosenbaum & Rieser, Madison, for appellant.

W. L. Jackman, Madison, Hart, Kraege, Jackman & Wightman, Madison, of counsel, for respondent.

HEFFERNAN, Justice.

The ultimate question to be determined is the intent of Mannino and Westchester at the time they entered into their contract of insurance as evinced by the language of their agreement. This general rule was stated by the court in Home Mutual Ins. Co. v. Insurance Co. of North America, (1963), 20 Wis.2d 48, 51, 52, 121 N.W.2d 275, 277:

'The established rule, of course, is that in interpreting and construing an insurance contract (in fact, all contracts), the objective should be to ascertain the true intention of the parties. (citations omitted.) A subordinate ruling is that in ascertaining intention of the parties, a practical construction is most persuasive.'

It should also be stated that it is fundamental that no contract of insurance should be re-written by construction to bind an insurer to a risk which it did not contemplate and for which it was not paid, unless the terms, which after all are under the control of the insurer, are ambiguous or obscure. It is of course the rule that in the event of ambiguity or obscurity, that the language is to be construed against the insurance company and in favor of the insured. Lontkowski v. Ignarski (1959), 6 Wis.2d 561, 95 N.W.2d 230.

If there were ambiguity the language of the entire contract should have to be construed most strongly against the insurer. Vaudreuil Lumber Co. v. Aetna C. & S. Co. (1930), 201 Wis. 518, 230 N.W. 704.

Respondent has correctly contended that where the provisions of a rider or endorsement are irreconcilable, the rider must control. However, the policy and the endorsements must be read together and it is only where an irreconcilable conflict exists that resort should be had to the rule that the endorsement should abrogate or nullify the policy provisions.

States Appleman in his treatise, Insurance Law and Practice (1943):

'In construing an endorsement to an insurance policy, the endorsement and policy must be read together, and the policy remains in full force and effect except as altered by the words of the endorsement. Where the endorsement expressly provides that it is subject to all terms, limitations, and conditions of the policy, it does not abrogate or nullify any provision of the policy unless it is so stated in the endorsement. * * *' Sec. 7537, at page 290.

'Endorsements or riders on a policy become a part of the policy, and must be construed with it. Such provisions in the body of the policy are not to be abrogated, waived, limited, or modified by the provisions of an endorsement or rider unless expressly stated therein that such provisions are substituted for those in the body of the policy, or unless the provisions in the policy proper and in the rider or endorsement are conflicting. But where the provisions are inconsistent, those of the rider or endorsement must prevail. And where several such documents appear, the last in point of time is controlling.' Sec. 7538 at page 294.

'But where the provisions of the rider and those of the policy are irreconcilable, the rider must control, and the terms of the rider supersede inconsistent provisions of the policy.' Sec. 7539 at page 297.

A construction of an insurance policy which entirely neutralizes one provision should not be adopted if the contract is susceptible of another construction which gives effect to all of its provisions and is consistent with the general intent. Wyatt v. Wyatt (1953), 239 Minn. 434, 58 N.W.2d 873. Applying these rules to the instant case, we are satisfied that the endorsement did not abrogate the exclusion clause in Westchester's policy and that the order overruling the demurrer must be reversed.

The automobile described in the Westchester policy was Mannino's half-ton, pick-up truck. The following are the pertinent provisions of this policy:

[Body of Policy]

'I. Coverage A--Bodily Injury Liability. 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, caused by accident and arising out of the ownership, maintenance or use of the automobile.

* * *

* * *

'IV. Automobile Defined, Trailers, Private Passenger Automobile, Two or More Automobiles, Including Automatic Insurance.

'(a) Automobile. Except with respect to division 2 of coverage C and except where stated to the contrary, the word 'automobile' means:

* * *

* * *

'(2) Trailer--under coverages A, B and division 1 of coverage C, a grailer not described in this policy, if designed for use with a private passenger automobile, if not being used for business purposes with another type automobile, and under division 1 of coverage C, if not a home, office, store, display or passenger trailer;

[Exclusions]

'This policy does not apply:

'(c) under coverages A and B, while the automobile is used for the towing of any trailer owned or hired by the insured and not covered by like insurance in the company; or while any trailer covered by this policy is used with any automobile owned or hired by the insured and not covered by like insurance in the company * * *.

[Endorsement]

'It is agreed that such insurance as is afforded by the policy for Bodily Injury Liability, for Property Damage and for Automobile Medical Payments with respect to the automobile described above or designated in the policy as subject to this endorsement applies, subject to the following provisions:

'1. The insurance also applies to a trailer not described in the policy, if designed for use with a private passenger automobile, and if not being used for business purposes with any automobile other than the automobile herein designated, or a private passenger automobile * * *.'

It appears, therefore, that the body of the policy under 'coverage A' obligates the insurance company in respect to the operation of the named automobile, the half-ton Chevrolet pick-up truck. Under IV 'automobile' is defined to include a trailer (designed, for use with a passenger automobile) unless it is being used for business purposes with a non-passenger or commercial type vehicle. Since the phrase in IV (2) 'another type of automobile' follows the phrase 'private passenger automobile,' it is obvious that the phrase 'another type of automobile' refers to...