Levine v. Accident & Cas. Ins. Co.

• Decision Date: 28 April 1952
• Citation: 203 Misc. 135
• Parties: Irving Levine, Plaintiff,<BR>v.<BR>Accident and Casualty Insurance Co., Defendant.
• Court: New York District Court

203 Misc. 135

Irving Levine, Plaintiff,

v.Accident and Casualty Insurance Co., Defendant.

April 28, 1952.

Henry S. Drezner for plaintiff.

William R. Armuty, Jr., and John J. Jablonsky for defendant.

STARKE, J.

This is an action to recover on a theft policy the sum of $750, alleged to be the value of a diamond ring.

This case involves the construction and interpretation of the following words: "Mysterious disappearance of any insured property shall be presumed to be due to theft."

There is no New York law on the subject. Counsel cite two cases in the United States (Davis v. St. Paul Mercury & Ind. Co., 227 N. C. 80, and Weiner v. United States Fidelity & Guar. Co. [N. J., Mercer Co. Dist. Ct., Docket No. 1157]).

The policy is a "residence and outside residence" theft policy. Under Coverage B the policy covers "theft away from the premises excluding property unattended in automobiles."

Under the heading "Conditions," there is a clause in the policy containing the following: "A. DEFINITIONS. (2). THEFT. The word `theft' includes larceny, burglary and robbery. Mysterious disappearance of any insured property, except a precious or semi-precious stone from its setting in any watch or piece of jewelry, shall be presumed to be due to theft."

The evidence adduced at the trial discloses: The plaintiff attended a show at the Mayfair Theatre on a Saturday night, September 15, 1951. About 10:30 P.M. he went to the gentlemen's room and, in washing his hands, he removed the ring and placed it on the washstand. He turned to wipe his hands and then forgot about the ring and left the room. He did not realize the ring was missing until about 11:00 A.M. the next morning (Sunday). He definitely remembered leaving the ring on the washstand. He was positive the ring did not go down the drain. The last place he saw the ring was on the washstand. He never saw the ring after that.

On Sunday he reported the loss to the management of the Mayfair Theatre and the local precinct of the police department. A detective was assigned to the case. A search and investigation followed but the ring was never recovered.

A jewelry expert testified he had appraised the ring on May 15, 1949, and that the fair and reasonable value of the ring on the date of the loss was $750.

The defendant company disclaimed coverage under this policy for this loss on the grounds that this case does not come within the "mysterious disappearance clause" of the policy. It contends in part: "Here we do not have a mysterious disappearance but rather a ring which had been put on a washstand and which was left mislaid. There is no mystery about this loss as the Plaintiff definitely placed this ring on the washstand and then left it at the Mayfair Theater. The leaving of the ring at that time created the loss to the Plaintiff and it is accounted for by his direct testimony on the stand. There was nothing mysterious about the disappearance of the ring."

This court cannot agree with the defendant's contention. The reasoning is fallacious.

The words "mysterious disappearance" mean a disappearance that is mysterious. The adjective "mysterious" modifies the noun "disappearance". "Mysterious" means unknown, unaccountable, unexplainable. Therefore, a "mysterious" disappearance is a disappearance which is unexplainable, unaccountable, or in an unknown manner.

Defendant seems to be under the impression that there is no mystery about the loss because the plaintiff remembers definitely that he placed the ring on the washstand. Of course there is no mystery about the placing of the ring; however, there is a mystery as to its disappearance. What happened to the ring after the plaintiff walked out and left it on the washstand is unknown and unexplainable. The fact that he remembers he left it on the washstand does not explain the disappearance. What happened to the ring after it was placed on the washstand is a mystery. The disappearance of the ring has never been explained.

The defendant further argues that there was no mysterious disappearance — the property was "left mislaid," and says: The disappearance of property which is lost or mislaid can readily be explained and if its disappearance can be logically, reasonably and rationally explained there obviously can be nothing mysterious about its disappearance and hence the policy does not apply to cover such property.

Property is "lost or mislaid" if a person cannot remember where he placed the article and therefore cannot find it. In such a case, there is no mysterious disappearance. It might have been stolen, but the presumption of theft in the policy would not apply because those facts do not establish that the property has disappeared mysteriously. However, assume that a person remembers where he placed the article. If it is not in its place when he attempts to recover it, it has disappeared in a mysterious (unknown) manner. The disappearance or vanishment from its place is unknown and unexplainable.

What does "presume" or "presumption" mean? It means: "to take for granted" or "that which we may assume without proof". "That which is presumed," says Richardson on Evidence (§ 7), need not be proved, "unless and until evidence rebutting the presumption is admitted".

The presumption is therefore rebuttable. It is for the insurer to come forward with proof necessary to overcome the presumption. A presumption means to accept as being entitled to belief without examination or proof. (Ferrari v. Interurban St. Ry. Co., 118 App. Div. 155.) A presumption is destroyed only by evidence to the contrary. (People v. Will, 289 N.Y. 413; Potts v. Pardee, 220 N.Y. 431; Note, 8 A. L. R. 785, 789; People ex rel. Wallington Apts. v. Miller, 288 N.Y. 31; Note, 141 A. L. R. 1036, 1037.)

A proper interpretation of the "mysterious disappearance" clause in this policy would therefore be: this clause means that a presumption immediately arises that when property disappears mysteriously (in an unknown manner), the loss is due to theft. The presumption has created a rule of evidence which is binding on the parties.

The court agrees with defendant's contention that this is a theft policy and that the intent is to cover only losses which occur because of theft. However, the company has contracted away the necessity of the insured proving theft by inserting the clause "mysterious disappearance shall be presumed to be due to theft." All that the insured need establish is "mysterious disappearance". If he proves that the property has disappeared in a mysterious manner, he is entitled to the presumption that the loss is due to theft.

This court also agrees that the burden of proof is always upon the insured to prove the loss is due to theft. However, having received by contract the benefit of the presumption of theft, the plaintiff need only introduce sufficient evidence to show "mysterious disappearance" in order to establish a prima facie case. Only if the company successfully rebuts the presumption, does the assured again have the burden of proving that a theft actually occurred in order to recover.

This court differs with the company's contention that: "Nor does it insure against any and all mysterious disappearances." In accordance with the insurer's language and its own definition, all mysterious disappearances are covered with but two specific exceptions. Moreover, the insurer, in saying that theft shall be presumed does not limit itself to any particular type of mysterious disappearance. If it intended to cover only certain kinds of mysterious disappearances it should have said so in clear, plain and unmistakable language. This it could have done very well. It went to the trouble of excluding property left unattended in an automobile and stones from settings. The policy covers any other mysterious disappearance. The burden is on the defendant to come forward and overcome or disprove the presumption, by showing the loss was not occasioned by theft after plaintiff has introduced testimony establishing that the property has disappeared mysteriously (in an unknown, unexplainable or unaccountable manner) under any circumstances whatsoever except the two instances specifically excluded by the language of the policy.

Furthermore, the insured need not produce evidence excluding the probability that the ring was not stolen. Neither is he required to prove that larceny is the more rational inference. (Davis v. St. Paul Mercury & Ind. Co., supra.)

It is also basic that the insured need not prove who stole the article. (National Sur. Co. v. Fox, 174 Ark. 827; Note, 54 A. L. R. 458, 467.) Neither is the question of negligence in leaving the ring on the washstand involved. In the absence of fraud, the negligence of the assured will not prevent a recovery under an insurance policy, even though it be very great in degree. (O'Brien v. Commercial Fire Ins. Co., 63 N.Y. 108; d'Autremont v. Fire Assn., 65 Hun 475.) In the absence of all fraud, the proximate cause of the loss only is to be looked to. Hence a loss within the policy, though occasioned by the gross negligence of the insured, is covered. (Gates v. Madison, 5 N.Y. 469.)

It is not the construction or interpretation which the company gives to a policy that governs. It is the plain meaning understandable to "Joe Doakes", the average person, that counts. A review of the law on construction of clauses in policies follows herewith: The New York Court of Appeals said in McGrail v. Equitable Life Assur. Soc. (292 N.Y. 419, 424): "Such meaning must be given to the terms used as would be ascribed to them by the average man in applying for insurance".

Judge LEARNED HAND wrote in Gaunt v. John Hancock Mut. Life Ins. Co. (160 F.2d 599, 601): "An underwriter might so understand the phrase when read in its context, but the application was not to be submitted to underwriters; it was to go to persons utterly unacquainted with the niceties of life insurance, who read it colloquially. It is the understanding of such persons that...