Maryland Casualty Co. v. Boise Street Car Co.

• Decision Date: 25 May 1932
• Docket Number: 5772
• Citation: 52 Idaho 133,11 P.2d 1090
• Parties: MARYLAND CASUALTY COMPANY, Respondent, v. BOISE STREET CAR COMPANY, Appellant
• Court: Idaho Supreme Court

11 P.2d 1090

52 Idaho 133

MARYLAND CASUALTY COMPANY, Respondent, v. BOISE STREET CAR COMPANY, Appellant

No. 5772

Supreme Court of Idaho

May 25, 1932

INSURANCE-POLICIES CONSTRUCTION OF-PREMIUM - TRIAL - MOTION FOR NONSUIT.

1. Motion for nonsuit admits truth of plaintiff's evidence and of every fact which it tends to prove.

2. Policy susceptible of more than one construction will be construed most favorably to insured.

3. Insurance contracts should be considered, in view of their general objects and conditions prescribed by insurers.

4. Unambiguous insurance policy will be construed same as any other contract.

5. Rider attached to liability policy after execution held to indicate that premium should be adjusted on basis of rate therein mentioned.

6. Liability policy of bus carrier held to indicate that premium should be calculated at short rates on cancelation by insured.

7. Method by which insured's actual earnings for year could be approximated as basis for determining short rate premium on canceled policy held by obtaining average daily gross receipts for period policy was in force and multiplying result by days in year.

8. Although computation of premiums on bus carrier's liability policy was based on actual gross earnings for year provision for short rate premium on cancelation of policy by insured held valid.

9. Provision in bus carrier's liability policy fixing minimum premium held for benefit of insurer, which could be waived.

10. Rider attached to policy after execution, fixing new rate of premium, held not to constitute waiver of original policy short rate provision to be applied on cancelation of policy.

11. That dealings between insurer and insured extended over term longer than year held not to render short rate premium provision inapplicable, where each policy was independent contract for definite term.

12. Where trial court's error could be corrected by mere mathematical computation, new trial held not required (C. S sec. 6446).

APPEAL from the District Court of the Third Judicial District, for Ada County. Hon. Charles E. Winstead, Judge.

Action to recover balance of premium on liability policy. Judgment for plaintiff. Modified.

Judgment affirmed. Each party pay its own costs.

Oppenheim & Lampert, for Appellant.

Insurance policies will be strictly construed against the insurer and liberally construed in favor of the insured. A clause in an insurance policy being susceptible of more than one construction, the one most favorable to the insured will be adopted. (Sweaney & Smith Co. v. St. Paul etc. Fire Ins. Co., 35 Idaho 303, 206 P. 178; Sant v. Continental Life Ins. Co., 49 Idaho 691, 291 P. 1072; 1 Couch on Insurance, p. 392 et seq.)

Martin & Martin, for Respondent.

An insurance contract, if there is ambiguity, will be construed strictly against the insurer and liberally in favor of the assured, but this rule of construction will never be used or indulged in favor of insured to the extent of ignoring or nullifying the express provisions of the agreement. The rule cannot be invoked to change the nature of the contract, but only to resolve an uncertainty or ambiguity in favor of the insured. (Finkbohner v. Glens Falls Ins. Co., 6 Cal.App. 379, 92 P. 318; Maryland Casualty Co. v. Industrial Acc. Com., 209 Cal. 394, 287 P. 468; Messinger v. Cox, 33 Idaho 363, 194 P. 473; D. M. Ferry & Co. v. Smith, 36 Idaho 67, 209 P. 1066.)

A defendant is not entitled to a nonsuit if there is any evidence from which a reasonable inference can be drawn that the plaintiff is entitled to a verdict of the jury or a decision of the court. (C. S., sec. 6830, as amended 1931 Sess. Laws, p. 16; Stricker v. Hillis, 17 Idaho 646, 106 P. 1128; Pilmer v. Boise Traction Co., 14 Idaho 327, 94 P. 432; Donovan v. Boise City, 31 Idaho 324, 171 P. 670; Schleiff v. McDonald, 37 Idaho 423, 216 P. 1044.)

VARIAN, J. Lee, C. J., and Budge, Givens and Leeper, JJ., concur.

OPINION

VARIAN, J.

On June 5, 1929, and prior thereto, appellant, as a public utility, operated a fleet of eight passenger motor-busses within the corporate limits of the city of Boise and vicinity. On said date respondent issued to appellant a policy insuring appellant against liability for damages on account of accidental injury to persons, including death, and for damage or destruction of property, resulting from accident during the policy term in the operation of its said busses. The policy term is declared to be from 12:01 A. M. June 5, 1929, to 12:01 A. M. June 5, 1930. On January 1, 1930, appellant canceled the policy, proceeding according to paragraph "H" thereof, reading as follows:

"H. This Policy may be cancelled by the Company at any time by written notice sent by registered mail or delivered to the Assured stating when thereafter the cancellation shall be effective. It may be cancelled by the Assured by like notice. If cancelled by the Company, the Company shall be entitled to the earned premium, pro rata. If cancelled by the Assured, the Company shall be entitled to the earned premium calculated at short rates, in accordance with the printed table on the back of this Policy. The check of the Company or of its agent, sent by registered mail to the address of the Assured as given in the Statements hereof shall be sufficient tender of unearned premium when ascertained, but no tender shall be required if the premium shall not have been paid, or if the amount thereof shall not have been determined; and written notice of cancellation sent by registered mail to or delivered at such address shall be a sufficient notice of cancellation."

Printed on the back of the policy was a table of short rates "For One Year Policies." It is conceded by counsel that if the short rate applies to this case the premium for the 209 days the policy was in force would be 74.84 per cent of the premium for one year.

A rider, of even date with the policy and attached thereto, designated as "Earnings Basis Endorsement," fixed the premium rate, based upon an estimated gross earning of $ 75,000 at $ 5.28 liability, and $ 798 property damage; a total rate of $ 6.078 per each $ 100 of gross earnings. Said rider also contained the following:

"The Assured shall, upon delivery of the Policy, pay to the Company an advance premium computed by applying the earnings rate to each $ 100.00 of the total estimated earnings for the Policy term, or a deposit premium based thereon and calculated in accordance with the Company's rules for semi-annual, quarterly or monthly adjustment of premium. The Assured shall previous to the delivery of the Policy furnish the company a complete list of all public passenger carrying vehicles owned and/or used by the Assured and to be covered by this Policy.

"The actual earned premium for the Policy, except as hereinafter provided, shall be computed at the expiration thereof on the basis of the total gross livery earnings (whether collected or not) developed by audit for all public passenger carrying vehicles (except metered taxi-cabs), owned and/or used by the Assured during any part of the Policy term. Provided, however, that the earned premium shall not be less than 75% of a total premium calculated on a specified car basis in accordance with the Company's Manual of Rules and Rates in force on the effective date hereof for all automobiles insured hereunder. If the premium when determined is greater than the advance premium the Assured shall immediately pay the difference to the Company; if less the Company shall return the unearned portion to the Assured. The minimum premium for the Policy in any event shall not be less than the specified car premium calculated in accordance with the Company's Manual of Rules and Rates in force on the effective date hereof, for the three highest rated automobiles owned and/or used by the Assured on the inception date of the Policy.

". . . . The Company shall be permitted to examine the books and records of the Assured in so far as they relate to the use and operation of such automobiles and to the livery earnings derived therefrom. Such examination may be made at any time during the Policy term or within one year after its termination.

"Nothing herein contained shall be held to vary, alter, waive or change any of the terms, limits or conditions of the Policy, except as hereinabove set forth."

Another "endorsement," or rider, likewise dated June 5, 1929, attached to the policy, reads:

"Date June 5, 1929.

"The Policy to which this Endorsement is attached is issued by the Company and is accepted by the named assured with the understanding and agreement that a premium of $ 759.75 ($ 660.00 liability and $ 99.75 Property Damage) known as the Deposit Premium, shall be paid upon the delivery of the Policy, and that a further payment of $ 379.87 ($ 330.00 Liability and $ 49.87 Property Damage) shall be made on the first day of each month thereafter, until the full Policy premium shall have been paid.

"Subject otherwise to all the terms, limits and conditions of the Policy."

After some negotiations between the parties, an "endorsement" or rider, reducing the rate of premium, was executed and attached to the policy. It is in the following language, viz.:

"Date November 1, 1929.

"In consideration of an experience credit of 25% Liability and 30% Property Damage effective November 1, 1929, having been promulgated for this risk it is hereby understood and agreed that the installments after November 1, 1929, are Liability $ 298.12 and Property Damage $ 48.13 and the rate at which the premium for the policy will be adjusted is Liability $ 4.77 and Property Damage .77 per $ 100. instead of as originally written.

"Subject otherwise to all the terms, limits and conditions of the Policy."

The...