Miller v. Boston Ins. Co.

• Decision Date: 22 March 1966
• Citation: 420 Pa. 566,218 A.2d 275
• Parties: Benjamin MILLER v. BOSTON INSURANCE COMPANY, Appellant, and Jacob Friedman, Additional Defendant.
• Court: Pennsylvania Supreme Court

218 A.2d 275

420 Pa. 566

Benjamin MILLER v. BOSTON INSURANCE COMPANY, Appellant, and Jacob Friedman, Additional Defendant.

Supreme Court of Pennsylvania.

March 22, 1966.

Richard W. Hopkins, White & Williams, Philadelphia, for appellant.

Cornelius C. O'Brien, Jr., Matthew J. Ryan, III, Philadelphia, for appellee.

Before BELL, C.J., and MUSMANNO, JONES, COHEN, EAGEN O'BRIEN and ROBERTS, JJ.

O'BRIEN, Justice.

Appellee Benjamin Miller, brought an action of assumpsit against appellant, Boston Insurance Company, to recover for the loss of a diamond ring, which was insured by appellant under a Jewelers' Block Policy. The policy insured appellee against 'all risks of loss of or damage * * * arising from any cause whatsoever except: * * * (M) Unexplained loss mysterious disappearance or loss or shortage disclosed on taking inventory'.

On March 11, 1958, Miller, a dealer in jewelry, consigned the ring to Jacob Friedman, who was also a jewelry dealer. On the following day, Friedman consigned the ring to another dealer, David Willner, who was attempting to sell the ring. Willner's body was recovered from the East River in New York City in July of 1958. The day before his death, Willner stated he had the ring 'in his pocket' and was still trying to sell it. The record is bare as to any evidence of the cause of Willner's death, and the ring was not returned to either Friedman or appellee.

On August 16, 1958, appellee, by letter, requested the return of the ring from Friedman. This letter, and other inquiries, produced no results. The written memorandum under which Friedman obtained the ring from appellee holds Friedman responsible for the care, custody and return of the ring. Friedman made inquiries of Willner's Executor, and his attorney also investigated as to the whereabouts of the ring. The ring was never returned or, to appellee's knowledge, found by Friedman or any person acting in his behalf.

At trial, the jury returned a verdict for appellee against the appellant, the Boston Insurance Company, and the additional defendant, Jacob Friedman. The only issue the lower court submitted to the jury was whether it believed the testimony of appellee, Miller, and the additional defendant, Friedman. These issues resulted from the lower court's interpretation of the insurance policy's coverage. Following the verdict, appellant made motions for judgment n.o.v. and for a new trial. This appeal followed denial of the motions and entry of judgment on the verdict.

In Connolly v. P.T.C., 420 Pa. 280, 216 A.2d 60 (1966), we stated: 'In considering a motion for judgment n.o.v., the evidence together will all reasonable inferences therefrom is considered in the light most favorable to the verdict winner. Lewis v. United States Rubber Co., 414 Pa. 626, 202 A.2d 20 (1964); Pritts v. Wigle, 414 Pa. 309, 200 A.2d 386 (1964); Chambers v. Montgomery, 411 Pa. 339, 192 A.2d 355 (1963), and in reviewing on appeal, we stated in Vignoli v. Standard M. Freight, Inc., 418 Pa. 214, 210 A.2d 271 (1965): 'The grant or refusal of a new trial will not be reversed on appeal, absent an abuse of discretion or error of law which controlled the outcome of the case. '' See Weed v. Kerr, 416 Pa. 233, 205 A.2d 858 (1965), and cases cited therein. Viewing the record in the light of these standards, we conclude that the judgment must be affirmed.

Initially, before considering the policy in the instant case, we must first set forth some general rules which we have held applicable to insurance policies. In Warner v. Employers' Liability Assurance Corp., 390 Pa. 62, 133 A.2d 231 (1957), we said: 'While policies of insurance will be construed most strongly against insurer, Bule Anchor Overall Co. v. Pennsylvania Lumbermens Mutual Ins. Co., 385 Pa. 394, 397, 123 A.2d 413, (59 A.L.R.2d 546), it is a necessary prerequisite to recovery upon a policy for the insured to show a claim within the coverage provided by the policy. Fullmer v. Farm Bureau Mutual Auto Insurance Company, 350 Pa. 451, 452, 39 A.2d 623.' In Armon v. Aetna Casualty and Surety Co., 369 Pa. 465, 469, 87 A.2d 302, 304 (1952), we held: 'A defense based on an exception or exclusion in a policy is an affirmative one, and the burden is cast upon the defendant to establish it. Bowers v. Great Eastern Casualty Company, 260 Pa. 147, 148, 149, 103 A. 536; Watkins v. Prudential Insurance Co., 315 Pa. 497, 508, 173 A. 644, 650, 95 A.L.R. 869; Zenner v. Goetz, 324 Pa. 432, 435, 188 A. 124, 125; Gardocki v. Polish National Alliance of United States of America, 141 Pa.Super. 53, 59, 14 A.2d 604, 607; Brier Hill Coal Co. v. Hartford Steam Boiler Inspection § Insurance Co. of Hartford, 146 Pa.Super. 193, 196, 22 A.2d 230, 231.'

It is hornbook law that in construing any written instrument, and particularly an insurance contract, the instrument must be strictly construed against the writer. See Barnes v. North American Accident Insurance Co., 176 Pa.Super. 294, 107 A.2d 196 (1954).

Appellant in its brief indicates 'The only issue in this case is whether the plaintiff has proved 'a loss of property' under an All-Risks Policy by showing that the last known consignee of the property died without returning the property to the insured.' Appellant relies chiefly upon Mellon v. Federal Ins. Co., 14 F.2d 997, (D.C.S.D.N.Y. 1926), which involved damage to ship's boilers and what Judge Hand considered to be an 'all risks' policy. Judge Hand in that case stated: 'The perils clause is an 'all risk' clause, and the libelant has discharged his burden when he has proved that the loss was due to a casualty and was caused by some event, as here by the hydrostatic test, covered by the general expressions of the policy. 'He is not bound to go further, and prove the exact nature of the accident or casualty which in fact occasioned his loss.' British & Foreign Marine Ins. Co. v. Gaunt, (1921) A.C. 41. In the Inchmaree clause the casualty came within a specified risk. * * * As Lord Summer said, in the recent case of British & Foreign Marine Co. v. Gaunt, (1921) 2 A.C. at page 57: 'The expression does not cover inherent vice or mere wear and tear. * * * It covers a risk, not a certainty; it is something which happens to the subject-matter from without, not the natural behavior of that subject-matter, being what it is, in the circumstances under which it is carried. Nor is it a loss which the assured brings about by his own act, for them he has not merely exposed the goods to the chance of injury; he has injured them himself. Finally, the description 'all risks' does not alter the general law; only risks are covered which it is lawful to cover, and the onus of proof remains where it would have been on a policy against ordinary sea perils.' See, also, Schloss Brothers v. Stevens, (1906) 2 K.B. 665; Grant Smith & Co. v. Seattle Construction & Dry Dock Co., (1920) A.C. 162.'

Black's Law Dictionary defines the word 'Risk' as follows: 'In insurance law; the danger or hazard of a loss of the property insured; the casualty contemplated in a contract of insurance; the degree of hazard; a specified contingency or peril; and, colloquially, the specific house, factory, ship, etc., covered by the policy.'

George B. Couch, in his excellent 'Cyclopedia of Insurance Law', 5 Couch on Insurance, p. 4152, Sec. 1169, says: "All risks.'--An insurance may be in general terms, by a policy covering all risks. Thus, a policy against 'all risks,' the words being inserted in writing, ordinarily covers every loss that may happen, except by the fraudulent acts of the insured.' See also Sun Insurance Office, Ltd., v. Clay, Fla., 133 So.2d 735 (1961). Therefore, we must conclude that the very nature of the term 'all risks' must be given a broad and comprehensive meaning as to covering any loss other than a wilful or fraudulent act of the insured.

The basic problem before us, then, in this case, is whether appellee has proved the loss of property under the all-risks policy. The applicable rule of law was initially set forth in Agricultural Insurance Co. v. A. Rothblum, Inc., 147 Misc. 865, 265 N.Y.S. 7. It was there held that the sole obligation of the plaintiff was to furnish the defendant with such explanation as it, in good faith, had received and accepted as to the time and cause of the loss. If we were to require the plaintiff to go further and guarantee the accuracy of the explanation of the loss that might have been given to it by the person to whom custody of the goods had been entrusted and who, himself, might be guilty of a fraud unknown to the plaintiff, the inclusive character of the coverage afforded by the insurance policy would be a mere delusion. If the custodian of the property converted the same and was guilty of a breach of trust, the defendant should establish that fact. This rule was followed in Chase Rand Corp. v. Central Ins. Co. of Baltimore, 63 F.Supp. 626 (D.C.S.D.N.Y. 1945); Affirmed 152 F.2d 963, (2nd Cir.1945) in which the plaintiff brought an action to recover from the defendant Insurance Company for the alleged loss of a quantity of jewelry protected under the provisions of a Jewelers' Block Insurance Policy issued by the defendant. The plaintiff, at trial, proved delivery of the jewelry to Ben Levit, a jewelry dealer, on consignment. Ben Levit, in turn, entrusted certain items of jewelry which he had received from the plaintiff to his nephew, Hyman Levit, who was employed by his uncle as a salesman. Hyman Levit reported the jewelry in his custody was stolen while he was on the road going to Van Horn, Texas. There was serious question at the trial as to whether the alleged robbery, in fact, did occur. Defendant, in its answer, in addition to a general denial of the allegations set forth in the complaint, set forth six affirmative...