North American Acc. Ins. Co. v. Cochran

• Decision Date: 04 February 1924
• Docket Number: 10566.
• Citation: 74 Colo. 515,223 P. 28
• Parties: NORTH AMERICAN ACC. INS. CO. v. COCHRAN.
• Court: Colorado Supreme Court

223 P. 28

74 Colo. 515

NORTH AMERICAN ACC. INS. CO. v. COCHRAN.

No. 10566.

Supreme Court of Colorado

February 4, 1924

Department 3.

Error to District Court, Phillips County; H. E. Munson, Judge.

Action by James D. Cochran against the North American Accident Insurance Company. Judgment for plaintiff, and defendant brings error.

Affirmed.

Lee Loughridge & Healy, of Denver, for plaintiff in error.

Allen &amp Webster and L. H. Drath, all of Denver, for defendant in error.

CAMPBELL J.

Under an accident insurance policy, in the principal sum of $10,000, issued to him by the defendant company, the plaintiff recovered $7,575 for injuries sustained as the result of an accidental gunshot would of his foot which necessitated dismemberment above the ankle joint. The defendant does not deny liability, but says that it is not liable for the sum awarded under the schedule of injuries clause of the policy relied upon by plaintiff, because, in the absence of an election by him of the indemnity thereby provided, which was not made, he is confined to the indemnity provided for in another, the weekly indemnity, clause. The decision depends upon the meaning of the following clauses and provisions of the insurance policy. Under 'Schedule of Injuries' we find this language:

'The amounts stated in the following schedule of injuries are payable under this policy if issued for five thousand dollars, principal sum, proportionate amounts being payable, if the policy is issued for a larger or smaller principal sum.

'Dismemberment by actual separation at or above the ankle joint of * * *

'One hand or one foot, $2,500.00.'

In article 6 provision is made for additional benefits, without increase in the premium, if the same is paid annually in advance, to the extent, for the fifth year, of 50 per cent. to be added to the respective sums payable as provided in the foregoing schedule of injuries. In the policy is a further provision that the accumulation provisions of article 6 shall take effect as though the policy was dated December 19, 1914, although its actual date was December 19, 1919.

The parties are in accord that plaintiff would be entitled to a recovery of $7,500 if these stated provisions of the policy govern and are the only ones bearing upon the issue. Unquestionably these three separate clauses or parts of the policy, taken together, constitute a direct, positive, unconditional promise to pay the sum of $7,500, upon the happening of the specific injury, and another provision contains a promise to pay $75 for a necessary surgical operation, dismemberment of the foot. But the defendant contends that the effect and operation of the foregoing provisions are qualified by article 4 of the policy, entitled 'Optional Indemnity,' which reads:

'Article. 4. Or, if the insured suffers total disability and if, during the period of said total disability and within two hundred weeks from the date of the accident, the insured suffers, as the direct result of the bodily injury causing the said total disability and independently and exclusively of all other causes, one of the injuries defined in the schedule of injuries; or, if within ninety days from the date of the accident, irrespective of total disability, the insured suffers in like manner one of the said injuries--the insured may elect to receive the amount of indemnity set opposite said injury in the said schedule, together with the weekly indemnity for the period between the date of the accident and the date that the insured suffers the injury defined in the said schedule in lieu of all other indemnity under this policy except surgeon's fees and hospital charges to which he may be entitled: Provided that written notice of his election is given to the company at its home office in Chicago, Illinois, within thirty days from the date that the insured suffers any injury defined in section 1 of the said schedule and within ten days from the date that the insured suffers any injury defined in section 2 of the said schedule; provided further that not more than one of the said amounts so named shall be payable under this article for bodily injuries resulting from one accident.'

The insurance policy is the contract of insurance of the parties. It is to be interpreted or construed the same as other contracts, and as a whole. It should have a reasonable, not a hypercritical or ingenious, construction intended or calculated to defeat the object for which it was made. Indemnity is the object sought by the insured, and the premiums provided for constitute the object which the insurer has in view. Another failiar rule is that a policy of insurance should be construed favorably to the insured in case of doubt or ambiguity. It has been well said by a learned judge that this rule should not be permitted to have the effect of making a plain agreement ambiguous, and then to interpret it in favor of the insured. Where,...