Pacific Mut. Life Ins. Co. v. Walt

• Decision Date: 11 March 1955
• Citation: 277 S.W.2d 434,198 Tenn. 59,2 McCanless 59
• Parties: , 198 Tenn. 59, 55 A.L.R.2d 392 PACIFIC MUTUAL LIFE INSURANCE COMPANY v. Charles A. WALT, Administrator.
• Court: Tennessee Supreme Court

Page 434

277 S.W.2d 434

2 McCanless 59, 198 Tenn. 59, 55

A.L.R.2d 392

PACIFIC MUTUAL LIFE INSURANCE COMPANY v. Charles A. WALT, Administrator.

Supreme Court of Tennessee.

March 11, 1955.

W. E. Quick and Quick, Buchagnani, Greener & Younger, Memphis, for petitioner.

Charles L. Glascock, Memphis, for respondent.

BURNETT, Justice.

The only question involved in this lawsuit is the construction of a paragraph in the policy of insurance issued by the petitioner. The policy issued was an accident and sickness policy providing for payment in the principal sum of $750 for accidental death, the monthly indemnity at the rate of $60 per month for total disability, with an additional indemnity at the rate of $2 per day during such time as the insured should be confined to a hospital. There is no controversy between the parties in respect to the single indemnity under the policy, and this has been tendered into court by the Insurance Company but the dispute arises in reference to the double indemnity clause of the insurance contract which is as follows:

'Any amount payable under Article 1 for loss of life, for loss of either hand, for loss of either foot, for loss of sight of either eye, or for loss of thumb and index finger of either hand, or under Articles 3 or 4 (Total or Partial Disability) will be doubled if such injuries are sustained by the Insured (a) in consequence of the burning of a building, provided the insured is therein or thereon at the commencement of the fire; * * *'. (Emphasis ours.)

The two lower courts found that the injuries received by the insured under this policy brought him within this double indemnity feature and therefore found against the Insurance Company on this question. The Court of Appeals rendered a split decision, Avery, P. J., dissenting. The Chancellor seems to have reached his conclusion largely because he thought that under what he calls the 'liberality of construction rule which was adopted in the case of National Bank of Commerce v. New York Life Ins. Co., 181 Tenn. 299, 181 S.W.2d 151,' he was forced to decide against the Insurance Company and in favor of the insured's administrator. In reading this case we feel though that this Court, speaking through Mr. Justice Chambliss, felt constrained to follow precedents of New York and other States interpreting the identical language that was involved in this Bank of Commerce case--this especially being true since the policy involved was a New York policy and the New York Courts had adopted the same interpretation of the language involved in the policy in that case. We feel that this opinion was largely based on what this Court, at that time, considered to be the correct interpretation of the language used in the New York Life policy. The Court concluded that the language there used was ambiguous and thus followed the wellrecognized rule of when there is ambiguity that such ambiguity should be construed against the Insurance Company and in favor of the insured.

The real question involved here is whether or not the language 'in consequence of the burning of a building, provided the insured is therein or thereon at the commencement of the fire', is ambiguous or unambiguous. If the language is unambiguous or free from reasonable doubt, it is our obligation to give effect to the contract as written. Seay v. Georgia Life Ins. Co., 132 Tenn. 673, 676, 179 S.W. 312; Moore v. Life & Casualty Ins. Co., 162 Tenn. 682, 685, 40 S.W.2d 403; Inman v. Life & Casualty Ins. Co., 164 Tenn. 12, 16, 45 S.W.2d 1073, 1074, and others. While on the other hand if this phrase of the contract is ambiguous or subject to two meanings it is our duty to strictly construe the contract against the insurer and in favor of the insured. National Bank of Commerce v. New York Life Ins. Co., 181 Tenn. 299, 181 S.W.2d 151; Baugh v. Metropolitan Life Ins. Co., 173 Tenn. 352, 117 S.W.2d 742; Monroe County Motor Co. v. Tennessee Odin Ins. Co., 33 Tenn.App. 223, 231 S.W.2d 386, and Brandt v. Mutual Benefit Health & Acc. Ass'n, 30 Tenn.App. 14, 202 S.W.2d 827.

In all the cases that we can find, or have been cited to, the courts in construing this double indemnity feature, worded almost identical with the clause herein, are using the words 'in consequence of the burning of a building', have held that this language is unambiguous and that the burning of the building is not the same thing as the burning of articles contained in the building. For cases on this question see Houlihan v. Preferred Accident Ins. Co. of N. Y., 196 N.Y. 337, 89 N.E. 927, 928, 25 L.R.A.,N.S., 1261; Maryland Casualty Co. v. Edgar, 4 Cir., 203 F. 656, 658-659; Kreiss v. Aetna Life Ins. Co., 229 N.Y. 54, 127 N.E. 481; Provident Life & Acc. Ins. Co. of Chattanooga, Tennessee v. Brooks, 5 Cir., 170 F.2d 909; Farley v. Aetna Life Ins. Co., 200 Mo.App. 460, 207 S.W. 281; Arnold v. Travelers' Ins. Co. of Hartford, Conn., 48 R.I. 208, 136 A. 690, 691, 56 A.L.R. 488; 29 Am.Jur., page 765, Sec. 1013.

To this list of cases construing this language there is the one exception. This exception is Wilkinson v. Aetna Life Ins. Co., 240 Ill. 205, 88 N.E. 550, 25 L.R.A.,N.S., 1256. It was this last case that the Court of Appeals followed herein.

From the foregoing statement it is obvious why we granted the writ. The case has now been ably briefed and argued and we have the matter for disposition.

The Court of Appeals concurred with the finding of the Chancellor:

'that the evidence preponderates in favor of the defendant's theory that the fire originated from the deceased smoking in bed, and that the principal cause of the deceased's death was from burns sustained from the burning mattress and bed clothing rather than the burns sustained from the burning floor.'

The Court of Appeals further said:

'The proof is far from conclusive on this score.'

The insured was a 65-year-old man and he occupied an apartment in the home of a lady in Memphis, Tennessee. The night of March 14, 1953, after the owner of the home had retired her attention was attracted to a noise coming from the direction of the deceased's apartment. She describes the noise as a thud, like a person falling on the floor, and upon going to the rear of the house to investigate, she detected the odor of burning rags and saw smoke pouring from the rear window of the deceased's apartment. She was unable to arouse his attention and found that the door was locked on the inside and as a result of this she called the fire department. The firemen broke into the room and found it filled with smoke but saw no flames. The fire was confined to the mattress on the bed which did not 'flame up' until the firemen threw the mattress out the window. The deceased was lying on the floor alongside of the bed. There was a 'scorched place' or burned place on the floor near or about where the deceased was lying which could not be sanded out but the planks had to be cut out where this burned place was. The flame and fire was confined to the mattress entirely

The investigators at the fire department testified that the insured's injuries resulted from the fire in the bed. The deceased died shortly after being taken to the hospital but before his death he was able to give the police department some information about how the fire started. He says that 'he woke up from the smoke in the room', and it was from this that the police department concluded that the deceased (insured) was smoking in bed 'because that could be seen, that the bed caught on...