Schneider v. New Amsterdam Cas. Co.

• Decision Date: 23 October 1952
• Docket Number: No. A--633,A--633
• Citation: 22 N.J.Super. 238,92 A.2d 66
• Parties: SCHNEIDER v. NEW AMSTERDAM CAS. CO.
• Court: New Jersey Superior Court — Appellate Division

Page 238

22 N.J.Super. 238

92 A.2d 66

SCHNEIDER v. NEW AMSTERDAM CAS. CO.

No. A--633.

Superior Court of New Jersey, Appellate Division.

Argued Oct. 6, 1952.

Decided Oct. 23, 1952.

William H. D. Cox, Newark, for appellant (Cox & Walburg, Newark, attorneys).

Edward J. Abromson, Newark, for respondent.

Before Judges EASTWOOD, GOLDMANN and FRANCIS.

GOLDMANN, J.A.D.

Plaintiff brought an action in the Essex County District Court to recover for property loss under an insurance policy issued to her by defendant. Judgment in the amount of $657.24 was entered in her favor, and defendant appeals.

On July 14, 1951 plaintiff went to the Newark airport to take a Modern Air Transport plane to Miami. She held a round-trip ticket purchased from that company, the price of the ticket including transportation of baggage within a stated weight. Before boarding the plane she checked a lady's bag and a pullman case, containing her clothes and personal effects, with the airline, to be forwarded on the same passenger plane she was taking. The bags were overweight; she paid $1.20 for the excess and received two Modern Air Transport checks limiting the company's liability to $100 for each bag. Plaintiff last saw the bags on the company conveyor, along with other baggage.

Upon arriving in Miami plaintiff presented the checks to the airline, but her baggage was not on the plane, nor did it come on later planes. The company has never been able to locate her property.

At the time of this trip there was in full force and effect a policy issued by defendant insuring plaintiff against property loss through theft. Under 'Coverage B--Theft Away from the Premises,' defendant agreed

'To pay for loss by theft or attempt thereat, vandalism or malicious mischief away from the premises of personal property insured under Coverage A ('Theft from the Premises or a Depository') which is owned or used by the insured * * *.

'This coverage does not apply to:

'(c) property while unattended in or on any automobile, motorcycle or trailer, other than a public conveyance;

'(d) loss of property while in the charge of * * * any carrier for hire;

'Conditions

'1. Definitions. * * *

'(b) 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 limit of insurance under 'Coverage B' was $1,000.

The above facts were stipulated in the court below. Both sides moved for judgment, defendant on the ground that the policy excluded coverage for loss of property by theft while it was in charge of any carrier (clause (d) above), clause (c) being unambiguous and inapplicable, and plaintiff on the ground that clause (c) did apply. In granting plaintiff's motion the court construed the two sections together and applied the rule that if the language employed in an insurance policy is reasonably open to two constructions, the one more favorable to the insured will be adopted. The court assessed plaintiff's damages at a later date and entered the judgment here under appeal.

It is, of course, the almost universal rule that insurance contracts must wherever possible be liberally construed in favor of a policyholder or beneficiary thereof, and strictly construed against the insurer in order to afford the protection which the insured sought in applying for the insurance. Snyder v. Dwelling House Insurance Co., 59 N.J.L. 544, 37 A. 1022 (E. & A.1896); Cohen v. Mutual Benefit Health & Accident Ass'n, 134 N.J.Eq. 499, 36 A.2d 288 (Ch.1944); cf. Caruso v. John Hancock Mutual Life Ins. Co., 53 A.2d 222, 25 N.J.Misc. 318 (Sup.Ct.1947), affirmed 136 N.J.L. 597, 57 A.2d 359 (E. & A.1948). If the meaning of the words employed is doubtful or uncertain, or if for any reason any ambiguity exists either in the policy as a whole or in any portions thereof, the insured should have the benefit of a favorable construction in each instance. Harris v. American Casualty Co., 83 N.J.L. 641, 85 A. 194, 44 L.R.A.,N.S., 70 (E. & A.1912); Kissinger v. North American Union Life Assur. Society, 108 N.J.L. 405, 158 A. 756 (E. & A.1932); Weiss v. Union Indemnity Co., 107 N.J.L. 348, 153 A. 508 (E. & A.1931). And if the policy contains inconsistent or conflicting provisions, the courts will give effect to the provision which gives the greater benefit to the insured. Nuzzi v. United States Casualty Co., 121 N.J.L. 249, 1 A.2d 890 (E. & A.1938). Where, from the language of the policy, it is possible to adopt either of two reasonably consistent interpretations, that construction will be adopted which permits recovery, rather than the one which would deny coverage. Lower v. Metropolitan Life Ins. Co., 111 N.J.L. 426, 168 A. 592 (E. & A.1933), reversing 163 A. 233, 10 N.J.Misc. 1236 (Sup.Ct.1932); Fleming v. Connecticut General Ins. Co., 116 N.J.L. 6, 181 A. 185 (E. & A.1935); Krieg v. Phoenix Ins. Co., 116 N.J.L. 467, 185 A. 21 (E. & A.1936), reversing 180 A. 213, 13 N.J.Misc. 555 (Sup.Ct.1935); cf. Jorgensen v. Metropolitan Life Ins. Co., 136 N.J.L. 148, 55 A.2d 2 (Sup.Ct.1947). 13 Appleman, Insurance Law and Practice (1943), § 7401, p. 50; 1 Couch, Cyclopedia of Insurance Law (1929), § 188, p. 392.

In the absence of a statute to the contrary, an insurance company has the right to impose whatever conditions it chooses on its obligations, not inconsistent with public policy, and the courts may neither add thereto nor detract therefrom. Exceptions, exclusions or reservations in an insurance policy will be construed in accordance with their language and the usual rules governing the construction of insurance contracts.

Our attention, therefore, fixes upon the language of clause (c) under Coverage B, which provides that there will be no coverage of 'property while unattended in or on any automobile, motorcycle or trailer, other than a public conveyance.' We cannot agree with defendant's contention that this language is unambiguous. The difficulty arises by reason of the words 'other than a public conveyance,' which are separated from the preceding language by a comma. A person giving these words their common and ordinary meaning, within the context of the entire clause, might reasonably understand that clause (c) means that where personal property is stolen or mysteriously disappears while on a public conveyance, the owner is covered. Thus, if plaintiff's property...