Seward v. Assurance Co. of America

• Decision Date: 05 July 1963
• Docket Number: No. 394,394
• Court: California Superior Court
• Parties: 218 Cal.App.2d Supp. 895 Jessie I. SEWARD, Plaintiff and Appellant, v. ASSURANCE COMPANY OF AMERICA, a corporation, Defendant and Respondent. Appellate Department, Superior Court, Alameda County, California

Page 821

32 Cal.Rptr. 821

218 Cal.App.2d Supp. 895

Jessie I. SEWARD, Plaintiff and Appellant, v. ASSURANCE COMPANY OF AMERICA, a corporation, Defendant and Respondent.

No. 394.

Appellate Department, Superior Court, Alameda County, California.

July 5, 1963.

Smith, Parrish, Paduck & Clancy, Robert S. Juhl, Oakland, for plaintiff and appellant.

Long & Levit, John B. Hook, San Francisco, for defendant and respondent.

QUAYLE, Judge.

Appellant sued respondent insurance company for the value of her diamond-studded lady's wrist watch which disappeared during a shopping tour. Respondent had issued her a broad form theft policy covering her personal property. After judgment against her in the trial court she brings this appeal on a settled statement of facts, which may be substantially summarized as follows:

On May 27, 1961 appellant placed the watch on her left wrist. She then proceeded on a shopping tour in her automobile. She went to several stores and made various purchases. During the course of her shopping tour she noticed that the wrist watch was missing. She retraced her steps but was unable to find it. She reported the incident to the police and she advertised in several daily papers but no information was elicited. When she bought the watch in 1949 she had a safety chain placed upon it. But the safety chain caught on things and broke. It was finally removed some time prior to the incident in question. The manufacturer of the watch had placed a double lock on it to hold it closed around the wrist. This had always proved adequate for this purpose. It was in good mechanical condition at the time. Appellant was at no time aware of the watch coming unlocked or loose. During the shopping tour she was in several crowded stores and was carrying large bundles in her arms but she recalls no incident where she was pushed or jostled. She does not know what happened to her wrist watch, whether it was lost or stolen. She does not suspect anyone of stealing her watch.

The policy in question is a Comprehensive Dwelling Policy that includes what is designated 'Coverage Group B--Broad Form Personal Theft Coverage.' In part this coverage provides: 'Division II--Theft Away from the Premises. This company agrees to pay for loss by theft or attempt thereat or mysterious disappearance away from the premises of personal property which is owned or used by an insured or is owned by a residence employee thereof.'

Appellant contends that her wrist watch was lost by theft or mysterious disappearance within the coverage defined in the policy. She cites Englehart v. Assurance Company of America (La.App.1961) 139 So.2d 108, which presents a similar policy and a somewhat similar fact situation. There seems to be no reported California cases on the subject and respondent concedes that the Englehart case probably states the applicable law. Respondent relies on the trial court's findings and contends that inferences can be adduced from the evidence that supports the judgment.

The coverage clause in Englehart v. Assurance Company of America (supra) requires the insurer 'to pay for loss by theft or attempt thereat or mysterious disappearance.' This language is identical to that contained in appellant's policy. Under this coverage Englehart sought recovery of the value of a ring which he removed from his finger and placed on a dresser during a visit to his daughter's home. Some hours later it was missing. He suspected no member of the family of theft. Some of his clothing had in the meantime been sent out for dry cleaning. The dry cleaner testified that the clothing had been systematically inspected on arrival at the plant and the ring was not found. This was important because the Englehart policy expressly excluded loss of property 'in the charge of any lundry, cleaner, dyer, tailor or presser.' We have no such issue in the case at bench. The trial court found for defendant on the ground that the possibility of theft under these facts was remote and such a loss would not constitute a 'mysterious disappearance' under the policy.

The appellate court reversed the judgment and held that the facts presented constituted a 'mysterious disappearance' of Englehart's ring. It pointed out that the cases relied on in the trial court dealt with a different type of coverage. The leading case on the subject, Davis v. St. Paul Mercury & Indemnity Co. (1946), 227 N.C. 80, 40 S.E.2d 609, 169 A.L.R. 220, dealt with a policy insuring theft where 'the word 'theft' includes larceny, burglary and robbery. Mysterious disappearance of any insured property shall be presumed to be due to theft.' Under such language 'mysterious disappearance' merely raised a presumption of theft which could be weighed with all other evidence in the case to decide the ultimate question: 'Was the loss due to theft?' Where the facts indicated that theft was impossible or improbable, the loss was not covered. The language raised a rebuttable presumption and did not broaden the coverage clause to insure mysterious disappearance as such. This reasoning is discussed in 169 American Law Reports 233, and is followed in Loop v. United States Fidelity & Guaranty Ins. Co. (La.App.1953) 63 So.2d 247; Deckler v. Travelers Indemnity Co. (La.App.1957) 94 So.2d 55; Caldwell v. St. Paul Mercury & Indemnity Co. (1950) 210 Miss. 320, 49 So.2d 570; Casey v. London & Lancashire Indem. Co. (1957) 5 A.D.2d 724, 168 N.Y.S.2d 692; Levine v. Accident & Casualty Ins. Co. (1952) 203 Misc. 135, 112 N.Y.S.2d 397. Each of these cases contained coverage clauses similar to the Davis case.

The Englehart policy on the other hand covered 'loss by theft or attempt thereat or mysterious disappearance.' (emphasis added) This disjunctive use of the words changes the legal effect of the coverage. 'Mysterious disappearance' no longer raises a presumption of theft which constitutes a contractual 'rule of evidence binding on the parties' to the insurance contract. Here 'mysterious disappearance' becomes a risk covered by the policy. Therefore it is the duty of the court to define that term and if the loss falls thereunder to allow recovery.

"'Disappear' means to cease to be known, to be lost, Webster, New Int. Dic.; to cease to...