York Indus. Center, Inc. v. Michigan Mut. Liability Co., 535

• Decision Date: 24 July 1967
• Docket Number: No. 535,535
• Citation: 271 N.C. 158,155 S.E.2d 501
• Parties: YORK INDUSTRIAL CENTER, INC. and York Building Company v. MICHIGAN MUTUAL LIABILITY COMPANY.
• Court: North Carolina Supreme Court

Page 501

155 S.E.2d 501

271 N.C. 158

YORK INDUSTRIAL CENTER, INC. and York Building Company v. MICHIGAN MUTUAL LIABILITY COMPANY.

No. 535.

Supreme Court of North Carolina.

July 24, 1967.

Holding, Harris, Poe & Cheshire, Raleigh, for defendant appellant.

Manning, Fulton & Skinner, Raleigh, for plaintiff appellees.

LAKE, Justice.

The appellant states in its brief that in this case there is no issue of fact. As it concedes, the evidence is sufficient to support the findings of fact by the trial judge. These are, therefore, conclusive. Sherrill v. Boyce, 265 N.C. 560, 144 S.E.2d 596.

The determinative question is, Does the policy issued by the defendant insure the plaintiffs against liability for damage to the land of a third person by the insured's entry thereon and acts thereon due to a bona fide mistake as to the location of the boundary line between the land of the insured and the land of such third person? The basic principles to be applied in answering this question were recently stated by us in Allstate Insurance Co. v. Shelby utual Insurance Co., 269 N.C. 341, 152 S.E.2d 436, as follows:

'It is well settled that, in the construction of a policy of insurance, ambiguous provisions will be given the meaning most favorable to the insured. Exclusions from and exceptions to undertakings by the company are not favored. Jamestown Mutual Insurance Co. v. Nationwide Mutual Insurance Co., 266 N.C. 430, 146 S.E.2d 410; Anderson v. Allstate Insurance Co., 266 N.C. 309, 145 S.E.2d 845. Nevertheless, it is the duty of the court to construe an insurance policy as it is written, not to rewrite it and thus make a new contract for the parties. Hardin v. American Mutual Fire Insurance Co., 261 N.C. 67, 134 S.E.2d 142; Richardson v. Liberty Life Insurance Co., 254 N.C. 711, 119 S.E.2d 871, 87 A.L.R.2d 475; Pruitt v. Great American Insurance Co., 241 N.C. 725, 86 S.E.2d 401.'

The policy, as originally issued, provided coverage against legal liability for the payment of damages because of injury to or destruction of property 'caused by accident.' Subsequently, it was amended by the attachment of a rider providing for the substitution of the word 'occurrence' for the word 'accident' and defining 'occurrence.' For this change in the policy, the plaintiffs paid a substantial additional premium. The necessary inference is that the parties intended that the policy, as amended, would provide substantial additional protection to the policyholder; that is they intended that the word 'occurrence,' as defined in the rider, would bring within the protection of the policy substantial risks not included under the original limitation to damage to property 'caused by accident.'

Since the word 'occurrence' is defined in the amended policy, it must be given that meaning, regardless of whether a broader or narrower meaning is customarily given to the term, the parties being free, apart from statutory limitations, to make their contract for themselves and to give words therein the meaning they see fit. Substituting this agreed definition of 'occurrence' for the word 'accident' in the policy, the undertaking of the defendant is thus stated in the contract of the parties:

'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, * * * caused by an unexpected event or happening * * * which results during the policy period in * * * injury to or destruction of property * * * provided the insured did not intend that injury * * * or destruction would result. * * *'

We turn first to the proviso which excepts from the coverage, otherwise provided by the policy, liability of the insured for injury to or destruction of property intended by him. This, like other exceptions from coverage, otherwise provided by a policy of insurance, is to be strictly construed against the company.

It is obvious that the plaintiffs intended to cut down and destroy every tree which they did destroy on the land of the Wests. It is equally clear that they did so in the belief that these trees and shrubs belonged to them and not to the Wests. That is, the plaintiffs did not destroy the trees with the intent to injure or destroy any property right of the Wests. A fair construction of this excluding clause in the policy is that it is intended to remove from the protection otherwise afforded by the policy only the liability of an insured who wilfully damages property, knowing that he has no right to do so. Therefore, if the judgment rendered against the plaintiffs was for damage to the land of the Wests 'caused by an unexpected event or happening,' the proviso does not eliminate the plaintiffs' claim from the coverage of the policy.

The basis of the plaintiffs' present claim against the defendant is a judgment...