Midwest Dairy Products Corp. v. Ohio Casualty Insurance

Section 27 of the Motor Vehicle act (Cahill's Stat. 1933, p. 1892; Smith's Stat. 1933, p. 2514), provides, among other things, that no chauffeur's license shall be issued to any person under eighteen years of age. Although a chauffeur's license may be denied a person over the age of eighteen years because of the absence of some qualification other than age, it is manifest, from the plain language of the section, that under no circumstances may a person under the requisite age obtain a license. The denial of a license to a person under the age of eighteen years, who may possess all the other qualifications and comply with all the other conditions prescribed by section 27 obviously would be owing to his age. It is equally clear that the operation of an automobile by such a person as a chauffeur would be a violation of the law because of age and for no other reason.

The pertinent provision of the policy of insurance in this case is: "This policy does not cover any loss, damage or expense * * * while the automobile insured hereunder is operated or used by any person in violation of law as to age, or in any event under the age of fourteen years." The policy covered fifteen trucks and three passenger automobiles used by the salesmen and collectors of the plaintiff in error. The special plea averred, and the demurrer thereto admitted, that, at the time of the accident, the plaintiff in error operated the particular Chevrolet truck by a chauffeur, who was employed for that purpose, and that he was under eighteen years of age. Apart from the question whether the employee had complied with the other requirements for a chauffeur's license, he had not attained the minimum age to obtain such a license. The operation of the truck on July 4, 1931, by the employee as a chauffeur was therefore a violation of the law respecting age. Section 29 of the Motor Vehicle act provides that no person or corporation shall employ, as a chauffeur or operator of a motor vehicle, any person not specially licensed as required by the act. The plaintiff in error violated this section when it employed the driver of the truck. Since both sections 27 and 29 were violated by the operation of the truck under the circumstances stated, it necessarily follows that the cause of action which the plaintiff in error seeks to maintain arose "while the automobile insured hereunder is operated or used by any person in violation of law as to age."

To extend the provision of the policy in question to sustain the demands of the plaintiff in error, the majority of the court invokes the familiar rule that, when an insurance contract is so drawn as to be ambiguous, or to require interpretation, or to be fairly susceptible of two different constructions, so that reasonably intelligent men on reading the contract will honestly differ as to its meaning, that construction will be adopted which is most favorable to the insured. (United States Fidelity and Guaranty Co. v. Guenther,281 U.S. 34; Chicago Nat. Life Ins. Co. v. Carbaugh, 337 Ill. 483; Kimbell Trust and Savings Bank v. Hartford Accident andIndemnity Co. 333 id. 318; Crosse v. Knights ofHonor, 254 id. 80). This canon of construction, however, does not authorize a perversion of language or the exercise of inventive powers for the creation of an ambiguity where none exists. (Crosse v. Knights of Honor, supra). The rule is equally well settled that contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms which the parties have used, and if they are clear and unambiguous, their terms are to be taken and understood in their plain, ordinary, and popular sense. (UnitedStates Fidelity and Guaranty Co. v. Guenther, supra; ChicagoNat. Life Ins. Co. v. Carbaugh, supra; Kimbell Trust andSavings Bank v. Hartford Accident and Indemnity Co. supra;Crosse v. Knights of Honor, supra). The parties to an insurance contract may incorporate in it such provisions, not in violation of law, as they choose; and it is the duty of the courts to construe and enforce the contract as made. Courts have neither the right nor the power to make a new contract for the parties. Imperial Fire Ins. Co. v. Coos County,151 U.S. 452; Blume v. Pittsburgh Life and Trust Co. 263 Ill. 160;Crosse v. Knights of Honor, supra; Norwaysz, v. ThuringiaIns. Co. 204 Ill. 334.

The United States Circuit Court of Appeals for the Eighth Circuit, in the case of Maryland Casualty Co. v. Friedman,45 F.2d 369, upon a provision in an insurance policy practically identical with the one under review, held that no problem of construction or interpretation was presented. The policy of insurance in that case was issued to Sam Friedman and covered his Ford truck. While the truck was operated in Kansas City, Missouri, by an employee named Bohnbank, a collision occurred between the truck and a motorcycle driven by one Bates. At the time of the accident Bohnbank was over sixteen and under eighteen years of age. Bates sued Friedman and recovered a judgment which the defendant paid. The insurer refused to reimburse Friedman on the ground that it was not liable under the provision: "This policy does not cover while the said automobile or automobiles are * * * being operated by any person under the age limit fixed by law, or under the age of sixteen years in any event. * * *." The applicable provisions of the Missouri statute prohibited a person under the age of sixteen years from operating a motor vehicle on the highways of that State, defined the terms "chauffeur" and "registered operator," and provided that no certificate of registration as a chauffeur or as a registered operator should be issued to any person under the age of eighteen years. The act also contained a provision forbidding the employment of unregistered chauffeurs or operators. The court observed: "The broad purposes of the several statutory enactments * * * were (1) to prevent anyone under the age of sixteen from operating a motor vehicle on the highways of the State; (2) to prevent anyone under the age of eighteen, or without a certificate of registration from operating a motor vehicle; (a) as a 'chauffeur,' and (b) as a 'registered operator,' as those terms are defined in the statute. * * * We are of the opinion that 'the age limit fixed by law' was eighteen years for the driver of the automobile truck in question under the circumstances disclosed. It is conceded that he was under that age. The liability incurred by reason of the accident was therefore not within the coverage of the policy."

In the case of United States Fidelity and Guaranty Co. v.Guenther) 281 U.S. 34, the policy of insurance provided that it should not cover any liability of the assured while the automobile was "being operated by any person under the age limit fixed by law or under the age of sixteen years in any event." It appeared that the city of Lakewood, Ohio, in which the car covered by the policy was operated, had in force an ordinance which made it unlawful for any owner, bailee, lessee or custodian of any motor vehicle to permit a minor under the age of eighteen years to operate it upon public highways, streets or alleys in the city. The car was driven by a person seventeen years of age and personal injuries were inflicted upon a third person. The injured person sued Guenther and recovered judgment. Guenther having paid the judgment, brought an action on the policy against the insurance company to recover the loss and expense he incurred in the personal injury suit. The Supreme Court of the United States decided that the phrase "fixed by law," as used in the policy, included valid municipal ordinances as well as statutes and that the provision of the policy exempted the insurer from liability where the operator of the automobile had not attained the age fixed by the ordinance.

The Federal Supreme Court, in its consideration of the foregoing case, said "* * * when the words of the exclusion clause are taken in their ordinary meaning they are free from any ambiguity that requires them to be construed most strongly against the company. The plain and evident purpose of the clause was to prevent the company from being held liable for any accident occurring while by reason of the age of the operator the automobile was being operated in violation of law. To that end liability was excluded when the operator was under 'the age limit fixed by law.' This is not limited to the case where the age limit is fixed by 'a law,' a specific phrase frequently limited in a technical sense to a statute, which, to say the least, would have involved doubt as to whether a municipal ordinance was included. On the contrary the clause used the broad phrase 'fixed by law,' in which the term 'law' is used in a generic sense, as meaning the rules of action or conduct duly prescribed by controlling authority, and having binding legal force; including valid municipal ordinances as well as statutes." The court also observed: "We think that within the plain meaning of the policy the operator of the automobile was 'under the age limit fixed' by the ordinance. True it is that the ordinance does not fix a general age limit for operators of automobiles. But as the ordinance makes it unlawful for the owner of an automobile to permit a minor under eighteen years of age to operate it, to say that where the owner permits a minor only seventeen years of age to operate it the operator is not 'under the age limit fixed' by the ordinance would be merely sticking in the bark." This decision necessarily negatives any ambiguity in the provision of the policy under review. If Guenther's automobile was operated by a person under the "age limit fixed by law," it follows that the motor truck in this case was operated by a person "in violation of law as to age."

The majority of the court, however, seeks to dispose of the case of United States Fidelity and Guaranty Co. v. Guenther by asserting that it "is readily distinguishable from the case at bar" and that "There was no ambiguity in the meaning of the policy there before the court." Mere assertion will not create a distinction or exclude from consideration an adjudication of the highest authority. If there was no ambiguity in the provision of the policy of insurance involved in that case, as the majority of the court concedes, there can be none in the provision of the policy under consideration. Nor does the statement in the opinion of the majority that "Here the provision for a licensed chauffeur is not an age limit but is a chauffeur statute," carry conviction. The present policy excludes liability arising out of the operation of the automobile insured by a person "in violation of law as to age." The exclusion is not confined to an age limit fixed by "a law," as the opinion of the majority declares, but in the broad phrase "in violation of law," the word "law" is used in a generic sense, meaning, as the Supreme Court of the United States has said, "the rules of action or conduct prescribed by controlling authority and having binding legal force, including valid municipal ordinances as well as statutes."

If no question of construction or interpretation could arise in the cases of Maryland Casualty Co. v. Friedman and UnitedStates Fidelity and Guaranty Co. v. Guenther, none is discernible in the present case. The plaintiff in error, through its employees, operated a number of trucks. The policy upon which it instituted suit expressly exempts the defendant in error from liability for loss, damage or expense resulting from the use or operation of the automobile insured in violation, not of a particular act, but of law, and consequently every act or law, respecting age. The imposition of liability upon the defendant in error varies and extends the plain and unambiguous provisions of a contract entered into by parties legally competent to make it. By its decision that the insurer is liable notwithstanding violations of the law, both by the employer and the employee, the court makes a new contract for the parties and creates a liability where none existed. It is not the function of courts to render ambiguous the simple language of a contract that is free from ambiguity; it is, on the contrary, essentially a judicial duty to uphold the sanctity of a valid contract.

In my opinion, the judgment of the Appellate Court should be affirmed.