American Mutual Liability Insurance v. Duesenberg

ON PETITION FOR REHEARING. Our interpretation and application of Utica Mutual InsuranceCo. v. Glennie (1928), 132 Misc. Rep. 899, 230 N.Y.S. 673, cited and quoted from in the main opinion, has been 6. challenged by a petition for rehearing. Appellant says that Glennie, the president of the corporation, at no time attempted to assert a claim against the insurance carrier but that the action was brought by the insurance company against Glennie, his company, and the driver of the car in which he was riding, for a declaratory judgment to determine whether under paragraph V of the policy the insurance company was bound to defend a prior action brought by Glennie against his company for damages. Appellant's statement of the factual background of the Glennie case is correct, but in the consideration of precedents courts do not look so much for identity of facts as for statements of applicable principles. That the Glennie case was prosecuted to determine if the insurance company was liable for the expenses of a former suit does not mitigate against the conclusion of the court that the words "and also," followed by Paragraph V of the policy (identical with the contract before us), added to and extended the scope of the contract of insurance so as to include an executive officer of the corporation. Nor is the purview of the case weakened by the fact that the insurance company may have been liable under another express provision of the policy. We are concerned primarily with the interpretation to be placed on Paragraph V and the liabilities created thereby. We quoted from the Glennie case because the principles therein stated are logical and helpful in determining the rule to be applied.

Appellant suggests that we consider two additional cases not mentioned in the original briefs. In Fidelity and Casualty Co.of New York v. Gray (1937), 181 Okla. 12, 72 P.2d 341, an employee sought to recover under his employer's workmen's compensation policy for disability due to an occupational disease. The injury was not accidental and the policy contained no promise to pay for non-accidental injuries under any circumstances. Recovery was accordingly denied. Much is said in the opinion relative to rules of construction applicable to insurance policies, but we do not consider these important in the consideration of the case before us for reasons that will be hereafter noted. Wood v. Employers' Liability Assurance Corp. (1930), 41 F.2d 573, 575, 73 A.L.R. 79, was a case where an employee engaged in agriculture, and by reason thereof not within the protection of the compensation act, sought to recover from his employer and the latter's insurance carrier under a clause of the policy denominated a "voluntary compensation endorsement form," reading as follows:

"In consideration of the premium at which this policy is written, the corporation hereby obliges itself to pay to any employee whose wages are included in the payroll estimate named in this policy, such sums as might be due to such employee for any injury arising out of and in the course of his employment as would be payable if such employee were definitely covered under the provisions of the Indiana Workmen's Compensation Law.

"It is agreed that payment of Compensation as herein provided to employees who are not covered by the said Workmen's Compensation Law shall be in exchange for a release from all further liability for damages; and it is further agreed if any employee elects to refuse the compensation herein provided, the corporation will defend in the name and on behalf of the employer, any claim brought against the employer in accordance with the provisions of paragraph One (b) of the policy. Irrespective of any provisions in this endorsement and in any and every event, the obligations of paragraph One (b) of the policy are limited to the sum of $5,000 for each person injured or killed. Policy is subject otherwise to all its agreements, conditions and declarations."

After observing that "the wording of the . . . indorsement, and the absence of punctuation, renders it very difficult to determine precisely where the minds of the parties met," a divided court in the Wood case applied rules of construction and reached the conclusion that the policy was primarily one for the payment of compensation, and that the rider quoted above merely extended the liability by undertaking to indemnify the insured against such damages as might be recovered by employees who were not within the purview of the compensation act.

We cannot follow the Wood case because we are not dealing with a policy that is indefinite, obscure or uncertain. It would do violence to the law of contracts if we should resort to 7. formulas of construction to vary the meaning of the clear and unambiguous language of the policy under consideration.

Our conclusion is fortified by recent decisions of other jurisdictions. See Thompson v. Parke (1938), 131 Pa. Sup. Ct. 81, 198 A. 819, and McCaleb v. Continental Casualty Co. (1938), (Tex.) 116 S.W.2d 679.

Petition for rehearing is denied.