Gould Morris Electric Co. v. Atlantic Fire Insurance Co.

50 S.E.2d 295, 229 N.C. 518, 1948 N.C. LEXIS 344

• Court: Supreme Court of North Carolina
• Decided: November 24, 1948
• Status: Published

Opinion

Stacy, C. J.

In the court below, and here, the parties have selected the proper construction of the phrase “collision of the conveyance on which the goods are carried” as the battleground of debate and the crucial question for decision.

While this language, standing alone and strictly construed, might limit liability to a collision of the conveyance itself and not extend to a collision of the load on the truck, as held below, we regard the interpretation too restrictive under all the terms of the policy.

In the first place, the policy is a single “Trip Transit Policy,” which within itself implies protection to the property while in transit on the particular trip. The purpose of the policy was to insure the cargo, not the truck, while in transit from Nashville, Tenn., to Raleigh, N. C. Undoubtedly the plaintiff thought it had such insurance.

Secondly, it insures against loss or damage to specific items of property, i.e., water heaters, and not against loss or damage to goods or merchandise generally. Thus, the parties knew, from the amount of insurance and the character of the shipment, that, in all probability, portions of the cargo would extend above the top of the truck.

Thirdly, whether the enumeration of the usual causes of loss or damage in the third paragraph of the policy was intended as enlargements or limitations on the liability declared in the first two paragraphs is not altogether clear. Hence, the construction favorable to the insured and consistent with the purpose for which the policy was issued becomes pertinent. Jones v. Casualty Co., 140 N. C. 262, 52 S. E. 578.

Policies of liability insurance, like all other written contracts, are to be construed and enforced according to their terms. If plain and unambiguous, the meaning thus expressed must be ascribed to them. But if they are reasonably susceptible of two interpretations, the one imposing liability, the other excluding it, the former is to be adopted and the latter rejected, because the policies having been prepared by the insurers, or by persons skilled in insurance law and acting in the exclusive interest of the insurance company, it is but meet that such policies should be construed liberally in respect of the persons injured, and strictly against the insurance company. Roberts v. Ins. Co., 212 N. C. 1, 192 S. E. 873, 113 A. L. R. 310; Underwood v. Ins. Co., 185 N. C. 538, 117 S. E. 790; Bray v. Ins. Co., 139 N. C. 390, 51 S. E. 922; Bank v. Ins. Co., 95 U. S. 673.

Here, the policy on its face insures against loss or damage to the cargo while in transit, and the enumeration of the methods by which loss or damage usually occurs was intended primarily as a description of the ordinary ways and means of sustaining loss or damage, rather than a limitation of liability. That such was the mutual intent and within the contemplation of the parties is readily gathered from the language of the instrument as a whole. Jones v. Realty Co., 226 N. C. 303, 37 S. E. (2) 906. The heart of a contract is the intention of the parties, which is to be ascertained from the expressions used, the subject matter, the end in viewy the purpose sought, and the situation of the parties at the time. Jones v. Casstevens, 222 N. C. 411, 23 S. E. (2) 303.

The above interpretation finds support in at least two cases wEere similar policies were under consideration, one a Michigan case, C. & J. Commercial Driveway, Inc., v. Fidelity & Guaranty Fire Corp., 258 Mich. 624, 242 N. W. 789, and the other a Pennsylvania case, Burks County Const. Co. v. Alliance Ins. Co., 162 Pa. Sup. 153, 56 A. (2) 338.

The cases cited in support of a contrary view, one a Nebraska case, Barish-Sanders Motor Co. v. Firemen's Fund Ins. Co., 134 Neb. 188, 278 N. W. 374, and the other a Massachusetts case, Mendelsohn v. Automobile Ins. Co., 290 Mass. 228, 195 N. E. 104, are distinguishable by reason of variant clauses or factual differences. But, if not, a conflict in the authorities results which gives added emphasis to the suggestion that an ambiguity in a written contract should be inclined against the party who prepared the writing. Wilkie v. Ins. Co.. 146 N. C. 513, 60 S. E. 427.

On the record as submitted, the judgment should have been for the plaintiff.

Reversed.