Summary
In Copelin-Mohn, Inc., v. Buckeye Union Casualty Co., 135 Ohio St. 287, at page 290, 20 N.E.2d 713, the court said: "It is a rule of construction generally followed that where an insurance contract is so drawn as to be equivocal, uncertain or ambiguous, and be fairly susceptible to two or more different but sensible and reasonable constructions, the one will be adopted which, if consistent with the objects of the insurance, is most favorable to the insured.
Summary of this case from Duncan v. J. H. M. L. Ins. Co.Opinion
No. 27140
Decided April 19, 1939.
Burglary insurance — Indemnity against loss from inside chest or compartment of safe — Money placed in either depository protected by policy.
The terms "chest" and "compartment" in a policy of burglary insurance issued to indemnify an insured against loss from "inside the chest or compartment" of a safe therein described, will be held to have been used in an alternative sense, and money placed by the insured for safe keeping in either depository will be deemed protected by the policy.
APPEAL from the Court of Appeals of Lucas county.
This is an action instituted by insured, appellant herein, to recover the loss of money stolen from a safe covered by a policy of burglary insurance issued by appellee herein, as insurer.
The agreed statement of facts discloses that the insurer issued to insured a policy of insurance, indemnifying the latter to the extent of $500, for a period of one year, for loss by burglary of money and securities from within the safe described in the policy.
The safe is described in Item 9 of the policy, thus:
"Safe Safe "No. 1 No. 2
"(a) Maker's name Pixley "(b) Safe number, style or 935K # letter 3619 "(c) The safe proper is 'Fire- Proof' or 'Burglar-Proof' or 'Fire-and-Burglar-Proof' or 'Semi-Burglar-Proof' (State which): Class 'D' "Fire and burglar-proof — Safe "(d) Thickness of outer safe door exclusive of bolt work 3/4 inches "(e) Thickness of solid steel (if any) in outer safe door exclusive of bolt work 1" inches "(f) Thickness of solid steel in middle door (if any) ex- clusive of bolt mark — inches "(g) Thickness of solid steel inner chest door (if any) exclusive of bolt work 1-1/2" inches "(h) The doors of the safe are locked by combination locks as follows: "(1) Outer safe door Combination "(2) Middle door __________ "(3) Inner chest door Combination "(i) Name of Special locking device and door on which installed "(j) The safe was purchased new or second-hand in the year Second Hand "(k) Price paid for safe by assured $ ...... "(l) The safe is or is not within the vault described No vault in Item 10: required."
On June 27, 1936, while the policy was in full force and effect, the safe and compartment within the safe were forcibly entered and the sum of $719.12 was taken therefrom.
It is disclosed by the agreed statement of facts that the safe contained a steel chest equipped with a combination lock which was out of order for some time prior to the burglary; that the insured kept its money in a wooden compartment within the safe, which locked by key; and that at the time the safe was burglarized, both the safe and the compartment door were locked but were opened by the burglars by the use of force and violence, of which force and violence visible marks were left on the outside door of the safe and upon the door of the compartment.
The insurer denied, and still denies, liability for the loss on the theory that under the terms of the policy the money was to be kept in the steel chest and not in the compartment. The trial court rendered judgment for the insured, but on appeal on questions of law, the Court of Appeals of Lucas county reversed the judgment of the trial court and entered final judgment for the insurer. The cause is in this court on the allowance of a motion to certify.
Messrs. Fraser, Effler, Shumaker Winn, for appellant.
Mr. William A. Finn, for appellee.
The sole question presented for our determination is whether the loss is covered by the terms of the policy.
Item 7 of the declarations of the policy reads: "The insurance granted by this policy, including such damage as is covered hereby, shall apply specifically as follows: * * * (b) Inside, the chest or compartment in safe No. 1 — $500 * * *."
The pertinent portion of paragraph D of the conditions of the "Insuring Agreements" reads: "The company shall not be liable under Sections (b) or (d) of item 7 of the declarations, for the loss of property from within the chest or compartment contained in any safe, unless both the safe and the chest or compartment shall have been entered in the manner specified in Insuring Agreement I * * *."
By "Insuring Agreement" I, the insurer contracts: "To indemnify the assured for all loss by burglary of money and securities * * * from within any safe or vault described in items 9 or 10 of the declarations, occasioned by any person or persons making felonious entry into such safe or vault by actual force and violence, of which force and violence there shall be visible marks made upon such safe or vault by tools, explosives, electricity or chemicals, while such safe or vault is duly closed and locked and located in the assured's premises, or while located elsewhere after removal therefrom by burglars."
The insurer contends that the steel chest, equipped with a combination lock, and not the key-locked wooden compartment, was the depository designated by the policy in which the money was to be kept, arguing that the terms "chest" and "compartment" were synonymously used in the policy. The insured, however, contends that, under the provisions of the policy hereinabove quoted, the compartment was as much a designated depository as was the chest for the safekeeping of its money, and that the terms "chest" and "compartment" were used in an alternative and not in a synonymous sense.
The question at issue must, therefore, be resolved by a construction of the phrase "chest or compartment" as used in the policy. If the terms were synonymously used, then there is no liability, but if used in an alternative sense, then liability attaches.
It is a rule of construction generally followed that where an insurance contract is so drawn as to be equivocal, uncertain or ambiguous, and be fairly susceptible to two or more different but sensible and reasonable constructions, the one will be adopted which, if consistent with the objects of the insurance, is most favorable to the insured. Great American Mutual Indemnity Co. v. Jones, 111 Ohio St. 84, 144 N.E. 596, 35 A.L.R., 1023; 22 Ohio Jurisprudence, 340, Section 185; 1 Couch Cyclopedia of Insurance Law, 375, Section 188.
Is the phrase "chest or compartment" ambiguously used? We are of the opinion that it is. It is susceptible of two different but sensible and reasonable constructions. The terms "chest" and "compartment" may be interpreted as having an identical meaning and also as having alternative meanings. The ambiguity arises from the careless use of the word "or," which may sometimes be used to connect words having the same meaning, as, for example, "that figure is a sphere, or a globe, or a ball," and may sometimes also be used to connect words having a different meaning. See Brown's The Grammar of English Grammars, page 431, Obs. 8. The word "or" may be used in the sense of "that is" and it may be used in the sense of "either — or."
If it was the intention of the insurer to limit its liability to a loss of money from the chest only, it was within its power, as drafter of the policy, to use language more expressive and less ambiguous. An insurer will not be permitted to benefit from an ambiguity of his own creation.
Following the rule of construction above stated, the term "chest" and the term "compartment" must be held to have been used in an alternative and not in a synonymous sense. As thus construed, the insured is entitled to recover on its policy of insurance.
Where a policy of burglary insurance is issued to indemnify an insured against loss from "inside the chest or compartment" of a safe therein described, the terms "chest" and "compartment" will be held to have been used in an alternative sense, and money placed by the insured for safe keeping in either depository will be deemed protected by the policy.
The judgment of the Court of Appeals is reversed and the judgment of the Court of Common Pleas is affirmed.
Judgment reversed.
WEYGANDT, C.J., ZIMMERMAN, WILLIAMS, MYERS and HART, JJ., concur.