Opinion
No. 30329
Decided November 21, 1945.
Insurance — Contract construed liberally in favor of insured, when — Doubtful, uncertain or ambiguous language used — Term "theft" given usual meaning accorded thereto by ordinary persons — Automobile theft policy — Insurer liable where automobile wilfully and wrongfully taken — With design to hold or use in violation of owner's rights.
1. A contract of insurance prepared and phrased by the insurer is to be construed liberally in favor of the insured and strictly against the insurer, where the meaning of the language used is doubtful, uncertain or ambiguous.
2. Where the term "theft" is employed but not defined in an automobile insurance contract, it is to be given the usual meaning and understanding accorded it by persons in the ordinary walks of life.
3. In an insurance contract insuring against the "theft" of an automobile, the term "theft" comprehends the wilful taking or appropriation of one person's automobile by another wrongfully, without justification and with the design to hold or make use of the vehicle in violation of the rights of the owner, and recovery by the insured for loss due to "theft" may be had where a taking or appropriation of the insured automobile in the manner and for the purpose described is shown.
APPEAL from the Court of Appeals of Hamilton county.
The Hartford Fire Insurance Company, as insurer, issued its "Standard Automobile Policy," with "Garage Keepers' Legal Liability Coverage Endorsement" attached, to Homer Toms Motor Car Company Olympic Garage as the insured. The insurance contract provided a liability limit of $75,000, and was effective from November 9, 1943, to November 9, 1944. Such contract insured the policyholder as to certain hazards in connection with automobiles belonging to others and left in his custody, among them being "theft."
Toms, d. b. a. Homer Toms Motor Car Co., Olympic Garage, operated a public garage in the city of Cincinnati. About 2:30 o'clock on the morning of September 27, 1944, one Bourne, employed by the appellee, who admitted he had consumed a quantity of beer and was under the influence of alcohol, appeared at the garage, accompanied by some newly acquired acquaintances. Without any authorization and over the protest of a garage attendant then on duty, Bourne drove from the garage an automobile belonging to the Liberty Mutual Insurance Company, which had been stored there, stating that he was going to take his friends home and would return the car to the garage.
However, Bourne and his companions proceeded in the automobile to a so-called country club at Covington, Kentucky, where they remained for an appreciable length of time. After leaving the country club, a collision occurred between the automobile, owned by the Liberty Mutual Insurance Company and driven by Bourne, and another motor vehicle, with resultant damage of a serious nature. Bourne maintained that it was his intention to take his friends home from the country club and then return the automobile to the garage from whence he had removed it. His expressed intention was never consummated.
The Liberty Mutual Insurance Company instituted suit against Toms in the Municipal Court of the City of Cincinnati to recover the damage to its vehicle. Toms' insurer, appellant herein, declined to assume defense of the action, on the ground that the damage was occasioned under conditions not within the coverage of the insurance contract.
A finding and judgment were rendered against Toms. Separate findings of fact and conclusions of law were made. The conclusions of law were as follows:
"The evidence presented by the plaintiff raises a prima facie case of liability against the defendant; that a theft of the automobile occurred while in the custody and control of the defendant; that the defendant having failed to exercise ordinary care of the bailor's property to prevent the theft of said automobile while in his possession as bailee; the plaintiff is entitled to recover the sum of $335.83 and its costs herein expended."
Thereafter, Toms brought suit in the Cincinnati Municipal Court against The Hartford Fire Insurance Company to recover the amount of the judgment, costs and $100 for attorneys' fees in the prior action, upon the claim that Hartford was liable under its contract of insurance and should have defended the initial action. Toms recovered judgment for $440.90 and costs, which judgment was affirmed by the Court of Appeals.
The cause is now here pursuant to the allowance of a motion to require the Court of Appeals to certify its record.
Mr. Bert H. Long and Mr. Milton M. Bloom, for appellee.
Mr. August A. Rendigs, Jr., Mr. Elmer E. Strasser and Messrs. Myers Snerly, for appellant.
Opposing counsel agree that an important feature of this case is the meaning to be given the term "theft" as used in the insurance contract involved. Consequently, we shall first direct attention to that subject.
The insurance contract provides insurance coverage for "loss of use [of an automobile] by theft," "Theft, if the entire automobile is taken," and "D-1 theft (broad form)."
No definition of the terms "theft" or "larceny" appears anywhere in the insurance contract.
A clause of the contract also provides that the insurer will defend any suit against the insured "as respects insurance afforded by this endorsement * * * even if such suit is groundless, false or fraudulent."
On this appeal counsel for the appellant earnestly contend that appellant is liable only if a "theft" of the automobile occurred; that to constitute "theft" an intent permanently to deprive the owner of his property must be shown; that no such intent on the part of Bourne is disclosed by the evidence; and that, therefore, the situation is not covered by the terms of the insurance contract, the insurer is not liable for the loss and was not obliged to defend the original suit instituted against the appellee by the owner of the automobile taken.
To fortify this argument, a number of cases are cited, some of which are mentioned or reported in 89 A. L. R., 465, annotation; 133 A. L. R., 920, annotation; and 152 A. L. R., 1100, annotation.
It must be conceded the cited cases do hold that to constitute "theft" of an automobile within the meaning of the terms of a policy insuring against such contingency, a claimant under the policy must prove a criminal intent permanently to deprive the owner of his property. However, recent cases have announced and applied a more liberal rule.
In Ohio the general principle is well recognized that a contract of insurance prepared and phrased by the insurer is to be construed liberally in favor of the insured and strictly against the insurer, where the meaning of the language used is doubtful, uncertain or ambiguous. 22 Ohio Jurisprudence, 340, Section 185.
Moreover, this court has stated that in an insurance policy indemnifying against the loss of an automobile by "theft," that word should be given the usual meaning and understanding accorded it by persons in the ordinary walks of life. Royal Ins. Co., Ltd., v. Jack, 113 Ohio St. 153, 148 N.E. 923, 46 A. L. R., 529.
The word "theft" is not defined by the statutes of Ohio relating to crimes and offenses, and different courts have given various definitions of the term.
In Black's Law Dictionary (3 Ed.), 1725, "theft" is defined as "the fraudulent taking of corporeal personal property belonging to another, from his possession, or from the possession of some person holding the same for him, without his consent, with intent to deprive the owner of the value of the same, and to appropriate it to the use or benefit of the person taking."
In 3 Bouvier's Law Dictionary (Rawle's 3 Rev.), 3267, it is stated, "theft" is "a wider term than larceny and includes other forms of wrongful deprivation of property of another. * * * Acts constituting embezzlement or swindling may be properly so called."
We think it may be accurately said that to "the man on the street" the word "theft" is of broader scope than "larceny" and comprehends essentially the wilful taking or appropriation of one person's property by another wrongfully and without justification and with the design to hold or make use of such property in violation of the rights of the owner. In our opinion, where the word "theft" is used in an insurance policy, without definition, it should be interpreted as liberally as possible to protect the insured.
An interesting case is that of Boyle v. Yorkshire Ins. Co., Ltd., 56 Ontario Law Rep., 564, in which, under facts similar to those existing here, the court allowed recovery under a policy insuring against "theft," where it appeared that the taking of the motor vehicle was "fraudulent and without colour of right."
Attention is also directed to the recent case of Pennsylvania Indemnity Fire Corp. v. Aldridge, 117 F.2d 774, 133 A. L. R., 914, where in an elaborate and persuasive discussion the court held that to recover indemnity for "theft" of an automobile, under a policy insuring against it, an intent permanently to deprive the owner of his property need not be established; and that it is sufficient if the proof demonstrates an intentional appropriation of the automobile "to a use inconsistent with the property rights of the person from whom it is taken."
Clearly, within such rule, there could be recovery in the present action for the loss sustained.
The decision of the federal court just cited has been approved and followed in several later cases, including Baker v. Continental Ins. Co., 155 Kan. 26, 122 P.2d 710, and is indicative of the present trend of authority.
See, also, James v. Phoenix Assur. Co., 75 Colo. 209, 225 P. 213; Block v. Standard Ins. Co. of New York, 292 N.Y. 270, 54 N.E.2d 821, 152 A. L. R., 1097; Globe Rutgers Fire Ins. Co. v. House, 163 Tenn. 585, 45 S.W.2d 55.
After an examination of numerous cases, with special regard for their reasoning and their approach to the particular problem presented, it is our conclusion that construing the instrument herein liberally in favor of the insured the determination is justified under the evidence that there was a "theft" of the automobile within the coverage provided by the contract, and that the judgments of the courts below to that effect are supportable.
Taking this view of the matter, it becomes unnecessary to consider or decide whether the finding and judgment in the case of the Liberty Mutual Insurance Company vs. Toms, heretofore mentioned, in which it was adjudged that a theft of the automobile in question had occurred, operate to estop the appellant herein, which failed to defend that action, from relitigating the same issue in the instant case.
Being of opinion that the judgment of the Court of Appeals is without error, the same is affirmed.
Judgment affirmed.
WEYGANDT, C.J., BELL, WILLIAMS, TURNER and HART, JJ., concur.
MATTHIAS, J., concurs in the judgment.