Petition for Writ of Certiorari — Litteral v. Indemnity Insurance Co. of North America

: | Office Supreme Court, us, |

Lite toy | IEE >

“yf 0@Pre er, ot OE 7 ; ; .

; Sout 5 S MAY f y 1982

3. : Ee ~ ,

* | RHN F. DAVIS, CLERK

IN THE

_ Supreme. Court of the United States

ih Tobe ib Trews 161. , :

——__ =

No. 949

JEWEL GABBARD LIPTERAL ayn LOUIS DYSON,

: : . ’ . Petitioners.

rs, .

INDEMNITY INSURANCE COMPANY OF NORTH

- AM ERICA, at ‘ORPORATION -

Re spoude nf.

7 ee eee ee CE Di Rese ts

PETITION FOR WRIT OF CERTIORARI TO THE

COURT OF APPEALS OF THE

SEVENTH CIRCUIT.

(", I. Tate. >

Robeson Suilding,

Champyign. Hino,

’

' Joux ALax Appleman,

The Maples,

Urbana, lines,

Attorue Ws tor Petitioners,

. y -

Journ ALAN- APPLEMAN.

Of Counsel. ox

&

\

THE GUNTHORP WeRPEs FR © TONG COMPARY, Ce Caco Fe

‘Report of Case 2.006.000... Str e uy eee

; o “INDEX.

Basis of Jurisdiction . cb inp eee t essa as gag ee

Questions Presented for Review 0.7 000.000... oo hie

Stateme nt of the ¢ ‘ase -... ie caviar s ae

Summary of Argument o7.......,.. AR Sra are

Argument PRESS IN MR. ee : Petes NEE CO aL ae ers are

Reasons for Allowance of the Writ:

The law of Minis requires a liberal construe-

tion of these overlapping insurance coverages. .

The insurer having promised protection under

4‘overage D ‘commercial use’? cannet nullity

_the promised: protection bya “definition: under

Coverage B . 4.2.22. e eee eee: furs Aimee aes ts

The premiums due under an audit form policy

need not—indeed, cannot-—he paid in advance

of coverage attaching ...-.... eae ks pee

Under Ilinoix law, the certification by the in- «

surer t6 the State of coverage applic ‘able to this

accident ix a binding construction which eon-

trols the right o! of the parties soso eee. . reas

ae

ee ae

3. The airport poliey also covers the occurrence

when the injury resulted from active negligence ?

of the insured ’s/emplovees o../.0000 0000.2...

Couclusion ..... MS eis wera tke et ee Sere .

AUTHORITIES CITED.

Alexander v. Barrett, 46 TD. 226 & - _ee AP, oe. 13 |

Beer. v. Bee r, 154 Ohio St. 271, 16 x, -E. 2d 415, 11s °

te ER es < hs oko wtp a cdecsrewecoses o% 17.

Bituminous Casualty Corp. vo American Fidelity and

Casualty Company, 22 HL App. 2d 26, 199 N. E. 2d 7 20 -

Boutwell ¥. Employers’ Liability . Assurance Corp.

(COA. 5,175 F. 2d 597 at GOO.601 oss. eee 19

City of Chicago v. Chicago, City Railway Company, 245

Ill. App: See GE ONO . 5 csc xwace Sept gcecene rene eeree 10

Collins & Burgie C ompany =. Silvers 1 150 Hl. App. 430°, -

eS 5 MET eee pi hiv Seat tg oe exc eet tas 11

Commercial Credit Corp. v. Mentor, 38 Tenn. App. —

6, 277 S. W. 2429

Connett v. Wi inget, a4 [If 531 ut 15: 30, 30 N. EL 2d 1. 16

Coulter v, American Enipiovers’ Insurance ‘¢ Company,

333 il App. 631; 48. Mit. $0 308 2.3. eee re 20

ae Railrojid c ompany .v. . Tompkins, 304 U.S. 64,

Ct. S17, 82.L. Ed. 1IS8........... Rea ws wae 14

oe Illinois. Law and Practice, ee $149, - .

195, 196 pines Bimcgh Can Bees 3 Pree ee Bio bevaee 16,36

Illinois Revised Statutes, Ch. 153, .%.22.42(a, b). ares BO

HMlinois Supreme Court Rule 1303) /.....5.-+.--.-- 36

Luiubermen’s Mutual Casualty Company v. Employers’ |

Liability Assurance Corp., C. A. Mass., 252 F. 2d 463 20

Moldovan v. United States Fidelity & Guaranty Com-

pany, 15 Mise, 2d 85, IM N. YS. 2d 201 at 204, af. 7

firmed oS A.C. 2d 607, So N.Y. So2d 735. .-.. . oe

Ohio Casualty Company v. Gantt, 256 Ala. 262, 54 So. .

2d 595°at GUI... : eee ager Wis ener rays 16

’

<2

sa

ii

, Hgople v. Adams. 65 ik hie re ie Snes FP

( Pietrantonio v. Travelers Insurance Company. 252

Wisk: 191, 278 SMI. ee ee

“Roth y. Kaptowsky. 26) TL G4 at 41, Gi N. Bode 6d 16

Sehmohl v. Pidhdiek, 39 HL App. Wat Bs

Scott v. Freeport Casuaity Company. ine TN. siz ON Se

“Ss, 347-64 N. B. QA? .. ere. x fh

Standard sisirncn! mt Dusuratice- enon v. Cloutier, wd.

NAH O, BN 2689, AT ALL, R626 he ee

Stetson & | ‘hicage, one i& Elgin Railway ( pei

* 2TIL App. 2d 274 at279, 280, 119 N. E. 2d em at us 10

* Walters ¢ Walters, 409 Hi. sis at B04, a0 XE, 2d 342. 10

Weger v. Robinson Nash Motor Conmpatiy, 340 Ths

Sr ae ae ee yi eee eer Das ae

Woke Lv Glens Falls Ind? mty oxhyany: 200 Te Ave.

“Wait 416 .... pct fe Sn Were Pena

Woodrie ‘hy ( ‘onstruction ( onypih uv v. Lidenmmnity Insur- :

ance ‘Qompany of Novtley America, 202 Minn. a :

ALS ‘a4t2 at 4 de Sere ee 20

of ; nat 3

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ad +e -

IN THE

‘Supreme Court of the - United-States.

Octoser Tero. 1961.

ad .

* ; No .

_JEWE! A. GABBARD LITTERAL axp LOUIS DYSOX,.

Petitioners,

vs.

INDEMNITY INSURANCE COMPANY OF NORTH

as AMERICA, a Corporation. ° *

,° Respondent.

Ce ennai

PETITION FOR WRIT OF CERTIORARI TO THE ~

COURT OF APPEALS OF THE

SEVENTH CIRCUIT. —

— - -—

To the Honorable ¢ hiet Aastyee and Assen jate Snitices of

» the Supreme Court wo the & nite d State <:

Petitioner prays that a writ of certiorari issue to review

the judgment of the Court of Appeals. of the Seventh

_ Cireuit, reported in 300 FL 2d-40, Referetices to (App.

) are to the Appendix bound with our Court of Ap-

peals brief of which ten copies have been filed in this Court.

-

”

2

z BASIS OF JURISDICTION.

The judgment of the Court of Appeals was entered Feh- *

ruary 28,°1962. A petition for. rehearing was filed but

denied on March 30, 1962. Stay « ndate was entered

‘ April 4, 1962. The opinion of the Gonrt of Appeals ap--

pears inthe Appendix to this petition.

taggagorses is invoked under Title 28, United Sfates

Code, §: 1254(1). i ens yo

. o . ‘ hi

QUESTIONS PRESENTED FOR REVIEW.

1. Ww herf the law of Allinois niakes it clear that a broad

construction ix té be given to the naturé of the use insured, ;

and to fleet coverages in general, is not such binding upon

the Federal courts? .

2. When the parposes for which the aircraft policy was.

issued are broadly defined, as to Coverage D, including

-the ‘transportation of executives, employees, guests and

customers’? and inckhiding ‘‘instruction and -rental to

others’’ and **use for. personal, pleasure, fami! y and other

‘+ business purposes’*, can the i difsurer by using a restrictive

' ing insuring agreement?

definition of Coverage KE (apder which ° recovery is ‘not

sought) nullify the protections promised under the preced-

3. Can the insurer rely upon a defense of nonpayment

_of premiums when (a) the coverage is a fleet policy, upon

a reporting form, with premiums to be determined upon

audit ; (b) the insurer admitted (App. 6) that the policy of

Insurance was ‘‘in full force and effect ’’; and (¢) the insurer

_ did net plead or proye any defense of nonpayment of -

premiums? | 2 ee

A. When both the insured, Dyson, and insurance -eom-

_ pany reported to- the State of Illinois that coverage existed

‘upon this aireraft and covered the injuries to the injured

a”

plaintiff, does not such conshitube a construction by the.

« parties which is conclusive upon the coverage issue?

5. When active negligenée of the airport operator and

of. his employees was covergd by the airport policy, and

such negligence would have caused the aceislent to oceur

“irréspective of who ownfd the aircraft; does not suc h

coverage remain in effect even though the policy purports

‘to exclude injuries arising from use of aireraft owned by

. the insured? * inet cn ;

-

.

STATEMENT OF THE CASE. tar tear

Upon November 9.1959, Jean Gabbard Litteral recovered

a judgment in the amount of $25,000 against Louis Dyson,

doing business as Ilini Airport. The findings of faets in

that suit, ax to which there is no quarrel, Zhowed that yipan

September 5, 1955, Louis Dyson was doing business as:

_ Tlini Airport and owned a Globe Swift Model CC-LB air-

plane, which he was attempting to sell to Robert Se hindler

(App. 2). Dyson’ = employees directed: Se ‘hitidler to take

off, Mrs. Litteral being a guest oceupant of the plane, aml |

a. crash occurred, The findings of fact) further disclosed

.. (App. 3,4): af 8 : :

‘that said defendant (Dy son), either by himself or

* by his agents and servants negligently and. carelessly

‘ did one or more of the following acts or, omitted to

do said aets, namely: ag

‘a, Negligently and carelessly directed the. pilot

of said airplane to take said airplane off the ground

A oh: and into the air when a CrOSs wind _ blow tele along

a the. flight strip. ‘

‘th Negligently and careleialy directed the. pilot .

of said airplane to pilot Said airplane into the air when *

it wax too close to the outside edge of the flight strip,

and so as to create a hazard.

te. Negligently and warelessly furnished an air-

plane with a de fective propeller or a prope ‘Her which

rs 4

r

was of a design not suited or proper for. installation

in said airplane.

“d. Negligently and pareliody neta g said air-

“port and operated said airport in violation of the pro-

visions of the Statutes of dilingis and the Civil Aero-

hauties Regulations, and, failed to make an inspection

© Net saidairplane as required, and did negligently and

- etfrelessly operate said airport with a hazard as is

alleged herein, located thereby.’

At that time, Dyson had aij “of his liability insurance with.

the defendant, Indemnity [risurance © onipaily of North

America. One of: these policies was an aircraft listhility

policy AVL ; ING22, the other poliey Was an airport liability

policy, APL 9941 (App. 96 2 ;

Under the aircraft liability policy, Bee liability

provision, coverage D agreed (App. 23

“To pay on behalf of the ae all sums which

the insnred shall beeoime legaily ‘obligated to pay

as damages, including damages for care and loss of

services,” be@ase of bodily, injury,. sickness, “disease

or mental anguish, including death at any Nime result-

ing therefrom, sustained -by any person or persons

other than passengers as defined herein, arising out of

> the ownership, mamtenance or use of thé aircraft as

‘described in this policy.” (Italics supplied.)

The ‘ownership, maintenance or use’? of the aircratt is

set forth in Item 6 of the declarations (App. 21) and was |

defined as **commercijal’’-—the broadest catagory which in-

cluded the lesser categories «and embraced. ** personal,

pleasure, family and other business uses”’, “instructin

and rental to others’, ‘*transportation of executives, am-

ployees, guests and’ customers” (App. 21). i

Coverage EF of that policy dealt with injuries to passen-

vers, Certaingaire raft were added by endorsement from

_ time to time to the policy y tor the specific transportation

_of passengers, and special chine etea were paid for that

coverage ee 12). oe Sion

oe

)

The aircraft lidbility policy, in its basic form (coverage

D) was inthe a vount of $15,000 for iirjury to each person

aml covered ‘tall NC Heensed aireraft owned, Operated,

leased or borrowed Joy the named insured’? and expressly

provided as follows (App. 24):

Armenarr Liasiniry Reportine For ExporseMeNT.

‘Tt is-hereby understood and agreed that:

“T. Nutomatic Attachment and Termination, of

[” . . ;

(overage; = é

-

“The coverages as iudicated ino the, schedule of

Coverages of this poliey shall apply to: all air-

veralt Chavinig an ¢NC ceytificate issued by the

* United State= Civil Neronantios Xe lmministration

awned hy the iuswred-cat the ince ption date of this

paliey and shall automatically apply tocamy Sins

larly certificated aiveraft acquired by the. insured

as owner during the poliey period, This i insurance

shall terminate with respect to any aireraft dis

posed of on the date of sale of such aireraft of the

’ _ surrender of the legal posse xsion thereof by the

‘insured or upon expiration of this polieyy whieh?

~ ever fnay first decur.

: P

oe 3 Beposit Premium and Rates: @

‘The deposit: pre MEN pane able upon inception of.

this poliey is $100.00, . :

~The rates for this. poliey are: ;

Dak - 8.14 per diy, each aireratt

owned or operated,

ie he ‘airport poley Was in the amount of SHO.000 for

tae da es and covered «App. 13):

obligated to pay as damages, ineluding damages for

eare and loss of services, becanse of bodily injury,

sickness, disease or mentalanguish includifig death at

Coverages - Rates ° ‘ o

ity * all satis Which the tusured shall caesinge legally

‘¢ é

any time reswlting therefrom, sustained ly. any person

1° or eins and arising out of the- ownership, main

tenance or use of the airport) premises deseribed in a

the declarations: and all operations which are. neces- :

‘sary or incidental to the ownership, maintenance el

use of sirid pretiisex as an airport.” ; ee.

~

=

That poliey had an exelusion, (f) as follows (Abst. 2x):

“to bodily injury or death or injury to or destrue-

tion of property caused by or arising out of (1) the

existence, maintenance or use of any aircraft sit

by, hired by or for, or loaned to the insured or any.

aireratt in flight hy or ye the account of the insured.

‘nde the law of {itindi«, a report is required to be filed. “nee

Under JIBs Revised Statutes, Ch, 154, ¥ 2242(a, b), a

report is required of any accident involving aircraft in A

Ss this State with a disclosure as to insurance; ind if no | ir

insurance is in fore, the posting of security is required

(Appendix to this’ Petition, p. 35). Purstant to. thigs

statute, a report was filed by the de fondant insurance com.

pany (Abst. 29) as follows:

~

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7 ; . 5 .

INSURANCE COMPANY: Kindly complete this form and return same to Be ea

STATE OF ILLINOIS, DEPARTMENT OF AERONAUTICS

, al r a

CAPITAL AIRPORT s- : . + ACCIDENT nod of g

Springfield, Ilinois = ;

With regard*to the aircraft lability insurance policy, fir ine-policy holder named on the reverse side hereof.

the undersigned insurance company advises you in accordance with the items checked below

() _h No poley was in effect on the date of the acendent “

xr? Our policy affords bodily injury coverage of not less than $5,000 § includes passenger liability =

- for 1 person $10,000 for 2 or more ’ éxcludes passenger liability _—

3 Our policy affords property damage coverage of not less than $5400

Remarks Grbemnitiy Qronsnner Cg WN. A.

by me of Insurance c ompans

. i ~ Authorized Men

Fork at ; - > ="

7 Pe

Av garnishment action was filed by ‘the: injured plaintiff

ayd the insured against the insurance company under the

- tWwogpolicies previously described. The facts were tipu-

lated and appear in the Appendix filed in the Court of

Appeals. °The tria! court found that the airport) poliey

did not cover, on the basis that the accident arose out of

the nse of aireraft owned by the insured: and held that

the aireratt poliey did not cover on the basis that the injury

Was to a’ person whose injury arose under coverage BK,

aud that this particular aireraft was net covered under

coverage Kf, The trial court was affirmed spon appedgl, its

opinion largely being adopted by the retieying court.

The cout reversy involved a diversity of citizenship and:

in amount in controversy, in exeess of $10,000,- thereby

presenting pe federal question.

ba 7 . .

‘ SUMMARY OF ARGUMENT. -

Where an ‘airport ope rator purchases two polici®s from

a single insurer—one covering negligence in airport opera-

tions, and the other a fleet policy upon all aireraft, h he is,

protected by one or both poliei ies when an injury. is‘ re-

ceived by ‘the guest, of a. renter or prospective purchaser

caused by the negliger nee of airport employees.

-A policy which provides or automatic coverage of all

aircraft owned or later acquired by the insured is a fleet

policy. Under both general law and Ilinois Jaw, it is not

necessary that the premium be paid-in advance where a

deposit has been made. and the policy by its terms pro-

vides for premium payment subsequent to ‘taudit’’ at

‘prescribed intervals. In such event, where a broad defini-

tion of: risks insured is given by the face wf the” policy,”

“ineluding **guests"’, ‘trenters’’, ete., stich coverage is con-

ferred by Coverage D. Since recovery ts not sought under -

Caverage EK, such proviso cannot be used fo limit the

liability conferred by Coverage D, by employing a stringent

definition:of passenger

ss

applicable to Coverage E. The

imsurer > by so Using a broad definition of the word ** pas-

senger?* cannot destroy the protection conferred by Cover-

age 1D, as defined by the ‘face of the policy the plafntit?

not being a passenger for hire but only a gyest ocenpant

of the ‘plane, This is especially true where the “parties

have dgmonstrated their practical construction ofthe con-

tract by certifying to the State of Ilfinois that coverage

was available upon this. particular craft and that. it eX:

tended to this injury.

. Likewise, where negligent acts of the insured 's employ-

ees caused the crash to ocear, an exciasion applicable ander

&

ee

the airport policy as to aireraft pwned by the insured did >

not destroy protection against the consequences of such

negligent acts under the general liability provisions. This

is true since such negligence would Have caused the crash

to oceur irrespective of the condition of the aireraft or

of its ownership.

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- ‘ARGUMENT.

eee

When an 1 airport operator pyrehase> from a single com:

pany two policies—-orie intended to cover liability arising,

from all airpert operations other*than caused by aircraft,

and the other: designed to cover liability: resulting from

the use of ‘aircraft, he has a right to expeet protection

under one or the other. It is our conviction that the policy |

contr@ets are ambiguous and deceptive; that the insirance

company did not even conceive of its poliey defense éxcept

at a later date:—ane- that “the opinion of the Court of

“Appeals fails te vive cognizance to the liw of Hlinois con-

trolling in thix <ituation. .

Under [lino law, it has repeateddy bee n 1 stated: that im

ascertaining the n@aning of contractual, terms, the courts

will look to the interpretation which the parties themselves

“have placed upon it by their acts, eondue. or stiite ents.

City of ¢ ‘hicage Vv. Chu age ¢ “tu Ratiway © OM pond 345 Ii.

App. 475 at 408: Stetson vy. Chicaae, Aurora & Elam Rail

way Company, 2 Hi. App. 2d 274 at 279, 280, 119 N. K. “2d

395 at 308: daltons. Wolters, 400 TIL 298 at 304, 99 No.

= 342. Thus, as stated in Weager vy. Ralanson Nash Motor

Company. 340 TL Stat OL 172 NOEL @ at Th:

Tn the gonstrne tion of contracts for the purpose of

‘ascerTtaining the intention @f the parties the wourt will

endeavor, by extrinsic evidence of such facts as the

parties had in view, to place itself as nearly as pos

sible in their position, so that it may understand the

+ danguage used in the sense intended by Dhem. (Cita

~ fions.) In seeking to asee rtain the inte sition. regard

will also’ be had toe the practical Construction, if “any,

which the parties hwo their act have given the con.

&

11

tract. (Whalen vo Stepheus, 193 TL 121.) Se, also, —

the aet~ of the partie~ themselves indieativecof their

cofistruetion placed upon it may be reserted te for the

purpose of determine the trie mening of the writ

fen agreement, and in This regard it makes ne differ

enee whether sach acts are comftempotangatts of sub

. <equent. :

tn facts it was pointed out ini Collings dati Company:

» y. Silver, Lt) Lil. Apps tn \ar ae, V4:

ee Phere os, however. another well) Known rithe ot:

construction applived As Written imstyumernts. viz: that

in construme a written contract the cent will en

degver te plave, eelt in the pen ition of the contracting

parties, and reinel the instrument tn the hictit of he

ciremmstafices surrounding therm at tlie time i was

mide and of the object whieh they then evidentls lau

mi View, so that the court may understand the language

used in the sense intetndedd- bi the puetties sine

(Citations) Ut the ‘intention of hee parties tee sent

few contract rs afticrently apparent, effect wind be

mien er a) that ‘wemse, theadh rile nee be dome

there hy le ats words, tor areater reqard is te le ‘ade

tothe clear intent of the ports Le Ee potty ulu®

words which mau have Neon used in the ¢ pression

Of the amtent” (A itation-~.)

oo * En seoking to ascertain the iyatertit been of thie pray’

ties tod writtery contract regard will be higd te a

practical construction if ant whieh the partion by their

actions have given to the contract" tah. sup

plied.) |

Lou Dy<on ‘tiled his report (Plaingitt’s Exhibit SA)

deseribing the accident and showing that such coverage

was cafried with the Indemnity Insurances Company of 4

* ,

ok ee. 3 wae?

-

North America. The insurer completed and returned the

form to the State of Hlinoix as follows (App. 29):

4

INSURANCE COMPANY Kindly complete this form and return same to

STATE OF ILLINOIS: DEPARTMENT OF AERONAUTICS af ox

“CAPITAL AIRPORT ~ ACCIDENT no ft-? ou ge

Springfield. [limos 7

With regard to the aircraft liability insurance policy for the -poliey he ider named on the reverse cite hereof

the undersigned insurance company advises you im ace dance with the stems checked below ,

» ‘eS No polw y was in effect on the date of the accident) ar

os Oue pokey affords bodily injury coverage of pot less than $000 § ineludes passenger lability =

tor 1 person 10 for 2 ‘or more 1} excludes prasenger paniiity 7

7” 4 ‘ror policy Mm. property damage coverage of not lews thar no

Kemarks . Grbecnns Promran G Ww. A.-

: ee by of ineurence (‘ ompany

. < Aathorized Shae ‘

Format - °

,

ioe ae - £.

The lower courts became confused and referred to this

‘as creating a contract by operation of the doctrines of

“waiver”? or ‘‘estoppel’’. ‘Those doctrines are not re-

quired here. The furnishing of this report constitutes a.

practical construction by the parties that coverage was

then in force, and effect as to this particular oecurre nee.

The furpishing of these reporfs has an important publie

purpose. It is to be certain that findneial security exists

. for airport operators., Had it been certified that there was

* no ipsurance protection here, the State would have re-

quired it to be furnished for the indemnification of other

persons subsequently injured. (See, Appendix to this Peti-

tion, p. 35.) Indeed there Tgp have been past accidents

for which the company certified the existence of insurance

se as to preclude past State investigation of the coveragé

issue. When a report. is required by law, and a statement

is furnished by an authorized representative of an insur.

ance company and such statement -is never withdrawn ore

modified, and it ix reled upon by the public and govern-

5 43.

mental authorities ther we say such insurer ‘would. be’

estopped thereafter to say that such statement is untrue.

And Ilinois has held this to be the proper rule Law-

Vers constantly assert that the law tends.to become more

and more liberal, Yet UMlinois has already adhered to

such a ruling for almost a century.

In’ Ale randern. Barrett 46 Ii. “OO, a suit Wain brought

to recover damages for the bres ih of an oral conttnet to

deliver a. certain number of barrels of tar, the namber °

being disputed. The court declared, at page 220:

“He (plaintii?®) has proved that, although he under-_

stood the contract in a sense much more favorable

to himself, the defendants insisted on- such a contraet

as he has alleged, and although it ix not a case of

estoppel im pais. as suggested by counsel, it is one

where justice requires the statements of as defend-

ants to be received as satisfactory proof °° *. The

defendants cannot complain if they are gssessed.on a

‘basis furnished by themselves.°*

A few fears later, suit was broughe to-compel thé lésser

of certain business premises to. maivtain them in operation

and to reimbyrse the lessee for his expenses for such

repairs. The court, in Schmohl v. Fiddick, 34 IW. App. 190--

at 198, stated: :

“So in casest where a party himself places a con-

. struction upon a contract and “agrees” to exeente the

contract according to such construction, and thereby

niduees its exeention, he will be estopped from uafter-

ward repudiating suc ‘h construction and insisting upon |

one-more favorable to himself, (Citations. )

* When a contract, is in any respect doubtful or

“peculiar, and the parties hy their declarations or acts.

have placed a reasonable. construction upon it, such

constriction will he pears wis hy the courts, in case of

litigation upon oi “:

Lael

» -

: ee ai ;

A like result followed in.P’cople v. Adame, 65 Ill, App.

983 at 287: and the rules thus early estdblishad have

become an integral part of Illinois law. We believe that

law was binding upon the Court of Appeals and that it

had no-right to disregard such rule, under Eric Railroad ~

Company vy. Tompkins @B04 \. S. 64, 58S. Ct. 817, 82°

L. Ed. 1188. . aii? hie )

Now, going to the insurande policies directly, the air-

craft policy was a fleet or blanket coverage under which

all units owned or acquired by the insured automatically

were covered for bodily injury liability. As shown in this

particular situation, an advance premium was paid and a

_ certain charge made per day for the protection, the further.

' amounts due being determined by subsequent audit; and i

it has expressly been admitted hére that both pelicies were

in full foree and effect (App. 6). * -

e

The place where both the District Court and the Court

of Appeals became confused was in failing to distinguish (

between-Coverage D and Coverage FE. We are not elaim-

ing under Coverage’ EF. That is the coverage, however.

poorly defined, which ‘was set up to take care of the

‘soarrier”’ situations. Every small airport keeps a couple

of planes for carrier use—in this particular instanee such

bemg also for ambuiance purposes, as shown by the face —

of the poli¢y which insured not only, Dyson but ‘BK. UL

Renner Funeral liome, Ine."*- But the injured plaintiff

was not a passenger for hire of the airport, does not claim

ax such, and ix not required to come under the protesfion

of Coverage E.

, Coverage D applies to all bodily injurie= except th

‘passenger’ situations. As set forth in the policy/i

covers all personal injuries ‘snstained by any pers

persons other than passengers as defined herein,

ont of the ownership, maintenance er use of the

as deseribed in this poliey’’.. The face of the poli

grixing Os

- *

ireraft

v defines

¢

‘

waa”

e

Bo veverni .

the nature of the uses « which inelndes the tralepertation.

of executives, employees, guests, customers, instruction,

ental, personal, pleasure, family, and: business “uses”

(App. 21). Item 6 of the face of the policy’ makes a specific

distinction between those uses amd ** passenger carrying

for which a- charge ix mace "* (App. 38}:

The defendant insurance company, now attempts to con-

tend that noe coverage ix given uider Coverage B wherever

j any person is injured **w tile in or boarding the aireraft-

for the purpose of riding or Oving therein, or*while alight- .

“Sng from the aircraft aft® a ride, fight or attempted flight

‘therein’. If this is true, then may weoask what protee--

tion was giveh by Coverage D? Here ix an afreralt oper-

ator, who owns a number of aireraft.; A few planes are

ept. for carrier or ambulance purposes. The rest are -

used to teac . how to fly, for rental to those

already possc#Png licenses, or for flights ly the operator

oF his employees in connection with the ordinary airport:

business. For example, an airport employee flies one of af;

the planes into a craft owned by another, or in landing.< = -

crashes intg a barn injuring “a student im the’ ptine.

A student. soloing crashes by reason of defective landing

gear. A week-end pilot goes inté a stall because of a

9 propeller failure aml ‘is injured. One ‘testing a’ plane

to purchase it crashes 2 because of inherent failure of the

-

« craft, oe ae ere

“4

| Now, cortainiy, the insured conte mplated protection im

‘ each of these instances. None of such injured: per-one ine

a **passenger’’ in the ** passenger for hir®* sense, ¢He/i-

a pilot, or a student, ‘aeguest, or an oceupant. Ts it t# be

a said that the insured shall receive no protection for which

hr paid under Coveyxfge D, because of the ambiguity of ~~

the ** passenger” finition in theghod¥ of the policy?

the defendant contends

surance inte disx-

The ‘very attempt to contend i

here ix the thing which ha» br

16

vegute. It i Is the ‘Amos and Andy type of insurance wher? :

“The big print gives it to you and the. little print takes

it away.”’ Such cannot be toleratet by courts secking to

give justice to litigants. And Illinois has stated repeatedly

that if an insurance policy ix susceptile of more than one

construction, tliat ¢ onstruction must be taken which confers

protection and permits recovery, rather than one which

will deny recovery. 22 Illinois Law & Practice, ‘*Insur-

ance,”” $149, pp. 195-198 ( Appendix to this Petition,

ip. 36); Roth v. Kaptow sky, 393 454 at 491, 66 N. EF.

4 664. This law the federal coutts are bound to follow,

but did not do so here.) While the ordinary construction /

of language will be given to an unambiguous contract,

clearly the insurer-in this situation has ereated an am-

higuity which leaves Coverage D almost meaningless, so

far as personal injuries are concerned, if its Siena eameeee

of ‘*passenger”’ is accepted.

— hax stated in Connell wv, Winget, 374 WL 531 at

a9, Bl .K. 2d 1:

The meaning ‘of the word * passe nger’ is entirely

different from that of the word ‘guest’, e

A nd a student pilot hes been-held not a ** passenger’ * where

an aircraft policy is‘clearly intended to protect the insured

yg sep to such persons, Ohio Casualty Company

Gantt, 256 Ma. 262. ot S. 2d a at 601.

Por Years,cautomobile insurance companies had exeln-

sions in .policies—and many still do-—against coverage

“MN sere the automobile is beiig used for livery purposes, or

for the carriage of .passengers for a consideration, the

wo . . . ; . .

langiiage varying W idely overa period ofyears. The courts

have gone to great lengths to he sure that business cus-

tomers. social guests, and even persons riding upon a

share-expense’? basis would not be excluded, A few of

the many eases to this effect are Standard Accident Insure”

~%

Ai

?

/

|?

17

ance Company v. Cloutier, f2 NX JTL 449, 32 A. 2d 684. 147

ALL. R. 626; Pietrautonto v, Srerele rm Insurance Com-

pany, 232 Mich. 111, 274 N, W, 786. Beer v. hige ? uM Ohio

St..271, 16 N. KB. 20-413, 118°A..1. BR. 38s; Comme rol

Credit Corp. Monroe, 3s Fem, App. por 27'S. W. 2d

423. °

The attempt of the defendant to seek to aullify ail pre

“tection promised by Coverage D. and by the face of the -

policy designating the nature of the risks intemded to be

covered thereunder, ix reminiscent of the learned¢discn--

sion by Lewis Carroll. A was stated in Through the Lael.

ing Glass:

“-That’s aigreat deal te make one word mean,’

Alice said, in a thoughtful tone. é

‘When L make ‘a word do a lot of work like that,’

said Humpty-Dumpty, ‘1 always pay it extra.” ”

4

And the insurer in this instance certainly shonld pay the

word **passenger’’ extra, heeause it attempt~ by it< use,

under the constraction for which it contends, completely

to vitiate the insuring agreement. It collects a preminn

m the first m-tance for the protection promised to these

categories of persoiis not falling under the “carrier”

categorys-then it collects an additional premian where

the legal risk is inereashd by the carriage of passengers

for hire, What protection has it given for the basie pre:

mium, if protection is afforded to noe ‘occupant’ even

though falling in a category different from a pissenger

trensported by a carrier! | ’

Manifestly, it ix absurd to claim thit every occupant of

a vehicle, whether it bean airplane or an automobile, is

apasseyger’’. That term has céme to have certain legal

* sconnotations— namely. where the relationship i is other than

that of a guest oceupant. At least, thix is the law of Hi

noix—and, in this situation, the law of Illinois must control.

- s@

a

a

. Pie es

- [flinois has also repe: atedly stated that a broad construc,

tion must-be given to protect the activities under which

liability arises, where ‘commercial use’* or a similar type

of coverage ip promised by the contract. Scott v. Freeport

Casualty Company, 392 UL. 229 at B49, 347, 64 No BH. 2d o42 ¢

Wold v. Glens Falls Inde munity Company, 269 HL App. 407

at 416. In both of those situations it was pointed out that

“a narrow construction would not bé b gaken of the purpose

of such msurance, but a broader construction which would

afford protection to those injured through the ordinary

operations of the instrymentalities insured, J

When we come to the airport policy, there is more basis

for the result reached by the Court of Appeals. Brietly,

ifs reasoning ix that the occurrence was one ‘arising out

of the use of aircraft’ owned by the insured, and was

therefore exclyded. Hlowever, it is not clear. that such

a resul® should necessarily follow.

Briefly, here ts the problem. The purpose of such ex.

clusion primarily ix to prevent liability from attaching

Ce ‘

where the: injury is caused from the inhere nt nature of the

aireraft—such as a faulty propeller, a disabled engine, or

something of that type. Did the injuries ‘arise out of?

the use of the aircraft—oredid they ‘tarise out of ™ the

use of the premises? The trial court in the original injury

ease found as a finding of fact, and such 4s not disputed

here, that. there was negligence in the airport eperatiqns’

which *ounsed the injury to occur. Primarily, this was in

directmg the, aireraft to take off a short: runway,, with

Soa cross-wind, in a direction Where high tens ion.wiwes ran

immediately adjacent to. the airfield, The wheels snagged

the wires, flipping over thé plane, and ‘ausing the injury

to Mrs. Litteral. ice ys

The field of insurance law does not clearly indicate that

coverage ix exe cliided in such a situation. This is comipar-

: e

19

able to a filling station policy covering premises and: vehi-

cles but excluding products liability: A customer orders

kerosengpay BY mistake, a five-gallon. jar of -gasoline is de-

livered and, in the course of delivery, I> dropped and ex-

. plodes by reason of static electricity. Even though a pra

: re F ae * : 5 : 4 >

ucts liability poliey would cover the joss, and even though

the’ products exclusion would operate once the act of neg-

ligence connected with the delivery had ceased, the insured

ix nrotected’ since the negligent dropping of the container

was within the poliey protection. : |

This result is cometinies reached even where there is

no act of negligence then voing on, For example, let ous

saya heating contractor installs a furnace using bufane,

gas. The policy excludes the hazards of butane gas or

liability arising dry reason of defects in such appliance or

products. The contractor im the course of installation leaves

come of the fitfings loose, so that they are in a leaky con-

dition. Before he has completed his contract, but perhaps

while he is not onthe preniises (in the instant case, the

employee was in the aectual-act of directing the. aircraft

along the -yunway), butane gas escapes. and explodes.

Would that be covered—in view of the fact that products

liability coverage or defective appliances installed by the

contractor are not covered? Clearly if would be. Boufirell

v. Employers’ Liability Assirance Gorp.. ©. A295, 105 VK.

2g 597-at 600, 601,” WSs |

Nnother kindred sitaation arises where there is ‘beth

n general liability, or premises” policy anda vehicles

policy, such as pon automobiles or, in this ease. aircrafts:

‘Tf a portion of the liability arose out of acts covered under

Gach of such policies, the courts seek to give protection

nnderoth policy rather than to deny it under both.

An illustration of such overlapping occurs when a truck —

yoliev covers trueking operations inelnding ‘‘loading and

} Vy ef

.

.

nN

20

unloading’’, while a second insurer covers premises la-

hility excluding, however, any occurrence arising: out of

the: operation, maintenance, or Use of. vehicles. A safe is

being lewered from a window. preparatory to loading -it

inte a truck when the rope breaks; coal is negligently shov-

elled onto the sidewalk ‘and left in’ an unlighted pile

orthe coal chute is.left open; or a delivery boy carrying

a package from thé delivery truck negligently runs into a

jedestrian. Now whilr the results may vary where only

one type of policy is carried-—where there are both policies

in foree, one of them ag least almost always is held to cover:

frequently both are required to share the responsibility

pro rata; “ind in other situations one is made primarily

responsible and the ‘other is made liable for any ¢Xxcess

Jiability.

There are in exeess of two dozen cases which lay ont

these rules, with the more modern authority giving a con-

struction to the policy or policies involved so as to extend

protection under the circumstances existing. See, by way,

of illustratiin, Bituminous Casualty Corp. v. American

fidelity and Casualty Company, 22 Til. App. Dd 26, 159

XN. EL 2d 7: °Coulter v. American Employers” Tnsurance

Company, 333 UL App. 631, 78 NE. 2d 131; Woodrich

Construction’ Compony v. Indemnity Insurance Company

of North America, 252 Minn. %6, wo N. W. 2d 412 at 419

(holding all three companies concurrently liable); Lian

berman'’s Mutual Casualty Compaony Vv. ‘Employers’ Lia-

bility Assurance Corp. C. A. T, Mass., 252 F. 2d 463 (which

held only ove insurer liable, although both should -have

heen so held). And, as to acts originating upon premises, .

see Moldovan v. United States Fidelity & Guaranty Com-

— pany, 1d Mise, 2d 85, 184 N.Y. S. ‘2d 201 at 204, affirmed

185 N.Y. S. 2d 735. a

Reasoning from such-cases, and from the general prin-

ciples which apply, we think a fair question may be: ** Was

a

/ the matter excluded the true cause of the injury?" We

‘think here that it was not. The occurrence would have

taken place irrespective of who owned the aircraft if ques-

tion. If the wjury ovceurred because of the active negli

vence of the insured’ employee in directing the plane into

the air.a layman purchasing stich insnrance would’ expect

fo. be covered. And this is the test ordinarily applied by

the courts in dejermining whether coverage should be ex

tended or rest vieted.

“~

| | CONCLUSION.

4 therefore, respectfully sulmitted that a writ et

certiorari issue to review the judgment and’ orders of the

Courtof Appeals of the Seventh Cireuit, heretofore entered

in this cause.

Respectfully ~ubmitted,

4 |

C. KE. Tare. .

Robeson Building,

Champaign, Hlinois,

nel . o -. JOHN Atax APPLEMAN.

The Maples,

Urbana, Hlindis, * ;

Attorneys for Petitioners. -

on 1

Jousx ALAN APPLEMAN, | ars

Of Counsel. _ . *

ra)

Gj

~~

APPENDIX, —_— -

Ix rue U’xirep Sratres Covrr or APPreALs

fof the Seventh Cireuit.

SEPTEMBER Teno, 1961— Jancany- Session, T062

No. 13510

Jewent Gassany Lirtran. axnp |

~ Louis Dyson,

Plaintiff-Appellaut.

we a

Appeal from. the

United States Dis-

‘trict Court for the

Typemsiny PNscranxnck Company or

Nowra AMERICA, a Corporation,

es Defe ndant-A ppelle ,

I linois. ,

February 28, 1962 —

Jefore SCHNACKENBERG. Kwocu and Casrin. Corews

Judges. : Ae

-Castie, Circuit Judge. This appeal involves a garnish-

ment initiated by Jewell Gabbard Littrall, plaintitf-appel-

lant? who had recovered a judgment in the amount of

$25,400.00, as Jewell Gabbard against Louis Dyson, doing

business Hlini Airport. The defendant-appellee, Tir

nity Tsuryice’ Company of North America, had in force

Liability Poliey.” the other an * Nireraft Liability Poliey.”*

. 1 Referred to herein as garnishor. .

astern District of ~

two policies of insurance issued to Dyson, one an tt Nirport

”

The insurance company deniyd any indebtedness to Dyson,

or the possession of any Ussets or claims due him. The

District Court, after a hearing on the merits, filed a metae-

fandum, opinion containing its findings of fact and con-

clusions of law,-and entered judgment discharging the

garnishee and dismissing the garnishment. proceedings.

The garnishor appealed.

The tindings of fact in the origina! action aginst Dyson

was introduced in evidence without objectien. The third

paragraph of the finifigs of fact states: . <s

that on the Sth day of September, 1959, the defendant,

Louis Dyson, doing business @s ini Airport, was the

owner of and possessed at certain airplane known as

i Globe Swift: Model CC-LB ‘Airplane. Identification

Number SO0621, Which said plane was located at a cer:

tain airport known as thin Airport.° ° *”

“The additional findings of fact disclose that Loai~ Dyson

was the owner and operator of this airport; that he entered

into negotiations to sell the Globe Swift ‘aireraft to one

Robert Schindler wht eas assured by Dyson that the air

; 2 GF

craft was in good mechanical ‘condition; that there Was

located near the [Hiai Airport certain wires and hazards

- which Dyson knew or should have known that the aireraft

with, its type of propeller would have diffeulty in flying

over and clearmye the wires; that he directed Sehindler te

take off, he did end a crash occurred.

The. findings of fact further disclose: . :

“that said defendant. |Dysun!, either by himself oF

by his agents and servants negligently and carelessly

did one or more of the follawing acts or omitted to

do.said acts, namely : ;

tae Negligentty: ayd careles=ly directed! the plot

of said airplane to take said airplane off the vround

atid into’ the air when a cross wud was blowing along

the flight, strip. : ‘

OP me

sve

a

. . , ° . a 7 Z

*

ee. Neglently and carglessly directed the pulot

an “ot maid airplane Je pilot said airplane tte the “air

; ie hia foo close tor the eonmtstele edge of the teht

strip. and so as fo erciteechizar ae

ee Negligently and carelessly furnished an air

plane with a defective propetier or a serapetley whiekt

Was of a destgn taot- surtedd et preper few “aysteat bet teen

in said airplane. ae

ve, Neuligenstis aid carelessis opetiaiee sate

port and operates suid airport in siglation of thie

provisions of the Statute- of Wines sand the @ sat

Ne gomautios Rewulation=. ane Ferien} feo snake aoe ts

apection of maid ing bee ate cee tired, and chjed taeer i

‘yently aid carelessly epecate: sate airport with os,

hazard ass alleged here. heverzutered: thvewerdey °°

The fmding~ farther disclose that a~ a preximate restr

of the defendant's negligent act- the airplane erated

and Mrs. Littrall who wa- in the plane <tistained injuries.

“Vie Jot the Nireratt Lisbelity Polies recite

The insurance afforded is only with gespeet te ~nelj

and se many of the followine coverages as are inedt

cated by Specitie preminn charge or charges. The Dis

of the company > Licetoslity cogaatnes* eneby such coverage:

shall be as stated herein, subjeet to all of the terms ef

this prohies hicev tne reference thereto.”

Wonder **Ttem = hal of the prrliet, thy esgriptaen ast thy. mee

eraft is: :

PAIN Licensed: Mireraft Owned. Cdprenie ced. Leased

, OE, Borrowed by the Named Prusured

Attached to this poliey of inssiranee are Endorsements"

whieh included the fell wing pertinent elatees:

*Kndor-ement = 1. ,

1 Antomiatic Attachment and Termination of Cover

age: The coveranes ais tindieated it the schedule

of Coverages of this poliey shall apply te all air

eraft having an ‘NO certificate cissned by the

26

United States Civil: Aeronautics Adiministiation

owned by the insured at the inception date of this

poliey and shall automatically apply to any simi.

larly certificated aireratt acquired by. thie insured

as owner during the poliey period. This insurance

shall terminate with respect toe any aiveratt dis-

posed ‘of on, thes date of sale of such aireratt er

ee the surrender of the legal possession thereof Try

the insured: er upon expiration of this polies. —

whichever may first occur.

’ . sd

3. Deposit Prentinm and Rates:

The rates for this poliey are:

Coverages> Rates :

Dak $.14 per day, each aires ant

, > 2s owned * d operated

Coverage Eo aot provided except at respect the

planes deseribed, ine -Endorsement) =

Endorsement = 2.

In consideration of premium tobe: determinedt ts

andit it i ayreed that with respeet to th: following

Caireraft only: .

rere, Coverage KB. Passenger - todily Tnjury Liatnlity

ix amended to read:

$20,000.00 each person

£650,000,00 each occurrence

2 The rate forc the above: extension. spall be $40)

perday owned or operated and shall Foes capopotieraa

ble only to:

Navion

Pipas Tri-Pacer

Piper Tri-Pacer

Piper PA 22

“«

Endorsements 3, 4,5. 6, and Tadd and delete other planes

but the Globe Swift aircraft invelyed in the accident wa-

not listed or mentioned on any endorsement.

27 |

Coverage: D. EB and. F are listed under the *Piswing

Agreements" in the provisions of the polices aimed read in

‘past as follows: “ee wy rate

’ “Coverage [Bodily frijurs Laability excluding Pas-

cenger= To pay on behalf of the insared all sunis whieli

the insured shall bee@me legally obligated to pay cats

damages, inchiding damages for care’ and lossot \

ices, because of “bodily injury, siektiess. iscus@© Or

mental anguish, incline death at any time resniting

therefrom. sustained by any persen or persons other

than passengers A> defined Herein, arising out oof the

ownership, maintenance or use of the aiveraft a~ de-

seribed tu this policy.” : :

“Coverage E Passenger Bodily Injury Liability Vo

pay on behalfot theansured all sms whieh the insured

Chall become legally obligated fo, pay as damages, in

ding danciges for care and lo-~ of services, because

of Jodily injury, sickness. disease or mental anguish,

including death at any time resulting therefrom, sus-

tained by any passenger or passengers as defined

herein, artsing ont of the ownership, meainteruines or

yee of the aiteraft as described in this poliew.” "

“Coverage -F--Property Damage Liability * 39°"

The * Nirport Liability Policy? in its pertinent provi

sions reads: 4 a

“Pisnrang Agreement."

4

“Coverage A Bodily Injury Liability To pay.on be

half of the insured, provided preminm is charged nniedet

Coverage A in the declarations,.all sums which the,

instred shall become legally obligated to pay at

damages, including damages for care And loss of sens

ices, because of bodily injury. stekness, dixeise OF

mental anguish inelading death at any time resulting

therefrom, sustained by any persen- or persons ctid

arising out of: the ownership. maintenance or Use of

the airport premises described in the declaration= ane

-all operations which are necessary, OF incidental to the

ownership, maintenance er tee of said premises a>

an airport.” : °c ; “

oR as ae

> ‘* Exclusions”

“This policy does not apply :

e-* * ‘= > ‘ 2

“(f) to bodily Mhjury or death or injury to er destrue-

tion of property caused by or arising out of (1) the

existence, maintenauce or tse of any aireraft owned

diy, hired by or for, or loaned to the insured er any

“aireraft in flight by or for, the account of the in-nred |

cs ;

“eo or

"s *

The Insurer claims je ix not Jiable te pay the judgment

because the Globe Swift wiveraft Wwa~ not listed under

" Endorsement =” of the aircraft policy and under thé air-

port poliey the Globe Swift aircraft: was excluded’ by the

ll

exelusion clause which specifically excepted “hodily injury -

ne by caused by or_arising out of the °.© * use of aay air

~ eraft owned by ~ "* the insured * **."’

The purpose of construing a contract of insurance in to

determine the intention of the parties, The’ contract of

insurance must be construed as a whole. “The -coutract

consists of the policy and all endorsements attaches thereto.

Morris & Cov. Rhode Tsland Ins. Co. of Provide woe, TOTS,

181 TI. App. 300. f

“Contracts of Tnsurance, like, other contract=¢ must

be construed according to the terns which the parties.

have used. to be taken and understood, in the absenee

of spubiguity, jn theig plain, ordinary and properly

sanve.’ Yadro vol nited Stites Fidelity & Guaronty

CH. 1955, 4 WL. App. 2d 477, 478.

If there ix an ambiguity in the contract of insurance it wast

he construed in favor of the Ins red. Midwest Dairy Prod-

nets v. Ohio lus. Co., 1037, 356 11. 380. Since the Iisnrer

ix invoking the exelusion clanse the burden is upon the

Insurer to-show that the loss claimed ix within the’ exelu

sion. Wilson v. National Automobile .and Cas, Ins, Of.

e

‘

~ ;

1059, 22 TL Ap. 2d 34: Caster s Motor Ins. Corp. TOOL,

28 TL App. 2d OR. .

a 4 : . <

/

The aircraft poles based Tpom the proet, does net, re-

quire the tusurer-to Pas this judgment. The poliey ex

. P *. *

pressly provides: ** Covexgze E iwhich covey ~ passenger

‘ Ge . - 4

bodily injury! not providgd Wyeept ax respea® the planes

_ tleseribed in Endorsement (2. Endorsement a2 does

hot describe theytilobe Swift aireraitn« ich was invelyed in

the aceident. This endorsement reaguies a payne) of

£40 per day for cach plang co fisted. Ttem 4 Dt the poles

plainly stated “coverages is are imdicated by Sypeentic

premium Charge or charges.” There % no proof of pay:

* ment of this chafee. There ix ne ambiguity en the soanier

in which this coverage is stated. From the language of the

contract the parties did pot intend to provide coverage

for the Globe Swift aircraft, and the Court cannet make oa

‘new contract. Cf Capps v. National Uyson Fire lus. Co.

19255 218 TL oop: W. S. Indemnity (40, ¥: ludastrial

Comm... 1937, 266 TIL 240. “s .

_— Garnisier contends shat the aireraft policy “isa feet

. . 5 @ , dl ‘ ‘

policy as evidenced by the clause entitled t* Nutematie

, >

Attachment and Termination of ¢ ‘owwrage.** °

Garni-hor further contends that the Globe Swift aircraft

ix covered by the automatic coverage clang which reads:

Phe coverages as indicated in the schedule of Cover-

ages @f thix policy shall apply to MPaircraft having

an ‘NC’ certificate * °°"

The policy must be read in its entirety. Nowrad v. Mart-

ford Accident & Indemnity Co., Job, IL Li}. App. Al AN.

The endorsements must be given effect. 29 1.1. P. § 147, p.

11. Hoffman v. Central Surety A Iusx.’Corp.. Yor, 297

Ii, App. 371. The ** Coverage E*.@ability for passenger

bodily injury. ix limited in Endorsement =2 to those air-

erdft listed. Other coverage ax provided in *D"" and “i Pd

y

5 ~ (30. ;

‘ wy

- °

. Py

would be .effeective ‘under the automatic coverage clause.

Furthermore, Garnishor's interpfetation would also in-

crease the risk without payment of the additional premium

provided, $40 per day. ue

Counsel for Garuishor also contends that because. **Cov-

erage E*’ refers to passenger bodily injury liability, and

since the Garnishor was in fact a guest in the plane she

-would not come within the exclusion. This argument is

completely answered By. the definition of passenger in

. the policy: ‘*The word *passenger’ wherever used in this

policy shall mean atiy Person or persons while in 7. * a

aircraft for the purpose of * * * flight or attempted flight

therein.”’" FA lg SRS. ars

Garnishor further urges that the Insurer waived the

exelusion of those planes not listed because on September

10, 1955, after the accident, the Insurer, through its au-

thorized agent, signed an accident report and filed it with

the Seeretary of State pursuant to. the provision of the

Illinois Revised Statutes, 1959, Ch. 154, ¢ 22.42. In this

», report it was stated that Dyson had a policy covering

liability insurance for the: injuries sustained by the crash

of tlie (Hobe Swift aireraft. The insurance poliey number,

listed in this report was the number of the aireraft poliey..

We conchide that since there was no coverage of the

Globe Swift aircraft in the policy, this report te the See-

retary of State in itself was insufficient to change the

terms of the poliey and provide additional coverage.

“The next question is whether the Airport Liability Poliey

requires the Insurer to. pay the Garnishor’s judgment.

Here again the policy without ambiguity specifically states:

“This policy does not apply: ° * * to bodily injury

*.* © caused by or arising out of * * * use of any air-

craft owned by * * ° the insured or any aircraft in

flight by or for the account of the insured.”

.

-

—~—-

The Globe Swift aireraft in which the Garni-hor was rid-

ing was owned by the Insured according to the findings:

- of fact. Fhe exe ‘dusion clause in the policy expressly éx-

eluded the injuries reevived by the Gar nishor while rjding

in this aireraft. ,

Garnishor contends that since the accident yas caused

‘by Insured negligently directing Se thindler to take off,

the use of the plane was not the cause of the accident

and the exclusion clause was evaded. This might be true

without ‘the words arising ont of the use of any aireraft

owned by the Insuryad. It must be adnritted that ‘arising

out of’ is a very broad phrase. Cf. Scimidt v. l Vilitivng’

*Inx. Co., 194 ALR TOSS, 182. S.W. 2d Isl. Althoush aid

negligence of the Insured proximately « caused ‘the aAfash

and the injuries Of the Garnishor it cannot be denied that

the ace ‘ident. and injuries arose out of the “ue of the

aircraft, Such construction as urged by the Garnishor

ix finreasonable and cannot be ace epted under the wording

of this policy. Ch underwriters at Lloyd's of London .-

Cordora. Airlines, O © ir. 1960), we 2d G508 Bruce sv.

Lumbe rmon’s Casualty Co., 4 Cir. 1955, 222 F. 2d 642.

*

In addition to what basis been already me aitioned the

_polici iex read that the Insurer

la] green with the insured, named in the declara

tions made a part hereof, in Consideration of the

payment of. the premium and in relianee upon t the <tate-

ments in the declarations and subject to the ‘limits of

liability,. crelusions, conditions and other terms of

‘ec’ this policy.” ( Empha- ix supplied.)

The aireraft policy had these additional words **to afford

those of the following coverages as spec ‘ified! in the de-

elarations.- ’ By this clause the two policies explicitly state

- ‘the intention of the. parties to agree that the Jnsurance

afforded was ** subject to* * * exelusions."" Phe judgment

. 225

was based upon injuries received under cireumstancés not

included within the coverage of the policies, There is‘ no .

ambiguity which authorizes this court to inerease the cov:

erage. Cf. Employer’s Liability Assur. Corp. v. Matyland

Cas. Co., 7 Cir, 1956, 230 F. 2d 370. an eee

_ We have adopted almost in its entirety the excellent

opinion written by District Judge Casper Platt-and affirm .

the order of the District Court discharging the Garnishee

and dismissing the garnishment proceedings.

* JUDGMENT AFFIRMED.

33 a |

‘

Usirep States Court or Arrras

For the Seventh Cireuit.

Chicago 10, Illinois. .

Wednesday, February 25,- 19062.

Before |

lion. Elmer J. Schnackenberg, Circuit Judge,

Ton. Win G. Knoch, Circuit Judge,

Hon. Latham: Castle, Crrewt Judqe.

JeweLL Gasnarp Lirrrane and

Levis Dysox, é

Nie Plaintiffs- Appellants, Appea from the

No. 13510 - { | nited States Dis

: rs. - triet Conrt for the

: a District of Kastern

INpemnity. PNsCRANCE CoMPANY OF linois. -

Norru America, a corporation, | .

Defendant-A ppellee, )

This cause came on fo be heard on the transeript of the

record from the United States District Court for the

“Eastern District of Hlinois, and wax atgued by counsel,

On consideration whereof, it is ordered and adjudged

‘by this court that the order of the said District Court dis-

charging the Garnishee and dismissing the earnishment

proceedings in this cause appealed from be, and: the same

is hereby, Areimmep with costs, in accordance with. the

opinion of this Court filed this «ay.

Usrrep STaTES Court of APPEALS |

For the Seventh Circuit,

Chicago 10, [Hinots.

Friday, Mareh 30, 1962.

Before

Hon. Elmér J. Schnackenberg, ¢ irceult Judge.

Hon. Win G. Knoch, Circuit Judge,

Hon. Latham Castle, Circuit Judge.

Pa

JEWELL GABBARD LLITTRALL, )

i ' ETC., ET AL.

: Plaintiffs-Appellants, Appeal from the

Xo. 13510 . United States Dis.

< se trief Court for. the

Kastern District of

IxpemNity INsunaxck COMPANY OF Hlinois.

— Nort AMERICA,

& . Garnishee- Appellee.

Ir is onperED by the Couyt that the petition for a rehear-

ing of this cause he, and it ix hereby, Denten.

-

-

35

: Statutes Involved.

Hlinois’ Revised Statutes, (Ch. 15), §.22.42a:

~The owner of every aireraft which ts in any inan-

ner involved in an accident within this State, in which.

any person is killed or injured or in which damage to

the preperty of any one person, other than to his own

property, in excess of #100 ix sustained, shall within

10 days after such accident, report the matter in writ-

ing to the Department. Such report, the-form of which

‘shall be preseribed. by the Department, shall contain —

information to enable the Department to determine’

whether the requirements’ for the deposit of security

under Section 42-b are ilapplicable by reason of the

existence of ifsurance or other exceptions ~pecified in

Sections 42-b and 42-c. The owner shall furnish such

additional relevant information as the Department

‘shall require.””

¢

Hlinois Revised Statutes, Ch. 155, § 2) 42: |

da) Tf 20. days after the receipt of an accident

report as specified in Section 42-a the Department does

not have on file evidence satisfactory to it that the

person who would otherwise be required to file security

under subsection ‘(b) of this section has been released

from liability, or has Inaen finally adjudicated not to

‘be liable or has executed a duly acknowledged written

agreement providing for payinent of an ayreed. amount

in installments with respect to all claims for injuries

or damages resulting from the accident, the Depart-

ment shall determine the amount of -security. which

shall be sufficient in its judgment to satisfy any judg-

anent or judgments for damages resulting from such

aecident as nay be recovered against cach owner.

“ob) The Department shall, within 60 days after

the receipt of such accident report, suspend the cer

tifieates of registration of each owner of an aireratt

in any manner involved in such aceident, and if such

owner isa nonresident the privilege of the ise within

the state of any aireraft owned: by him, unless such

.

“

36

owner shall deposit security in the sum so determined

by the Department; provided notice of such suspension

shall be sent by the Department to suth owner not

less than 10 days prior to the éffective date of such

suspension and shall state the amount required as

‘security. Where erroneous information’ is given the

Department with respect to the matter set forth in

subsection (¢) of this section, it shall take appropriate

action as hereinbefore provided, within 60 days after

receipt by it of correct information with respect to

said matters.’’ pees =

4 5 “oy ae

IHinoix Supreme Court Rule 13(3):

“Tn pleading the performance of a condition prece-

dent in a contract, it is sufficient to allege generally

that the party performed all) the conditions on his

part; if the allegation be denied, the facets must be

alleged ineconnection. with the denial showing wherein

there war’a failure to perform.”

»» [linoixs Law and Practice, ** lnsurance’’, § 149, pp- 195-8:

“The fundamental law of construction of insurance

contracts is that all uncertainty shall be resolved in

favor of the insured.

“The general rule, subject to qualifications discussed

infra $150, is that an insurance poliey should be con-

strned liberally and most strongly jin favor of ‘the in-

sured, to the end that he will not ‘be deprived of -the

benefit of insurance. The rule of construction to be

adopted should be a liberal one favoring the insured,

so as not to defeat, without a plain, hecessity therefor,

his claim to indemnity, and if an insurance policy can

be given any reasonable construction preventing -de-

feat of insured's indemnification for loss eovered by

its general danguage such construction: will be ‘adopted.

Tn other words, where ambiguity exists in an in-

surance contract, the courts will adopt a liberal con-

struction of the language used in favor of the insured,

and the policy will be construed strictly and strongly

against the insurer. “The rewson underlying this rule

“=

wee

is not the loss of the ieured oF the disparity between

the resources‘of insured and insurer, but the fact that

the words used were chosen by the tmearer and that

the ambiguity is chargeable to it. .

“Since the contract of insurance ts written hy the

nsurer, and its proyisions are inserted tor ifs benefit,

the rule thaf words-of an instrument shall be taken

more strongly against the party employing thems ts

applied against insurers.” |

.