Petition for Writ of Certiorari — Thompson v. Fidelity & Casualty Co.

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Supreme C Court of the -

‘Hnited States ce

OcToBER Trem, 195s.

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282

MARGARETHA THOMPSON,

Petitioner,

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a

: *

FIDELITY AND. CASUALTY COMPANY OF

; NEW YORK, a Corporation,

: . Respondent.

Petition For Writ Of Certiorari

To The. Appellate Court Of The Second District,

® State Of Illinois. ; oie

e

‘7

» ~Bernarp P, Reese, JR.,

de, 501 News Tower Building,

: OTin Rockford, Ilinois, .

“ Attorney. for Petitioner.

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Midwest Law Printing Co., - 326 N’ Michigan Ave., Chicago.

Telephone: Financial 6-398s

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“INDEX.

cs PAGE

Opinions Plow peak hes i ae oe

Jurisdiction rar reo SESE ERS Gk ORR en MOLI R ORR LIS Petters -

x

Statutory P rovisions and Rule ‘s Conferring Juriadie-

tion on I | ae

ited for Review

‘Questions Presented for Review 2000 0. 4

Federal Statutes Regulations and Rules Involved pees 4 :

Statement oO eee ee ange isda Na uewetanen sobatcnrussoccselas 12 .

How Federal Question Raised ie ae unio

“Argument... ee bss Scpea oes ignition vee see 16

ee ee aa heh een Toler eens 24

Appeydix A— i x :

~ Opinion. of Appellate | SER Oe. td EI wla

Appendix Bi

Judgment of Appellate a ee ee la

Appendix (4— s es

Order denying Petition for Leave to Appeal ~......... Ifa é

. ; “4 &,

CITATIONS

Air Transport Association v. Civil Acronauties Board,

St ad cae: Sse RREE Pera yre reek Sonrectinr ane ner sv anINPeC 20

American Airlines, Ine. v. Standard Airlines, Ine. 80 _ 8

Fy PN Ba Ee OOD a sess ccc. ae ;

Jones NX lonal: Bru w\V. Yates, 240 U. ne oth. me), 0

L. de 78, TOT CIMID) ....... ORES IPRS, er ooh neo Soins Se

Lachs ve F id lity & Casujity Cosol New Sr. 506 N.Y.

"O07, TIS NU Ded. 3 4 054) Engrs, Re 21, 22

b Minneapolis St. Paul and S. Ste. Mo Ro Co. ve Rork,

279 US. 410, 73 LL. Ed. 766 (1929) 22. Sees oe ae 24

gil

Mosby v. Mutual Life Insuraner Co. af ey York, 405

Tl. 599, GOT, 82-NLAd 10% (1950), |

‘Northern Pacific : Raikeay Coov. Wall’ 24 es 4. M1,

60 L. kid. 905, 207 (1915). a

Pacitie Northern Airlines v. ‘Alaxka Kistinen, 80,

Supp. 592 (1948) _ os ae _ Si

‘

Paskusz v, Philade tphiia (aru: ualty Ci ‘a, 213 . <. y. 22, 110; /

N.E. 749 (1949) at XY

Personal Industrial Resin rs Vv. rn itizens Bidet ¢ Co. 80

BS 2d 827; 328 (19: sy) nageet

Satterlee y . Matthewson, : I. Id. 458, 468° -- Peters

B80, ATO (E829) PE aE Se

bray v. Fidelity and ©: n<unlt ('o., 16 I. App. 2

sitet cota Pe oe AOR ae I ee LP :

Mnited States . nion Pac ifie Railway Co. M1 TLS.

72, 23 LL. Ed, 224 (487A) POI OO Rare

_ Zim vy. Fuitable Life Insurance Company of r Lowa, fj

Wash. 2d 379, 107 gf zd 921.924 (ISHO)

STATUTES, Runes’ AND REG ULAHONS

Civil Aeronautics Board, Economie Regulations:

Part 291.1 (a), (b), (e); (da) (4) & (: 7, eae, 8

Part 291.2 2 he OR peti ehndaincnastenadanigsBtle sedis gr F_,

if SC. Title 49, Sahe ec r W : Snetion 481 = (ad. 1)

au sasenertnphestinncahuinepiatoaiapabbibascninhenekate4c-Seennaahelaseeh bc. c'he

~ ae:

%. P IN THe ee : ,

Supreme Court of the United. States

fm | sia

OcroBerR TERM, 1958. ‘,

No. 4 Aa,

} 7 7

| _ MARGARETHA THOMP¢ON,

ok a | Petitioner,

Vs,

FIDELITY AND CASUALTY COMPANY OF

' NEW YORK, a Corporation, :

et Respondent.

4 Petition For Writ Of Certiorari -.

To The Appellate Court Of The Second District, es

ies ' State Of Illinois.

oe. ae

OPINIONS BELOW.

(1) The opinion of the

Appellate Court of the Second

District,

State of Illinois, is. reported at 16 IIL.

a t

. . > .

App. 2d

. 2

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. <—-_

159. The Petitionc r hase filed nite cilhios: we record its

rinted: for the: use (of the, Court; rhelow, as provided+hy

Paragraph 4 of Supreme Court: Hrile’ 21, Wherein the ssaid

opinion is contained and the opinion ‘is ther: fore not ap

pended hereto. ° , a » ‘

al oe

.

"@.

(2) Petitifne herein. was denied leave! to appen il te

r urt, of Hlincis, heing its No. 34839 and no.

h Ais Fendered hy said Court in its de nial

of said’ IPetitien for eax: to Appeal.” cas

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JURISDICTION.

_————

* The Appellate Court. 6f Ilinois” applied

Statute. in defining the liability of th

ity contract. of insurance, and petitio

a Federal

e respondent under

ner was entitled te

its Proper interpretation and corrget application,

(i). The judgment of the Appellate « ‘ourt of the Second

District, State of Hlinois, became final. on Mareéh 6, L958,

by the denial of a petition for rehearing filed by petitioner

herein, or . ,

(ii) _ Phe Judgment of) the Supreme Court of a)

became final on Mav 20, 1958 by its denial of a Petititn (

for Leave to Appeal filed by Petitioner hévein,

(iii) Statutory Provisions and Rules Conferring Juris.

| @ietion on This Court, |

US. rene 2s, Sketion 1257:

or y

“Final judgments or doerees rendered. by the highest

court of a. state in which a decision could be had may

S. be reviewed by the Supreme Coyrt as follows: * * *

(3) * * * where any title, right, privilege. or immunity

ix specially set up or claimed under the Constitution,

- treaties or statutes of, or commission held or authority

‘exercised under, the United States.” S$

Rere 19, Sereréme Covrr or rie UNITED States: fa

of right, but of sound judicial discretion, and will he

granted only where .there are special and important

reasons therefore, The foltowing, while neither con-

“dA review on writ of certiorari is hot-a matter

-trolling nor fullve meastirinig the court's ‘discretion,

: = es Dy . means

indicate the charatter Of reasdr

sidered :

Is wiikh Will be con

ig ares q : ae

e ‘ ‘“

\ a ere

“ta) Where a sthte court has decided a federal ques

tion of substance not theretofore determined «by this

vourt, or hax-deeided dt in a wirt probably not in ae.

Nord with-applicable decisions of this court.” tie

i =%

ee Mess

: (c)’ | ie

QUESTIONS. PRESENTED FOR REVIEW.

lL May the respondent Insurance Company use a Fed.

eral regulatory statute as the entire basis for an airline

trip insurance policy without becoming subject to the |

Federal Court’s interpretation -of that statute?!’ . ine

2. May the respondent insurance company knowingly

use technical language of a Federal regulatory statute so.

as to intentionally mislead. an innocent purchaser?

3B. May an insurance company use a technical Federal

statute which it knows is-the subject of much litigation and

controversy so as to henefit from that controversy without

having that Federal statute hecome.a part of ‘the contract

of insurance, thus creating an ambiguity which -must- be

construed in favor of the insured?

4. May a State Court completely ignore the case [dw

and interpretation surrounding and given to a Federal

statute by the Federal Courts and administrative agencies,

when -that Federal statute. is the very basis of the con-

‘traet of insurance in question, and without said -statite

said policy of Pasuranece could not exist? Pun b ees oye

. 9

| | (d)_

._ The Statute, Economic Relations of the Civil Aero.

nautics Board and Board Regulations Serial Numbers. ©

ee

-

TirLe 49¢USC. Section 425(a): |

“The Authority (Board) is ‘empowered to perform

such acts, te conduct such investigations, to issue and: |.

‘amend such orders, and to make and amend sich

-

° _ oo) .

_ general ‘or special jrules, regulations, and procedure,

pursuant tq and consistent with the provisions of tliis

~/ a , Z c« ” .

«> Act.’ .

TIrTLe HUSC Sepenapren IV., Sreriox 481 (2)(d-by tr);

(a) “No air carrier shall engage in any, air trans. -

portation unless there fs in force a- certificate issued

by the Authority (Board) authorizing such air car -

rier to engage in such transportation: Provided, That

if an air varrier is engaged. in’ such transportation

on the daté of the. enactment of this Act (June ar

- 1938), such air carrier Auay continue so to engave

between the same terminal >and intermediate points.

for one hundred and twenty days after said date, and

thereafter until sueli time as the Authority (Board)

shall pass apon an. application for a certificate for.

such transportation if within said on? hundred and

twenty days such air carrier files such ‘pplication as

*. provided. herein.” (d21) “The Author ty (Board)

shall issue a certificate authorizing the whole or any

part of the transportation covered by the application,

if it finds that -the applicant is fit, willing. and ahle

to perform such transportation. roperly, and to con.

form to the provisions of this St (0) 401-403, 421,

422, 424-427, 451-460, 48) 459, AS64965, SUL S24:

991-560, 581, SRL, 601.603, 621-623, O41-049, GTL GST,

701-705, 711-722 of. this title) and the rules, regula

tions, and requirements of the Authority (Board)

hereunder, and that such transportation. is required by

the publie corivermenée and necessity; otherwise such

~ application shall de denied.” +

(tf) *Kaeh certificate issued under’ this section shall

specify the terminal points and intermediate points,

° if any, between which the air carrier js authorized to

engage in air transportation and the service to) he

rendered; and there shall be attached to the eNxerfise

” of, the privileges granted by the certifieate, or anid jl

went therete, Such reasonable terins, eoniditions, aut

limitations as the public interest may recuire, No cer y

tificate issued under this section to engage in: foreier/

air transportation shall, insofar aus the operation j-

* '

“

i * niet Aarts ze mee.

| BS to take place. withput tlie: United States,” designate

. the tertpinal. and intermediate points only. inséfar

as the: Authority (Board) shail deem ‘practicafile, and

, otherwise shall designate oniy the general route or

. a routes’ to be followed. Any air-carrier holding a cer-

tificate for foreign air transportation: shall be

authorized to-handlesand transport mail of countries °

_ other than the United Statesg No term, eondithngor” .

limitation of a ‘certificate shail ‘restrict the righit®ar

an air carrier to add to or ‘change sehedules, July”

ment, accommodations, and facilities for perforpdie the

authorized, transportation and service as demands of

the. public shall require. No air carrier shallhe deeined

to have violated Pny term, condition, or limitation of

‘its certificate. by Iding, or. taking. off during an

emergéney at a point not named in its certificate or

by operating in- an emergency, under regulations

which may be prescribed: by the AuthorifFR§ Board),

between. terminal and intermediate points }ther than’

loxe-specified in its certifieate. Any air carrier may’

make charter trips, or perform—any_ other special

“service, without’ regard te the points named init

certificate, under regulations preseribed by the Au,‘

thority (Board).’? se

. . : c F : ee te

Titty 49, USC. Suspcnapter- IV, Sectiox 496, (a)thys -

vfa) “The Authority (Board) may from time to lime

establish such just and reasenable classifications or

groups of airg@pkjers for the purposes of: this title

(** 481-485, Hoof ghis title) as the nature of |

the services performed by such air ‘carriers. shal! re”

{- quire; and such just and reasonable rules, and recu-

lations, pursnant to and consistent with the provi

sions of this title, to he observed by each. sneh “¢lass

or group, as the/ Authority (Board) finds mecessaty

in the publie interest.” ear Roe

J tb) Oe The Authority (Bord), from time to

time and te the extent necessary, aay (except. as

provided in ‘paragraph (2) of this sabseetion) exenipt

“Front the ‘requirementsapf this etitle TS 481-485, 450.

$96 of this tithe) ora Provision thereof, or auy rul,

Cet eevee zs |

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regulation, term, condition, or limitation prescribed)

thereunder, any air carrier or class of air carriers, |

if it finds that- the enforcement’ of this title or such — .

provision, or such rule, regulation, term, condition,

or limitation is or would be an ufidue burden on such’. |

air carrier or class of air carriers by reason of the

>. limited extént of, or unusual circumstances affecting, -,

the operations of: such air carrier or Class of vair

carriers and ix not in-the publie interest.”

Civin AERONAUTICS Boarp, Kcoxnomic *REGULATIONS Parr

“1.1 (a), (hb). WR) 1) & (2) : en

“6 2911 Definitigh—(a) ° Irregular air carrier, The 8

term Jirregular Air carrier means amy air carrier.

which (1 @dires Iv engages in air fransportation, (2)

doesnot hold jv certificate publie convenience and

necessity undfr section ‘400% of the Civil Aeronautics

Act of 1958, Jas amended, antl (33) does not operate 4

or hold out fo the publie exists or by eourse of

conduct that/it dperates, one or more aircraft between

designatedyMoints, or within a designated point, regu:

larly, 6 with a reasonable degree of regularity, upon

whit L aircraftit-accep s for transportation, for com-

pensation or. hire,- such) members ofthe public as

apply therefor such property as the publie offers.

~ No air earrier shall be deemed +o he an irrecular-aire——

carrier unless the ar transportation services. offered

and performed by it are of’ such infrequenéy as to »

preclude. an implication of a uniform pattern or norma!

consistency of operation hetween, or Within, sucti

designated points. acter :

(b) . Point: The term “point” as used in this part

shalf mean any airport. or place where aireraft niay.-

he landed or taken off, including the area within a 25-

mile.radius of such‘airport or place. - ,

(¢) Agreement. The: term “agreement”, as used in

this part, shall mean any oral or written agreenient,®

contract stnderstogdine, or arrangement, and any

amendment, revision, inodifieation, renewal, extension,

~ caneelRition oF termination thereof,

iat i

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Part DO, (a): $e | 4

ADOPTED BY RerGuLarion Seria No, ER-136,- 1

RR.

7769, . | hal ae

example, although its serv ives are operated irregularly,

ee fp ue ae eee

Pea

a = agent. The term ticket’ figent” as used

this SO, shall mean any person, whether suc

ees is another air carrier?or is acting as a ticket

agent, travel agent, travel bureau, broker, forwanter,

“Or ‘otherWise (other than a bona tide regular ene

ploye of the direct air carrier concerned), who for

compensation or profit:

(1) Solicits, obtains, receives; or furtiiches dtigectly

or indirectly passengers or groups: of passengers for

transportation Hpon aircraft of an irregular Ur eur,

rier, or ;

“(2)) Procures or arranges for air trafspertation of

passengers or groups ‘of: passengers upon aireratt of

Such an air carrier by chagter, lease, or “ny other

arrangement,”

e

**$ 2OL2 Classification (a) there is liereby established

a classification of noncertifieated air carriers to be

designated as ‘‘ingegular air carriers”

is

ae . i :

THE FOLLOWING INTERPRETATION OF Parr 2OL. was

‘Examples eof irregular air transportation within the

meaning of Part 291. For the guidance of irregular

air carriers and other interested parties the Board

liere, sets forth atnumber of illustrative examples of

Ir ‘and regular service. All irregwar air car-

riers should study -these_examples, for the Beard ex-

pects to use them as standards to-apply_to the opera-

tions of such carriers, i

It should be noted that all of the illustrations included

here refer only to detual operations. Such operation

indicate a course of conduct constituting the holding

out of regular or irregular service, as the case may be.

* The holding out of regular service may also be browight |.

about by means other thaf actual operations Fei

Ae

a carrier ay be holding out regular service by reas: a

of the nature and extenttof its advertising and tralie

i

ae

&

on,

solicitation efforts, In other words, an irregular air *

carrier is not immune from enforcement action if its

. Actual operations are irregular but all the circum:

stances surrounding its business show that the car.

rier is holding out regular service,

The illustrations included | represent application of

“the principles announced in Pace Arrways, Ixe.. Tx

~ VESTIGATION, 6 Cap 1061; TRANS- MARINE AlkWays, Ixe.,

INVESTIGATION. OF Activittes, 6 Cap. 1071: and [y-

VESTIGATION OF NONSCHEDULED Services, 6 Cap 1049,

find more particularly of the cease. and = desist

order entered. in ‘the Marrer OF THE NoONeERTIFIED

OPERATIONS oF Trans Carispeas Arp Canco Lines;

Ixc., Order Serial No. 370, adopted Marchgl4, 1947.

(9) An irregular air cartier operates hetween points

A and B, in one direction, on the days of the month

Which appear in brackets on the following calendar:

table: /

8 M ‘a °" OW. a! .aee

(1b) 2 a eS 6 rd

os) ~ 2 ne 13 19

(15) 6. IS a. |

22 23 4 25 5 =o. 2

(29)°- . 30 $l, «:

.

Since these fights ‘are conducted on the same day of

each week, .the service isnot irrefular within the

—__ Meaning of P,irt, 29k Moreover, if over. a period of

_ Weokstoceasional Sunday flight ix omitted. or jx Op-

erated on some of er Ht the week, such minof.

Variations in the genera tern of regulari a 4

not cause the service to bee me an irrestlar staytoe.”

-(2). An irregular air carrier operates hetwegn poimé€

Nand B, in, one direction, on the days of the month

whieh appear in’ brackets on the following calendar’

table: . ; ir

>

S M T> W 7 F S

i 1 (2 3 (4) 5 .- 6

7 8 ae ee ‘12 3

14 15: (16)- 17° (18) 19 uD

>: ae (23) 24 (25) ?6 yt |

2s 29 (30) eb :

by flights are conducted’ regularly, twice a week.

. without frequent and extended.definite breaks in serv-

ee and are obviousl¥ not irregular within the mean#ig

of Part 291. Moreover, if over @ period of weeks an | .

occasional flight is omitted, or is operated on some —

other day of the week, such minor variations in tiie

general pattern of regularity would not canse the

service to become an irregular service.

(3) An irregular air carrier.operates between points

A and B, in one direction, on the days of -the-month—

which appear in brackets on the following calendar

table: o* .

S M ee Maa fe S

as eas ae fe 2 3 4

e ae, | tj a ee 10 11

12 [13] 44 =. 1§ «16 WZ. [18]

19 20 21. [22] 93 24 5

[26] 27 28 29 [30]

These flights are conducted at regularly recurring

periods, or substantially regular periods (every 4, 5 or

6 days), and therefore %do_ not achieve infrequeney

and irregularity. of service through frequent and ev-

tended definite breaks in service. Such service is not

irregular within the me; ining of Part 291.

‘\

° . %

=

(4) An «irregular air carrier operates between

points A and*B in one direction, on the days of ‘the

two successive months which, appear in’ brackets on

the followirig calendar table:

S- teas Smee Smee I Ss

se a ey —— cee", ee ~ 9

3 4 (5). ¢€ [7} s 4

i. {11}. {2} 43 14 6 -i6

17 IW (19) [20] oy 23 z

-t [25] Be f2T] ok ty

31 |

ae I [2] a) ao ae

: 7 s ee |. oe | Cen; ae

i4 = - 6. Bs &. 19.4 20,

: >| Te b> 233 “400 [25] 6. 27,

[28] ry 30° 31]

These flights are conducted twice a-week in suecoed.— a

ing weeks without the intervention of other weeks. ot

siinilar periods at irregular. but frequent intervals

during Which no flights are operated, Such service js

not irregular within the meaning of Part DOL, .

(8S). Four large irregular air carriers agree to

utilize the services of a single) ticrket agency, XYZ

Ticket Ageney, ‘Inc., with respect ‘to service between

points A and B, and to furnish to the agent the dates

upon which each will operate between and 1. If tie

flights, considered in combination? of such carriers be.

tween .\ and B reveal a pattern of operations similar.

to those shown’ jn examples. (1) through (7) -ahove, :

the combination of flights constitute regular air trans-

portation and each such carrier is deemed te be eon

. ducting regular operations between A and B.

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——.-— +." STATEMENT OF THE CASE.

The respondent issues an ‘airline trip” insurance policy’

from automatic vending: machines, It had such a vending’

machine located at Boeing Airfieid, Seattle, Washington.

on November 19, 1958.

The deceased insured, Sgt. Robert. J. Caruth, hav pur ‘.

chased a ticket for an airline ‘trip aboard a commercial

aircraft operated by Peninsular Air Trans; port, to fly fron

. Seattle, W ashington to Chicago, Hlinois. (Rees 122, Vos.

_of Ree. 40). The airtine trip was scheduled to leave Séatgie,

oe “Washington at_6 200 P.M. on Nove mber 1%, 1h,

The ecunicied Sut. Carutli pyior to his departure ‘on

the airline trip to ‘Chicago, Hlifois, pure hased one ot the

“airline trip’ insurance »poffcies from the respondent's

automatic vending machine lovated at. Boeing Airtield,

Seattle, Washington, the saan point for: the ‘airline

trip in question.

Moments after take off, the huge De 4 airliner erased ;

in flaines thereby. causing the death of Set. Robert J.

Caruth, a passenger,

The beneficiary, | Margaretha Thonipson, reeéived the

airline trip? poliey i the’ mail a few days later, and on

Novenber 25, 1955, notified the respondent of the ins

death, pe | |

The respomlent Te} ied “hy letter af November re Se 1'3.3,

stiiting they were not entirely sure, but they didn "f think

the “insurance polies covered the aifline trip in iettion.

(Pitts Ex. 4, Ree. 172, Abst. of Ree. 49) Respondent sites

.

a ere

the premium ‘would. be. returned “promptly” if it was

deemed to be ‘tin order’? The premium return was finally

offered approximately one month mater » but not accepted

by the petitioner. ~ sag sabres tae

'

Respondent refused) to pay “the polievton. the grounds

that the airline trip in question, wis not’ that of a

“scheduled air catrier” under. the definition of the poliey,

Z as the aire arrier, Peninsular hie Transport, Was licensed

an “irregular ar carrier” by the Civil Aeronautics

‘Board.

Petitioner inion suit on a complaint alleging in

‘the alternative, - as permitted by Section 43, Chapter Ald,

Hinois Revise

W509, that the fight in question

the terms of the policy, or that

sfespondent lad waived

Bright to axsert_ its technical

definition of “scheduled”

Respondent denied this (nm its answer, and set out the

‘definition of “scheduled air arrier”” as defined in the

Federal statutes. To this petitione Hled.a reply. The case

came on for- trial, During. the the triak court was

‘adamant. that the policy coverei airline trip in ques-

tien and said he would. direct a verdict in favor of peti:

toner. The trial court. however, would not let petitioner

put in any evidence on the «juestion of Waive > and estoppel,

“ying if ie had made a mistake. the Upper court wonld

correet it, (Ree, 136, Abst: of Ree, 36)

Judgment of $25,000.00) was entered for petitioner of

a directed: verdict. The Appellate Court reversed with

at remandiag despite petetioner’s insistence that «he

sould be allowed. te put in evidence on Waiver and es.

‘oppel “Phe Supreme Court. of HlineiS refused’ to hear

The question, '

oe

es

—1li—

HOW FEDERAL QUESTION RAISED.

Tie Petitioner in its complaint alleged the aireraft int

question, on which the deceased Sgt. Robert J. Caruth

-embarked on an dirlije trip from Seattle, Washington; to

Chicago, Illinois, and ‘hich. airline trip the deceased

“sought to insure. himself, was in fact schéduled for a deti-

nite time and was? a definitel¥ scheduled airline triyy be

tween named commercial airfields -and therefore a‘ schsAL-

led aircarrier™ within the tetms of the’ poliey. The re-

~ponde nt in its motion to strike, as well as in its anwser

“denied this and set out paragraph 5 of the poliey, which pur-

besa to restrict the usual use,~sense ‘and definition of

‘schednled” to that technical definition of the word “ae ‘Hhed-

ted” Massed by the Civil Aeronautics Board. All other air

Catt according to respondent, “recognized, designated,

censed, or determined by the governine ‘ntal authority saci ing

jurisdiction over civil aviation as being irregular. or non-

scheduled ‘air carriers” are exeluded’ from yerage under

the policy, In support of this, the Respondent offeged, and

it was admitted into evidence, Title 49, U.S.A ", Seetion 481

(a) (hy); Tithe 4, 0 S.C. Section 496 (av) -(b); Civil

Aeronautics Board eadnedie Regulations Part 290.1 and

YUL oad: together with Board Regulation ‘Serial Nur

bers” Which: explain and form apart of said economic

regulations, The trial court, however, entered duedg.

ment for the Petitioner on simple, non-federal cont Pact

with grounds saving in effect. the layman's definition of

“scheduled airline trip should apply and that the tee

ae ai deiimition of the Federal statute: could not apy

sO us to defeat the Petitioner's recovery. The federal (<< 0+

Was framed, however, and the Appellate Court of Plone.

Wr Distriet, reversed the’ tral court on the basic oft ©

te ores ; ae ye

~~ ; q° ‘ /

Federal statute in* which*the policy of: insurance in ques-

tion is actually predicted and issued, and said that without »

-a doubt the technical definition of the statute should

apply. The Appellate Court thérefore reversed the trial

court and denied recovery to the Petitioner because of the

’ s * a

Federal statute, and based on a haphazard and erroneous

mterpretation of the terms of the Federal statute in ques. -

"tion, which is ngt in accord with the Federal court's. inter-

pretation of that statute: : 9

oO

AS a result, because of the Respondent's misuse of a

Federal statute im issuing its policy of insurance, and the

end District Appellate Court of Illinois’ misguided in.

terpretation of that Federal statute, and the Supreme

Court of Illinois’ refusal to furtherYhear the issue by a

denial of the Petitioner’s petition for leave to appeal which

was filed pursuant to Section 75, Chapter 110, Illinois Re-

"vised Statutes, 1957, the Petitioner has been deprived of

under the contract of insurance. ©

$25,000.00, and interest which rightfully belongs to her °

| A

: Normally, ; an insurance policy does not involve a Federal

question. The instant case, how ever, presents a rather nove]

- and unusual situation.

W ith. thegrowth of the air industry following World War

“Kec ongress. passed the Civil Ae ronauties Act of. 1938 for

the purpose of regnlating air travel for the protection of

the general public. The Board of ( ivil Aeronautics (here-

inafter referred, to as **Board’’) was —- by Title

49, ELS.C. See. 42 D(a) to promulgate * such rules as it

deemed necessary ‘to effectuate the Act. Title 49, U. S.C. .

See. 481, 496 (a) provided for licensing and classific: ation

OF air” carriers forthe“ pur pose-of this Act®; cas

The Fidelity & Casualty Co. of. New York, respondent

herein, has attempted to convert the air carrier classifica.

tions established by the Board te their own private use

in Insurance contracts, a purpose for which C ongress never

_tintended_ the classific: ation to be used and a purpose for

which they are not’ adaptable: ° | ?

The Board issued Economie Nieitibiens Part 291.1 (a)

.(b) (@) “(d-1) (ds2) and Part 291.2 together With explan-

_ atory Regulation Serial No. ER-136, 13 F.R. 7769} ali of

which are set out in this Petition. There was thr estab-

lished for purpos? of Federal governmeut regulation dit-

ferent classifications of aircratt as well as elaborate tech-

nical data explaining how a-particular classification was

to be determined. Naid classifications included ** Scheduled

Air Carriers’? and *Trregular Air Carriers’’. A different

kind of license was issued to each classification and that

license ‘tonne’ in W ashington, D. C Much litigation de-

veloped and still continues involying the question of ‘when

Is an ‘irregular air carrier’ Violating its license SO as to-

he“ imitating a ‘schedtided air carrier??? The Federal

courts have recognized the Aighly technical -nature of the

“question and as in ‘American Airlines, Inc. v. Standard Air-

lines, Ine., 80 Fed.” Supp. 135, 139 (1948) the Court, said

the question was so highly technical, only the Board haab

the technical knowledge. to determine the ‘answer,

futo this. technical abyss strode the idelity & Casualty

- Company of New York, Responde ‘nts and issued an “air-

line trip’? ‘policy based solely on the aforesaid technical

classification of ‘scheduled air carriers’. The policy . wes

not sold.by a living: salesman, but by an automatic yend-

ing machine, The respondent knew the’ diffic ‘ulty, involved

in determining between the Classifications established hy

the Board, and knew th ey could thereby capitalize upon.

such. confusion by issuigng the so-called ** Airline. trip"

policy in question, entitling it ** Airline Trip Insurance”

stating that only scheduled” air carriers were covered.

As a result, the r respondent has accepted in the. past, as

_it did in the instant case, premiums for which it never in-

te nded to renderva benefit, and will continue to accept sich

“premiums in’ the future avithout the intent to render

hoi ica

Since the insurance poliéy in question is based. entirely

upon ‘and. detined in the light ol a Federal statute, the

~. statute becomes: a. part of the contract and must be in-

Cuded as) though: expressly incorporated therein, 'T his

Means not only. the statute itsel, bul the interpretation

“f that statute as statute S Gre Coustrucd, is

Citing the case of United States vo Union Pacific Rad-

. way Co., OU, i de oe he Bl, 28. ie cos said in Per-

4

poles.

ieudl Indiistrial Bankers v.( ‘itt: ens Budget C 0, , 80 ek. »f

327, 328 (1935):

“We recognize that in “construing: a contract which

“rests upon statute, the statute must be read into the

Contract, and that rules for construing’ statutes are

not those which “apply to the -cotistruction of con-

tracts.”’

In the case of Northern Padtiffc Railway Seulaeny v.

Well, 241 U.S. 87, 91, 60 L. Ed. 905; 907 (1915), the Court

said in holding that a bill of lading issued under a statute

should be interpreted in light of the statute:

“As this Court has often held, the laws in fore at

the tithe and place ofthe ‘making of a contract, and

which affect its validity, performance and enforcement.

enter into and form a part of it, as if they were e Xpress.

ly referred to or incorporated in its terms.”’

What the respondent has thus done, is to put the pur-

chaser of the ‘airline trip” poliey in a position where he

must unknowingly interpret the technical Federal statute

‘creating the classifies ation of air carriers. The Appellate

Court of Illinois says ‘this is a simple matter that ariy-

one should readily be able to determine. The Tinois Ap-

pellate Court says at page 170 of its opinion A Thowpson

v. Fidelity and ( oe 6., 16 TIL App. 2d 159) with refer-

ence to **scheduled”’

“This term wwe a clear-and ¢oncise meaning and.”

when defined by any standard it simply denotes an air

‘arrier Which operates antl holds ifself out to the public -

that it does operate aircraft Betwecen de siquated soil

regularly, or with a reasonable degree of reaularity,

pursuant to a schedule prev iously announced. "* 4 Min.

phasis ours)

The opinion and deeision of the. Hlinois Appellate, Court,

however, is emphatically not in accord with the Board's

View of. the: inte pretation: (See_ the lengthy Regulation

—19—

Serial No. ER-136, 13 FR. 7769 promulgated. by the board,

pg. 7 herein), and isgnot in accord with a single recorded

opinion of the Federal Courts on the subject."For example,

in American, Airlines, Ine. vy. Standard Airlines, hiv... 80)

F. Sapp. 135, 139 (1948) the Court ‘said about the identical

definition used hy the Minoix. Appellate Court:

“What constitutes thic Operation ‘of air flights

‘requarly or with a reasonable degree of veqularity’,

and what constitutes serviee of such intrequeney as

to preclude an implication of a uniform. pattern or

normal consisteney of operation is not defined in the

Economie. Regulation of the Net: the definition was

- Wisely left flexible heeause as the Regulation and the

Explanatoéry. Statement pron ulgated by the Board in

connection therewith show, what would constitute * req-

‘ wlarity’ or ‘a uniform pattern of normal consistency

of operation” might vary with time, place, nature of

flights aud circumstances, Lrrespective of the simplic-

ity or complexity of: the question in’ this particula;

case, if is evident that the question is wf-a kind that

can be a highly techvical one. calling for expert know.

ledge. of the industry, and that: the Board, whieh

phrased and promulgated: the Regulation, and with

Which operational] reports of all irregular air carriers

are regularly filed, *so that it may maintain adequate

supervision * * * with respect to iad opera-_

tion’, is much hetter equipped arid qualified to deter-

mine it than the Court could possibly be.** (Emphasis

supplied) . . a ii

Ta Pacific Northern Airlines v. Alaska Airlines, 80 F.

Supp. 592 (1948)/ the Court said at page 608 of a very)

lengthy and involved decision that while the reneral tenor

and hody of evidence *indiented the detendant did not

advertise or expressly claim” that it operated a scheduled”

service between Anchorave, Alaska, and Seattle, Wash.

ington, “yet in view of all the civeuinstances that conclu-

ston Seems’ unsound.”

s

—v

4

oc

‘

—20—

To jndieate : ioe comple ie ly “devious ‘and une ertain ean

be the definition of what is, and what is not, a ‘*scheduled”’

air carrier, or one purporting to ‘operate regularly, at-

tention is directed to Air Transport Association ¥. Civil

Aeronautics Board, 199 F. 2d 181. The ease involved the

transportation of persons and freight) between Se: attle,

‘Washington and Alaska. One of the airfields involved,

incidentally, was the airfield in question, Boeing. Airfield,

Seattle,. Washington. The airline in question was held

to be Violating its license of operation as an irregular

air carrie r by Holding itself! out through a ticket ageney

as operating a regular schedule. The Court said the prin-

‘cipal was responsible for the representations of its agent,

the ticket agency, and the airline’s license was sus-

pended. . ot

.

Iiven the facts upon achich: the Appellate Court of

Illinois based its erroneous decisién were insufficient in

light of the foregoing Federal -cases -on the subject,. and

particularly since petitioner was not: allowed to put in

any evide ‘nce on that issue, fA

The crux of the matter is tye by the eral of the

Appiliate Court of dllinois, and Yenial of le ave-to appeal

by the Supreme Court -of Illinois, ‘the’ vespondent As ale

lowed to issue an “airline trip” policy based on a Fedéral

statute, and is acknow ledged ‘the right ‘to do so based Upon

the classification of ‘schedule aig carrier’? and * jrresu-

lar air carrier” as used in the Federal statute. The Court

‘has ignored, however, thie intended: tise of the ‘terms

scheduled” and “irregular,” by. the Kederal lewisla-

lures and thei? @xtremely technical application. The Lill

nois Court has tus failed to follow Federal law on the

subject, and” has used the term tise heduled ¥ -in a vacnum.

As-a result, the Illinois’ court. has not ineokpo rated the

entire Federal statute and its interpretation int@#€the con-

° ~

oe ;

=

tt

oy

, .

ane . 4 . 5

tract of insurance as required@by law so to “do. They

should have done so*as prev iously stated. The: poliey of

insurance becomes grossly dtunbiguous when the correct

interpretation of the Federal statute ix applied, and: the

policy’ should be construed in favor of the petitioner and

the judgment of the Trial Court. atfirmed.

ed : |

“The. term “seheduled”? as used in the poliey has two

meanings. One a technival meaning éreated by the Federal

statute, and another the layman's definition of *‘sched-

ed’’, meaning pre-ar ranged time. The Hlinois Court says

there arSQot. two meanings for the term, and that the

term ‘scheduled’? as used in the policy and the Federal

statute is not technical. To. so hold is ‘not just) or

logical, or in accord with Federal decrees and decisions.

It ignores the problem a purchaser has of realizing there

are two Mneanings for ‘scheduled’? and ignores the prob-

lem: of separating the ‘real’? frem the imitation under

the Federal statute, thus ignoring the. é@ntire practical as-

pect of the situation. For example, you go into a com--

mercial ticket ageney and buy a ticket tor an airline trip,

from Chicago; Illinois to W: ashington, D.«., aboard a DC .4-

ot Illini Airlines, Ine., leaving. C hicago at 7:00 A.M. With-

out further information, is your airline--trip being made

on a ‘scheduled air earrier’’?

a

~The Federal statutes’ in question together With their in-

_terpre tation should be incarporated in the insurance policy

“in question. As a result, the policy becomes highly techni-

eal and ambiguéus. This tact was recognized in Lachs v.

Fidelity & Casualty’ Co. of New York, 306 NOY. 357, 118

N.K. 2d 455.(1954). There.the highest court of New York

held esse ftially ‘this same policy issued by this same

respondent to be ambiguous. The majority opinion in that

_ fase is thé postion of the petitioner here exactly as. to 7

the ambiguity of the policy in question, particularly’ in

a .

o?

220

P 2 : 7

view of the way the policy is issued from an automatic:

vending machine, tlie subtle use by. the respondent of the

term “airline trip’, and thé fact that the respondent in.

* tended to keep the premaym paid by the decedent- had hi

arrived safely. The New York Court -said in the Lachs

‘ase at page oo9 of 118 NE. (2d) OW). (1954) ;

s Decedent Was invited to -pure ‘hase * Airline Trip In

surance’; she applied for ‘Airline T rip Insurance’; on

the envelope to carry the policy to her daughter, bene

‘ ficiary ; wae * Airline Trip Insurance’ but detouikani

says that was not what decedent: purchased. Shall the

defendant which wrote the potiey he permitted to say

that ‘Airline Trip Insurance’ ‘imeans just what |

choose it to mean’ and therefore a flight of a ‘non. -

‘scheduled? airline is not covered by the poliey."*

‘The eminent Justice J. Cardoza said in Paskusz. vy.

Philadelphia Casualty Co., 218 N.Y. 22,°106 NB. 749

(1949) that insurance -policiés should nat be:

‘‘eouched in language as to the construction of which

- lawyers and courts may honestly differ.’’

In Zinn v. Equitable Life Insurance C ompany of lowa,

‘6 Wash. 2d 379, 107 P. 2d 921, 924°(1940) it was said:

" ” The language of insurance policies is to be inter-

preted in accordance with the Way it would ‘be under-

stood by the average man, rather than in a technical

sense.’? ay :

To the same effect is Mosby v. Mutual Life Tnsuraine

Company of New York, 405 I 599, 607, 92 NUE. 2d 1028

(1950). ,

®,

The -fact that the Petitioner at the outset of this ease

did not base its claim on the Federal statute or that the

. trial court ruled in the Petitioner's favor on non-federal

grounds ‘does not effect thix Court's right to jurisdiction

if it desires..to exereise jurisdiction. Jones National Bank

-po2se similar to the instant ease so. far as logic and basic

reasoning are coneerned, The plaintiff had sued the: de-

fendant bank for dainaves for false. representation of. the

bank’s financial condition. The hank defended on the

“knowingly.’? Judgnient for plaintiff was reversed in the

State Supreme Court on athe pleadings based on the

Federal: ‘statutes use of the word. “‘knowingly’’. The

plaintiff in error petitioned for a writ of error to the

United States Supreme Court. Mr. Justice Hughes said

in delivering the opinion of -the Court: .

“It-is insisted that the writs should be dismissed in

the view that the plaintiff in error sought to enforce

liability upon non-Federal. grounds and that the Fed-

éral question was raised exclusively by the defendant

plaintiff’s ease. The fact. that their petition did not

_Tefer, in terms, to the Federal statute, is not con-

trolling.’’

Alxo:

be a‘ recovery at common lav, independent of the

Federal statute, did ‘not alter the inherent character

of the. actions.’ °° tem a

In Satterlee y. Matthewson, 7 1. Fa. 458, 2. Peters 580,

410 (1829) ;

~*Tt has also been settled that in order to vive

Jurisdiction to this Court under the 25th Section of

v. Yates, 240 U.S. 541, 990, GOL. Ed. 788, 797, (1915) is a

‘grounds that a Federal statute defined the -liabilitv as

‘in error. But this objection ignores the nattne of ‘the -

“The conclusion of ‘the trial court that there could.

——

. : -24-

the Judiciary Act (2d Vol. Laws U.S. 65) it is not «

necessary ‘that the record should state in térms that

an act of Congress. was in point. of fact drawn in °

question. It is sufficierit, if it appears from tlie record

_that an aét of Congress“was applicable to the case,

* and was misconstrued. * * ne | pe

In the “event ‘this ‘Court grants Certiorari, the Writ —

should be-directed .to the’ Appellate ‘Court ‘of Thlinois, 2nd

District) Staté of Tllinois, beeause of Section 75; Chapter

110, Illinois Revised Statutes, 1957. See Minnéapolis’ St.

Paul and 8. Ste, My RCo. vy. Roark, 279 US. 410, 73 L.

Kd. 766. Poe Ss:

CONCLUSION.

~ We say the Appeiiate Court of Illinois denied liability

on an improper interpretation of the Federal statute with

which the Supreme Court of Ilinois agreed, and that the

entire decision rests on a proper interpretation thereof,

The Petitioner should not be deprived of her judgment

in the trial court-because of the impraper applications of

the Federal statute, and then be denied admission to this

-- Court because the case was treated as being of a different —

. Character. In Jones National Bank v. Yates. 240 US. o4t,

551, 60 L.. Kd. 788, 797 (1915) Justice Hughes said:

“Tf the plaintiffs’ cause of action required the sap-

plication of the Federal statute in deiining the Ha.

bility of these directors with respect to the acts

alleged and proved, -the plaintiffs were entitled to its

correct: application. Their jase, as made by their

pleadings and proofs, is nofté be treated as of one

character for the purpose of dismissine it) in the

state court and as.of another sort for the purpose

of denying their right. to complain of the dismissal.

We conclude that this court has jurisdiction: ”

;

)*

From a reading of the Civil Aeronanties Act: together .

with the rules and regulations thereof and cases thereon,

it is apparent the Act is far too technical to be made the

subject and basis of. an insurance policy; particularly as

issued here from ati automatic vending machine, wherein

the purchaser must unknowingly interpret the Ciril Aero

nautics Code, As a result, the policy is technical and-

ambiguous, and should be construed in favor, of the péeti-

tidner insured, and — the one who drew it.

We respectfully pray that the Writ for Certiorari be is-

sued because of the reasons given and the extensive use of

insurance and air trayel in our society today. -The decision

of the Appellate Court of Illinois should be ‘reversed, and

the decision of the trial court reinstated.

Respectfully submitted,

- Bernarp P. Reese, JR,

oa 901 News Tower Building, .

*~" Rockford, Illinois,

' Attorney for Petitioner. . .

—la—

hu, > APPENDIX A.

-/ Opinion of.the Appellate Court of Illinois.

AW HT - .: ee. eet

This issan appeal by the defendant froma ‘sila nten

ctered by. the Cireuit Court ef Wamebage County in the

suri off $25,000.00 in faver of the phaimtitt, Thy ease was

tried before a jury and at the’ conelus lon ot all of the evi-”

dence, the court directed a verdict in faver-ef the plait:

tiff in the sum ot oy UD Gre cand entered jud vient tdpoir

the verdict.

The facts as alleged in plaintiff's coniplaint, briefly

summarized. in substance are as follows: First, that) the

plaintiff. Margaretha Thompson, was the beneficiary under

two. pol: cies of insurance issued by the defendant. fidelity

And Casualty Company cof New? York. ino the stim al

"SIS TOL and $6250.00 respectively, Second, thatt on No-

vernber 17, T54. Robert ve ‘aruth, at that time the tus

~~ bane of the plaintit’, pure Masel the two potiei ies of isu

ance from a vending machine at. the Boeing » ield,

Seattle, Washington. immediately prior te a at ona

plane operated by Peninsular Air ‘Pranspert *Conrpany

-seheciled to leave at 8 0le%elock -PoM,. Third, that the said

Robert Lh. ( ‘aruth: purchased a ticket for an air tine trip

whieh was se heduled tor besive Dive oe badd at S200 of cloek

PM. but. which was delayed aah une WO oveloek midnight.

of November 1H, 155. Fourth, that by the terns of said

insurance polteres, the eecondiact contreet Lotter page ia the

henefiejary the sume ob 2. TOOOLUO die the event af the death

of Robert .L Caruth white ¢ rector dt an mi as woresult of

the air trip. covered: ty the air line tieket. Furth, that" the

anal i

(Opinion)

said aireratt did in fact take off from) Boeing Field at

or about 12:00 0%¢lock midnight ov said date With Robert

J. Caruth as ca passenger. Sixth, that the said) aireratt

crashed on take off and as a result thereof Rohert J.

Caruth was killed; and that plaintift made proper demans!

hut defendant refused to pray the Stine of $25,000.00.

The answer, As “amended, filed by the defendant ad

mitted: First. that Robert J. Caruth was a passenger on

the Peninsular Atreraft whieh took off from Boeing Field

,at about midnight’ November 17. 1955, and that said) ai

-craft erashied amd eansed Irix leath. Second, that the bene

Nielary gave proper notice and that the defendant refused

to pay. Concerning the allegation that the defendant con

tracted te pay the’ Henefieiary $25,000.00 in the event of,

the death of Robert Jo Caruth, defendant averred that it

did not so coytract but on the contrary, the insuring clause

of the policies limited coverage toa trip taken by the im-

sured “tafter the. purchase of this -poliey con Aireratt

Operated by a Scheduled Air Carrier as defined’* in the

policies add that the definition of an aireratt operated by

a schedufed air carrier did not inchide, and specifically

exgludedy aireratt operated by Peninsular Air Transport.

Plaingtitt tiled a reply to this answer denyimg that. Pen.

insula Air Transport Cenpany Was viet a scheduled air

carrier and denving that Peninsular Air Transport. was

recornized, designated and determined, as an irregular or

hon-seheduled air carrier.” The pleadings set out above

presented the essential issues decided by the trial eourt

Wiiel: are now before this Court for review, . |

Most of the facts were cither admitted in the pleadings.

‘stiptilated duritig the trial or established by. uneentre

verted evidence. The evidence reveats that om Novetidet

—

deere (Opinion)

17, 1955, Robe rt . Caruth was at the Boeing Air Field in

Seattle, Washington. There he purchased, fhrough a vend-

ing Machine, two insurenee policies in the amounts hereto-

iere stated, one at 3:42 o'clock PLM. and the other at: nee i

o'clock PLM. That, thereafter, the said Robert Jl Caruth

purchased a ticket for an air trip, which was sold to him.

through an ageney, and boarded a DC-4 afreraft operated

by Peninsular Air Transp rt Co. which aircraft teok off

‘rom Boeing. Field about seven miles south of Seattle, at

around midnight, crashing on take-off and killing CaPuth

Peninsular Ar Transport Company was in November of

Who, at the time of the occurrence in question, a partner.

ship owned by. William Roy Robinson and Howard Bert

Robinson, having its prineipal operation and mainte Narnnee

hase at. Miami (Fla.) Air Transport, Hangar Now 1. It

operated four aircraft and operated them under a ‘Letter

of Registration from the Civil Aeronautics Board and an

Operating Certificate from the Civil Ae ‘ronauties “Ndmin-

istration under Part 42 of the Civil Air Re ulations, Pen.

istlar Air ‘Pransport Company ‘did not ‘maintain sched-

uied flights, file schedules and tariffs for any regular pas--

senger. service, nor hold itsel! out ‘as , maintaining any”

regular schedule of flights.

The aircraft in question-left. Miami on November 13th,

1955, and flew without passengers to Richmond, Virginia.

It then flew to Tacoma, Washington, under a Military

CAM" Flight. From that point it proceeded without

passengers from Tacoma to Boeing Fiela, Seattle, Wath-

ington, arriving on November 14th, 1955.° The sireratt

Was not at the time-sof the 1 ‘ash, owned, operated or

chartered by the United States, Government. When the

aireraft arrived at Booing there were no flights+ for ‘it.

It left Boeing Field on November 17, 1953 , ona theht that

—4a—.

(Opinion)

Was composed. of 100% military troops, which, however

were andividually ticketed passengers. On this fatal flicht

that left- Seattle on November Ith, the passengers micht

have been under orders, might have been on furloughs.

or. micht have” ‘been enroute for any number of reasons. |

prospective -passenger on this type of flight is given an

weney ticket, whieh is exchanged for a carrier. ticket.

(Peninsular Air Transport sold all of its tickets throuch ’

agencies, Sometimes these tickets stated the. hour of de

parture and sometimes they did not.} Ff oan ageney Wits

unable to sell sufficient tickets to make a pay load, Pen

insular was not obligated to take off and had the preroga-

tive of cancelling: the flight. William Rov Robinson, one

of the partners of Peyinsular Nir Transport Co., testitied

that he believed there was some ‘thing on the ¢ farrier tickht

which stated that it was not a se heduled carrier and to his\

knowledge this was true of Peninsular Air Transport. .

he evidence is contticting as to the exnet time set for

take off. The specific time set for take off. was de laved

ecause of weather. However, the airetatt did in tact take

oft shortly before. midnight. An. irregular air carrier some:

times gets only.a feaw hours’ hoti¢e of a fliht. On the date

of the crash, Peninsular had no regularly se heduled lhights

from Boeing Field to anyother point in the United States.

The routes flown by Peninsular are not exactly the same

as these flown by. scheduled air line ‘S,

Tt is the defendant? s theory that the only issue involved

in this case is Whether the insured was a passenger on al

aireratt operated hy a “scheduled air carrier” as: Ws

in the poliey. Further. it is urged by “the defendant “tha

the undisputed evidence shows that the Insured was net

passenger on an aircraft operated by a scheduled air car:

rer, and the trial court shoul Ihave directed. ave srdivt for

the’ défendant.

>

a a tt

(Option ). :

For a determination of this ease, We quote below the

portions of this poliey pertinent te the’ issues,

Tt commenecs with the following words printed in eam

tals and in type yourhdy te ice the size of the’ordinary type

in the bode of this polices: : |

os DO NOT PURCHASE MOREL TITAN A TOTAL

Ol £62500 PRINCIPAL SUM NOR FOR TRAVES,

ON OTHER THAN SCHEDU LED ATR CARR HERS.

* 8 #99

|

The next sentence reads:

“T hereby apply to Compariv named. below tor

Scheauled Air Carrier’ Trip (Airline Trip) Instirance

* *# #99

The next rns Provision is:

<2. $XAU RING CLAUSE: Ticket) or Pass Re-

quirement. The C onipany will pay the benefits speei-

fied “below jf * * *: the Tnsured suffers loss * * *

\. sustained under circumstances , specified below * * *

after the purchase of this policy on Aircraft Operated

\by a Scheduled) Air Carrier as defined helaw * * *

provided that at the time thate the Insured) sustains

sueh injury he is traveling on a transportation ticket

or pass covering the whole of said airline trip isstied

. to nm, for transportation on an airerats operated by.

a schedwled air carrier.” we

There follows this paragraph, the first clause of which is

printed in hol -face eapitals: and in type double the

_ordinary type: %

; 9

“OO DEFINITION OF ATRORAFT OPERATED.

BY A SCHEDULED ATR CARRIER, The words

*Aireralt Operated by a Scheduled Air Carrier’ as

used in this poliex, mean and are-defined as follows:

(1) aireratt of United\States registry, operated ona

regular, special or. chartered Hight by a scheduled air

clause all appearing on the frst pace of the poliey, '

* —fa—

pein iad J

(Opinion)

carrier holk ling a Certificate of Public Convenience and

Necessity issued by the Civil Aeronauties Board of the

United States of America, or its stleeessor, and: whiel

In accordance therewith files, prints, miadiriterins sre

publishes schedules and tariffs for regular passenger

service between uamed cities at regular and SPO! jee

times, or (2) aireraft of foreien registry opernted

a regular, special or chartered flight by. a schedules!

air carrier holding a certifiente, license or similer av

thorization for schedwed air carrier transportation 6

the country of the aireratt’s registry. and Wwhict "

accordance therewith Niles, prints, maintains ane ph

lishes schedules and tariffs tor reeular passenger sery

ice between named cities at recular and Specifier

times, or (3) aireraft‘ol United’ States registry on

erated ona regular se theduled flight solely within the

boundaries of a State of the | ‘hited States by a sehed

uled. air carrier legally authorized to corduet * sued

operation, and which. files.. prints, maintains and ¥?

lishes, schedules ‘and tariffs for regular passes:

service between named cities solely within the boc

. daries of such State at regglar and specified times.

Specifically exclided = from the above. definition of

‘Aircraft Operated by a Scheduled Air Carrier’ are

any and all aircraft operated by scheduled military

airlines and any and all aireratt ope ii Dw air ear

riers recognized, ‘designated, Heensed or determined

by the governmental authority havi ing jur nile Tien ove’

civil av tation as being irregular Or notiesechedub dua

carriers.’ .

Retwee ‘no the Insuring clause and thet above Definite:

following clause: ‘ >

-

“Oo. DEFINITION ANDO DELIMPEPATION oF

COVERAGE. This poties applies sags te suelo pein

* * * (a) while boarding, riding as patssemorer it.

alichting from or coming in contact vith: ean auireract

operated by-a scheduled air earrier as defined below:

,

. ay

—1a-— '

(Opinion )- Mj

or (1) while riding in or om a land conveyance pro-

vided or arranged for © * * by such> scheduled air

carrier *°* *: or (dl) in consequence of exposure as

the result of a foreed landing of, accident to, or dis

Appearance of aireraft operated bw a scheduled air.

ree. ~. -. 52",

Although the law of the State of Washington applies te

the case at har. the plaintif£ and defendant both agree that

it does not differ materially from the law of Hliniois con- ;

cerning the reasons governing Interpretation and const rue-

tionof insurance contracts and contracts in’ general. This

is sO agreed to hy counsel-in their wespective briefs and

both cite principally Tineis authorities and authorities

from other jurisdictions.

The rule of liberal const ruetion of insurance policies in

favor of the insured ninst yield to rules of reasonable eon

struction, and the rule vonstruing ambiguous provisions

strictly evainst the insurer’ will not: permit: perversion of

plain Janguage to create an ambiguity where none in fact

exists. This rule was recognized recently by this court in

Maryland Casualty Company v. Holmsaaard. 10 TIL. App.

“d.. 1, 8, 10, 133 NEL 2.8910, 913, 914, wherein it was

stated: :

olicies should be construed according to the

sense and meaning of the’terms used and it the lan-

guage is clear and unambiguous it Inust be taken in its

plain, ordinary and popular sense. (Cases Cited)

-***°* * Phe rule that ambiguous, lancuage is to be

coustrned most strongly against the insurer does not

authorize a perversion of language or the exercise of

inventive powers: for the purpose of-ereating an ame

sbiguity where none exist. (Case Cited)" '

“4s @ @ P

We have reviewed: the policy in this case and find that

it Contains no inconsistencies or ambicuities.” The poliey

Itself ix legible, sitiply worded and is contained On ote

is

.

- &

° a -Sa—

(Opinion) ;

sheet of “gig” iy nade paper, The poliey in its, simplest

terms agrees, in consideratgon ofa de inite’ premium, to

payvertain benetits for certain eles ore on an air:

It operated by a scheduled air carrier . Previded fur:

- that at the time the iusured sustains such injury or

._ loss ais traveling oma transportation ticket cove ring the

nqole Bi said air line trip issued to him for transportation

on iy, aireratt operated by a se hednled air carrier The

Jefipition of afi aire raft operated by a caheduled air car.

rier’ Lis set aout in paragraph six of the policy quoted

above. (This ldisuigion contains no inconsistencies: and in

not ambiguous. ) "ei

~~

“Ty

The construction, af? ‘the piwvisions. of the poliey is tor |

the court and what is meant by the term **se ‘heduled air

ear ie his & question of law, but whe ther the airplane Was

in fact a ‘*seheduled air carrier ** within the fheaning of

* the policy isa ‘question of tact. Hoi Iusurance Company

of New York v. Mendenhall, 164 IL 458, 49 N.B. 1078:

Yates Vv. Bankers Life and ¢ ‘asnalty Company, 415 [ll. 16.

11 N.B. 2d. 316; Goldstein v. Met ropolitan Life Tusurar ?

Company. old I. App. 168, 57 N. Ki. 2d. 645.

In the case of Latchs ¥. Fidelity’ And Casualty ( ‘om pans

of New York, 306 NY. BH7, 118 N.B. 2d 355, a situation

involving a scheduled air carrier was hetore the court.

In the Lachs ease, supra, the de Jvondant filed al afotion

for a sumnary judgment supporting its motion withealt

-davits. The ‘plaintitt tjled counter ~atfidavits, the motien

aor summary judgment was denied hy the trial court, whieh”

drde was.atfirmed by the ’ppe Late | Mivision and apy alee!

by permission to the C ireuit © ourt of Appeals. The clause

‘for integpretation in the Laehs case was ¢ ‘civilian sched

led air lines ”” as contrasteda with the fermi in the paste

case “schedulddl air carrier. "Phe Nx jority “opitijon, Int

;

Fd

Fy

° < +

ee a

‘ Q.

~@ .—Va—

. 8 (Qpinion)

Lachs ease held that under the New York summary jjudg-

sented, a een, fact Yor determination by a jury

Poxisted., 7The court RA page o. 50 of TIS NUE. 2d said:

Plaintiff clainis that Mian Rite, on aeaie

tained regular, published se ‘hedules of fares and sched-

ules showing passenger ifile rates and that it held

itself out as maintaming regular’ schedules. of flights

and that it: was heensed hy the Civil Aeronautics

ccratt in interstatey overseas and foreign air transpor-

tation: W e think there isa question ol fact presented.”

T here j is no such contention hy the plaintitt in the imstant

ease and there are no cmitlict of facts in the ‘instant case

Such as existed 1 in the Lachs CASO

Plaintitt’s complaint does not allege, rior does plaintiit

contend that Robert J. Caruth was a passenien at the time

‘ot Er

carrier’, but alleges that he was ona sar ‘scheduled ”*

to leave at 8:00 o’clock PLM. Plaintitt’s -theory is) that

“since ‘the plane was to leayg at a pr earranged time, it was

scheduled, within the mez we of the policy. Plaintift con-

tends that the term schedule in the policy has reference to

-the time and gives examples, such as: “a talk is sched-

euled’?, ‘Swe were Scheduled to leave ‘i. “the attack was

| whisdided’s “the parade is scheduled.’ " We cannot @gree

With plaintift’s theory or argument. A pres arranged témne

ean be set for any type, of airplane to take*off, such as a

~ private plane, aonavy plane, an army plane or even today

‘an aiteratt to outer, apaces or the moon, However, such

"prearranged time for take off does net make it a‘ sehed-

led air carrier’. within the meaning of the pote v before

US, © _ %

ment procedure: and the sharp coutlict-of facts there pre-

cand. tickets were ‘sold tor stated gir de of departure,

Board to-carry passyugers and. steight with large ‘aire

Op an aircratt operated by a ‘scheduled aur,

*,

>

~ Scheduled air ‘arrier. Definition number (1) states:

—10a—_ =. ea

Peres (Opmion) ‘. .

The definition of “an aireratt operated by a schedules

air carrier’ is set out in paragraph G6 of the poliey, supru.

Three different types of aireratt are detined as being a

‘*Aireratt of United States registry, operated on 2

regular, special or chartered Hight by a scheduled air

- carrier, holding a Certificate of Publie Convenione

and Necessity issued by the Civil’ Aoronauties Board

of the United States of America, or Its SUECOESSOR, pd”

x Whieh in accordance therewith tiles, prints. pariitarins

a ‘and publishes sehedules ane tarilts tor reetlar passey

ger.service between named Citles at revular ial ee

fied times.’? - - . ; Ris

; ‘ = a

Definition numbers (2) and (3) are not here in cwestion.

i There is nothing ambigtious about the term scheduled air

carrier, This term-has a clear and * concise meaning and

When defined by any standsrad it simply denotes an air ear

rier which operates and holds itsell eutsto the public that

“it does operate aircraft between designated. points ren

larly, or with a reasonable: degree of regularity, “pursuant

to a schedule previously announced, We are not unmind

ful of the fact that words have different meanings a@l «it

‘ferent: significations to different people ‘on different occa

sions or under various and different circumstances, but we F ;

cannot perceive how the term scheduled air Carrier can

have other than one meaning: that heing an ar earriet

whieh Operates aireralt detwoen designated points rest t

larly in accordance with previously AnneUnEeEd sehedules :

-The minority opinion in the. Lachs case lent itself tes P

Nall, COMpre hensive ane well written opinion CONCEr EN f

the interpretation OF scheduled and not-seloduled atti ‘

CAL page S60 of LIS Nwl. 2d it was My stated Ii tt }

ININOTIty opinion: ; ib "

Th Alice's Wonderland, a Word. said” this ty

Dumpty, *mesnus Just what d choose jt te Pavan”. Eas,

oT) eee

*

(Opinion)

ina jurisdiction more mundane, Lido not perceive how

_We may say that theeword ‘se Reduled? can mean ‘non.

se heduled,” hor do DT see haw we hay tala jury that it

‘anesay that an surance pohley whieh in OX press

~ terms applies *oulw” to? ‘scheduled vrlines* can cover

Mishtsby an airline lixted aul selhdese ‘ribed as ‘non.

se hedule a:

There is no evidence in the record that Peninsular Air

Transport © Tompany was a scheduled air carrier holding a

Certificate of Publicé Convenience and Necessity issmed by

the Civil: Aeronautics Board of the United States.- and

Which in accordance therewith files, prints, maintains and

publishes s¢ hedules and taritts for resular passenger se rv.

“ice between hamed cities at regular and specified tunes, In

Fact, the evidence is without coutlietAhat Peninsular Was a.

non-scheduled air carrier » Wiliam Roy Robinson, a wit.

hess for the defendant,. testified that “Te and his brother

Were partners and the partne rship ope -ated the Peninsular

Air Transport Company with four aireratt operating? un-

der a Letter wot Re vistration from the Civil Aeronauties’

Board and an Oper ‘ating Permit: from the Civil Aeronau-

ties Administr: ation, under Part 42 of the’ Civil Air Reeu-

lations. The Letter of RegistratioSand Operating Certiti-

cate were for the specified type 6f air i ig beat

commonly referred to as a “non-scheduled carrier.” Unde T

tus Certificate, Peninsular Air Transport did not main-

tain scheduled flights nor did it file any Schedules or tar-

ifs for any regular passenger service with the Ciyi] Aero.

auties Authority, nor did it in November, 6f 1955 advertise

or hold itself out as Maintaining auy regular schedule of *

flights. This w itness further testified thi when the air-

eralt arrived at Boeing Field there were no Nights for it.

He had no. partienlar flights in mind for it and st re-

mained in Seattle three or four favs. Mr. Robinson, further

estitiod that as an irregular ‘air Carrier Operator, he

‘

—.

=

-]2a—

(Opinion) ia :

sometimes only got a few hours’ notice that he was going

to have a flight. Sometimes the bids are awarded the d: ay

prior to flight. He further stated, that if after arriving at

Boeing on November 14th an agency would he able to. fake

up a flight from there to Laredo? Texas, he would have

Mown that route. Peninsular Air Transport. sold no tickets

itself, all being sold through agencies. (When these tickets

wre sold they soimetities stated the hour of departure and

sometimes did not.)

At the conclusion al all the evidence both plaintit? and

defendant presented motions for a direeted verdict. The

court directeda verdict in favor of the plaintity and denied

dlefendant’s motion. Where a motion to-direct a verdict is

made at the close of all the evidence, all of the evidence on. -

hoth ernegale Is 4 hee onsidered, Diron v; Smith. Wallace. Shov

Co. 258 TL » MOONE. 265, the question being. Whether

wie of ‘the she nee for both parties makes outa case, Funk.

houser nee Bankers ate Assoctatiqn, 237 Ul. App.

9,

It is not only the powe r nit also the duty of the court te

direct a verdict for plaintiff at the close of all the evidence

When Hie has nade out a case and ne evidence tending to

contre dict it is offered, Marshall Vv. John Grosse Cloths «

Co. 1s Tb 421,56 NK. SOT, or no evidence Jias been pte,

dived by defendant that in any Way constitutes adlefense,

eudependent Oil co Ws - tation VE Fert Dearborn Na

tional Bank, 311 UM. » 142°. 3,8. 458. dn the ease hetore

_ Us the plaintiff has se absolutely to make out a ease

and there is a complete absence inthe record of any evi

de nee fairly tending to prove all of the necessary eloment

ef the plaintitt’ s case. Therefore, the court erred in grat

ing plaintiff's motion fora direc ted verdict at the Close ot

all the evidence,

‘

i ae ~-a---

(Opinion) ;

The quéstion of law presented to the court upon defend.

ant’s motion for a directed verdict at the close af all the

rvidencesis Whether, When all of the evidence js considered,

together with all reasonable inferences from it in its Iest

favorable aspeet to the plaintiff, there is a total failure to

prove a necessary element of the plaintift’s case, Nelson y.

Stut> Chicago Factory: Branch, fue. S41 TN 887, 173 Nuk.

394. We conclude: that there was no evidence in this ease

tending to prove the necessary element of the plaintiff's

ease that Caruth at the time of his death was. a passenger

on an aircratt operated by a scheduled air carrier as de-

ted in the poliey.

Where evidetice of an affirmative defense is offered, as

in this ‘ease, it is proper to direct a‘verdict for the de-

fendant at the close oF all the evidence, Wallner y, Chicago

Consolidated: Traction C'o., PAD TI 1S. 91 NUE, 1053.

~The record hefore us is void of any evidence placing the

insured under the terms of the policy. On the contrary,

the affirmative defense interposed by the defendant that

“the insured was not a passenger on au aircraft operated

by a scheduled air carrier at the time of his death was -

established by ‘uncontradicted evidence. That being the

“ease, the lower court) should have directed a ‘Verdict ‘for

the defendant. |

The judgment. of the Circuit Court of Winnehago Coyn-

ty is reversed, ee >

bats JvupGMeNtT REVERSEN

Crow, Pe J. And Soltisburg, J., Concur.

, Lia—

APPENDIX B.

Judgment of Appellate Court of Illinois.

Uscrkp Strares op AMERICA

State of lines

Appellate Court

Second Distriet. oss: :

At aterm of the Appellate Court, begun and held: at:

Ottawa, on Tuesday, the Ist day cof Qetober, in the year

of our Lord one theusamd nine hundred and. fifty seven,

within and for tie Second Distriet of [limos .

Stconp Divistos. © ,

Present. Honorable DeWitt So Crows Presiding Justice

Honorable Clarence. S. Wright, Justice

Honorable Rov J. Solfisburg, Jr. Dustice

P Paul Vo Wunder, Clerk:

Frances M. Lambert, Sheriff

Be it remembered, That, to wit: On the J4th day,ot Jan

wiry, ALD. 1958, certain proceeslings were had and orders.

made’ and entered of.record py <nid Court, among which

ix the following, viz. : |

‘S No, 11071

Margaretlia Thompson,

Appellee,

vs.

: Fidelity and Casualty’ Company of New York,

i 2 a: . & corporation, , ‘

| . Appellant. :

“Appeal from the Cireuit Court of Winnebago County.

°

-l6a---

On this day came again the: said. parties sy and the Court, .

having dilige ntly examined and inspected as well the rec

ord and proceedings aforesaid, as the matters and thing:

therein’ assigned for error, and being now suftie ‘iently ad

vised of and concerning the’ Premises, are of the cca

that..in the record and proceedings aforesaid, and in tic

rendition of thes judgment aforesaid, there is ces

error, | :

Therefore, it is considered, and orderéd by the Court -

that, for that error, and others inthe record and proceed.

ings aforesaid, the judgment of the ¢ Circuit Court of Winne-

hago’ County in this behalf rendered, be reversed.

And it ixgfurther considered and ordered by-the Court

that the said appellant recover of cand from the said ap-

pellee, its costs, by it inthis behalf expended, to He taxed,

and that it have exee ution therefor,

State of {linois, ° . :

~ Appellate Court,

Second: District —ss,

.

-

I Paut Vv, Wunder, Clerk of the Newiileas ¢ ouek in and

‘tor said) Second Distrie of the State of THinois, and. the

kee ‘per of the Records and Seal thereof, do hereby certify —

that the foregoing is a true full and complete copy of the

Binal Ovder of the said Appellate Court in the above en

‘titled cause, now of record in iy said offiee,

7

n Testimony Whereot, T hereunto set TAY lazaliel

and affix the seal of said Appellate Court,

at Ottawa, this Ith day of August in the

year of our Lord one: thousiind Hine hundred

and titty -eight.

< Paul V.- Wunder

| Clefk of the Appellate C'our

(Seal) 4 . :

Pe)

—

=~}

«

~

‘APPENDIX C. ;

‘Order Denying Petition for Leave. to Appeal.

UNITED Sr. ATES OF Sieeese \

State of Mlinois

Supreme Court--ss.

Atca term of the: Supreme Court, begun and held. in

‘Springfield, on Monday, the twelfth day of May in the vear-

of our Lord, one thousand nine hundred and fifty-eight.

within and for the State of -[!linois.

Present Charles H. Davis. Chief Justice

Justice Joseph E. Daily Justice Walter V. Schaefer

Justice George W. Bristow Justice, Harry B. Hershey

Justice Rav 1.- Klingbiel Justice Byron 0. House

-Lathan Castle, Attorney General

Robert G. Miley,- Marshal

Attest: Mrs. Earle Benjamin Searey, Clerk

Be It ‘Rememberd, that, to-wit: on tie 20th day of May,

1998, the same being one of the days of the term of Court

aforesaid, the following proceedings were, by said court,

had and entered of record, to-wit ‘

‘ No. 348: 3y

°

Winantvitnn Thompson,

; Petitioner,

VS.

Fidelity and Casualty Company of New York,

: a corporation,

Bee eis Respondent.

Isa

Petition for Leave.to Appeal from Appellate Court

Second District (id 11071

And now on this day the Court having duly considered

* the Petition for Leave to Appeal herein as Well as the

record and abstract, fled in support thereof, and being now

full? advised swf and concerning the preinises, doth over.

rule the prayer of the petition and denies Leave to Ape

peal herein,

~

And it is further considered by the Court that the said

cream recover of and’ from the said Petitioner costs

by it in this behalf expended, to-he t taxed, and that it have’

eXecution therefor. :

I, Mrs. Karle. Benjamin, Searey,- Clerk of the Supreme

Court of the State of Gaels and keeper of the records,

‘files and Seal thereof, do hereby “certify that the foregoing

ix a true copy of the final order of the said Supreme. Court

in the above entitled cause of record in mysoffice.

In Witness Whe reof, | have hereunto subscribed

tly name and affixed the Seal of said court

this 26th day of May, 195s, =

(Seal) : is ne .

Mrs. Earle Benjamin Searey ~

Clerk,

Supreme Court of the State of ‘Illinois: