Hyer v. Inter-Insurance Exchange, Etc. , 77 Cal. App. 343 ( 1926 )

I dissent, because to my mind the word "accident" in the indemnity policy in suit was intended by the parties to be given its ordinary meaning, and this the opinion of my associates holds it should not receive.

It must be conceded that it is a necessary presumption that the word in question was understood to denote its usual meaning unless some consideration of fact or law appears to the contrary. I find neither. The word "accident" as used in indemnity insurance appears to have a definite meaning. There can be no dispute upon the proposition that all authorities agree that an "accident" means an "unintended and unexpected occurrence which produces hurt or loss." It is impossible to read into this language any reference to the cause of the occurrence other than that suggested by the words "unintended and unexpected." These words merely describe the quality of the event as unforeseen and undesigned. It cannot be doubted that if this generally accepted definition be taken as applicable here, the facts of this case show that separate accidents occurred to the Overland and Cadillac cars. But my associates hold that an unusual meaning was intended by the parties, and that the word "accident" had reference to the cause of the events rather than to the events themselves. Of course, if this indemnity policy contemplated that an "accident" referred to a cause, and not to an "event," but one accident occurred, for there was but one cause.

Two cases are cited in the majority opinion to sustain the statement that in automobile accidents the injury and the cause are often inseparable, and yet, in such instances the accident is the cause from which the resultant injury flows as an incident. I am compelled to acknowledge an entire inability to discover anything in the language contained in either of these cases to sustain this assertion. Lewis v. Commercial Casualty Ins.Co., 142 Md. 472 [28 A.L.R. 1287, 121 A. 259], was an action upon an indemnity insurance policy, and in which the contest had been based entirely upon the question of whether or not sufficient notice of loss had been given, or if not given, the requirement thereof had been waived. I find no attempt in the opinion to define the word "accident." In Tuttle v. PacificMutual Life Ins. Co., 58 Mont. 121 [16 A.L.R. 601, 190 P. 993], the court does use the language quoted: "A result, though unexpected, is not an accident; the means or cause must be accidental." But the sentence which immediately precedes explains why the language quoted was used and the limitation clearly intended to be placed upon the same. It is said: "The word `accident,' in accident policies, means an event which takes place without one's foresight or expectation. A result, though unexpected, is not an accident, the means or cause must be accidental." (Italics mine.) Of course, it is true that in accident insurance the means must be accidental, for in such policies the form universally employed insures against injury sustained by the insured "caused solely by external, violent, and accidental means." Such was the language of the policy which the court had before it. It needs no argument to sustain the proposition that where the contract expressly provides that themeans must be accidental it is not sufficient that the event only was an accidental one. However, the policy which is the basis of this suit makes no reference to the means. In it we find no provision that the means shall be accidental. It stipulates to indemnify the assured against loss from legal liability paid to others for injury to or destruction of their property, resulting from an accident, that is, a certain kind of an event.

No decision has come to my attention in which the definition of an accident is announced which states that the cause of the event must be accidental, except those construing accident and life insurance policies, using the words "accidental means" in specifying and limiting the grounds of liability of the assured. This was true in the case of Rock v. Travelers' Ins. Co.,172 Cal. 462 [L.R.A. 1916E, 1196, 156 P. 1029], and a long list of decisions therein enumerated.

Since it is conceded that in cases arising under the Workmen's Compensation Acts, to produce an accident nothing more is required than that the harm which the plaintiff has sustained shall be unexpected and unintended, such decisions need not be cited. But, under them the circumstances of the instant case would necessarily constitute two accidents. However, it is asserted that there are decisions construing accident and life insurance policies which hold otherwise.

If there be such a distinction (and I have found none) both reason and authority make the conclusion inevitable that the decisions which have arisen under the Workmen's Compensation Acts are to be classed with those under ordinary indemnity contracts, rather than accident and life insurance policies in so far as the matter under consideration is concerned. The former, like the second class mentioned, provide for the indemnifying of persons from loss or hurt which has resulted to others. In each of the classes last mentioned the loss which the insurer is obligated to make good is not only one which has befallen a third party, but is one which the insured is required by law or agreement to compensate. Under the former the obligation arises from the direct mandate of the statute; under the indemnity contract it comes about through the fact that the insured is responsible for a happening which makes him liable in damages to another. In both instances the law compels the payment by the insured of the loss sustained. This legal compulsion supplies the element of cause in all indemnity liability, and would supplant that element, if it be conceded as ever included within the definition of an "accident."

If it were true that in certain cases the word "accident" denotes both the cause and its effect, while generally it means the loss or hurt without including in its content any reference to the cause thereof, there is reason for this distinction. This is well exemplified in the considerations which form the foundation for measuring the liability of the insurer in accident insurance policies and indemnity policies, respectively.

There is a clear distinction between an insurance against accidents which may happen to the insured and one indemnifying him against loss for injuries which he may wrongfully cause to others. The former, in so far as fixing liability is concerned, clearly involves an inquiry into the intention, and care exercised by the insured, and his part in producing the event from which the loss occurs. The insurer would not agree to pay the insured for a loss which was intentionally caused by the insured himself. It is understood that the insured in such cases must be free from blame and wrongdoing; but in an indemnity contract the opposite is true. There, the contract contemplates reimbursement of the assured by the insurer of loss sustained as a consequence of the latter being required to pay a third party for injuries inflicted upon said third party or his property. Of course, this necessarily involves a recognition of the fact that the assured was guilty of an act violative of the rights of another, so as to create a liability for damages to that other. In such a contract the insurer is not concerned with the cause, except as above indicated; and so, when a limit is placed upon his liability for any one accident, the cause is not taken into consideration, but only the event and the loss resulting therefrom to the assured. Hence, aside from the difference in language to which attention has been called, the definition of an "accident" contained in the ordinary accident insurance policy, and decisions construing it, are not necessarily applicable, but, rather, the more general meaning of the word "accident" is to be accepted, which, as stated in Fenton v. Thorley etc., Ltd. [1903], App. Cas. 443, is an unintended and unexpected occurrence which produces hurt or loss apart from its cause. Under this definition it is clear that there were two accidents in the instant case.

Nor is the application of the ordinarily accepted meaning of the word "accident," arising under Workmen's Compensation Acts, due to any peculiar phraseology of such acts. It is true that in construing these statutes the courts have said that their language should be given a broad interpretation, but in so stating no exception is made, but rather the general rule is recognized. Substantially the same thing has been said by the courts of various states in construing indemnity insurance policies founded upon contracts having nothing to do with Workmen's Compensation Acts; that is, in interpreting such indemnity policies it has repeatedly been held that they are to be liberally construed with a view to providing fair protection to the insured, and that in all such instances words are to be given their ordinary and accepted meaning, which is all that the Workmen's Compensation Act decisions have done in defining the word "accident." (Alabama Fidelity etc. Co. v. Alabama PennySav. Bank, 198 Ala. 337 [76 So. 103]; Murray v. KaskaskiaLive Stock Ins. Co., 204 Ill. App. 568.

But it would seem that all doubt upon this subject should be removed by the decision of the supreme court of Nebraska inChapin v. Ocean Accident Guar. Corp., Ltd., 96 Neb. 213 [52 L.R.A. (N.S.) 227 [147 N.W. 465], which, like the instant case, involved an indemnity insurance contract, and in which, referring to an accident, it is said: "The word `accident' is susceptible of and has received many definitions, varying with the connection in which it is used. It is: `An event that takes place without one's foresight or expectation; an undesigned, sudden, and unexpected event; chance, contingency; often an undesigned and unforeseen occurrence of an afflictive or unfortunate character; casualty; mishap; as, to die by an accident.' (Webster's New International Dictionary.) In the Century Dictionary, among the definitions given are: `2. Specifically, an undesirable or unfortunate happening; an undesigned harm or injury; a casualty or mishap.' As used in an indemnity policy such as this, we are of opinion that the word `accident' means an undesigned and unforeseen occurrence of an afflictive or unfortunate character, resulting in bodily injury to a person other than the insured."

In an attempt to distinguish the case of StaffordshireTramways Co., Ltd., v. Sickness Accident Assur. Assn., Ltd., from the one before us, the foregoing opinion argues that the fact that the indemnity contract sued on used the word "accidents" rather than "accident" in a certain context caused the court to hold that there had been two accidents in that case. The provision quoted from the Tramways Company case is: "So far as regards claims for personal injury and damage to property made against the assured in respect of accidents caused by vehicles . . . belonging to the assured . . . for which accidents the assured shall be liable, the association shall pay the assured the sum of £ 250 in respect of any one accident." The meaning of this statement seems to me to be clearly just this: That as distinguished from the subject matter of the rest of the policy, upon the point of "accidents caused by vehicles belonging to the assured," the insurer's liability should be especially limited as therein specified. The quoted language merely designates the subject of this particular clause in the contract. No other intention was indicated as intended to be conveyed, nor does the opinion in the Tramways Company case contain any language signifying that the court rendering it ascribed any different or special meaning to the provision because of the fact that the word "accidents" is used in plural form than would have resulted if the same idea had been expressed by its use in the singular, which of course could just as well have been done. There is nothing in the opinion under discussion, or in the wording of the policy, to even remotely suggest that the word "accidents," in plural form, preceding "accident" was intended to denote that the accidents in question should occur at any one time rather than upon disconnected occasions. The Tramways Company case is one in which the facts are squarely on all fours with those of that before this court. In the former it was definitely held that upon such facts two accidents, and not one, had occurred; and in so holding the court doubtless fully appreciated the significance of the words construed, quite possibly the more fully because of the brevity of the opinion, which will be quoted later. Others may disagree with the conclusion reached, but the facts of that case cannot be distinguished from those of the instant one. And this is of double importance because, like the policy being construed here, the other was one in which the insurer bound itself as surety against the results of wrongful acts of the assured causing injuries to other persons. These cases constitute complete parallels in point of fact, and I am convinced that the court's rulings should be the same.

Although there appears no ambiguity in either the provision above discussed nor in the opinion of the court in the Tramways Company case, my interpretation of both is strengthened by the opinion in Allen v. London Guarantee etc. Co., Ltd., 28 Terr. L. Rep. 254. My learned associates lay great stress upon the fact that in the last-named case it was held that there had been but one occurrence, which to my mind is merely an "incident to" the accidents. They ignore the important part of the decision in so far as the instant case is concerned, namely, that there were two accidents. The facts in the case of Allen v. London Guaranteeetc. Co., Ltd., supra, were: The defendants assured Allen against accidents caused by his employees when in charge of his horse-drawn vehicles. Two men, Turner and Ridsdale, were injured by a cart driven by one of the assured's drivers. It was found as a fact that the cart struck Turner, who in turn was thrown against Ridsdale, and both men fell and were injured. Each brought suit against the assured for damages. It was held that, although there were two accidents, there was only one occurrence, within the meaning of the policy, and that therefore the defendants' limit of £ 300 liability applied. The policy provided that the total aggregate liability of the company was to be limited to the sum of £ 300 for all claims for compensation, costs, charges, and expenses, paid or payable either to the insured or to any claimant or any number of claimants, in respect of or arising out of any one accident or occurrence. This decision goes so far as to be a precedent for holding that even in the supposititious case of one car being towed by another and both being injured there would be two accidents. It limits the consideration of the question to that of the event of the injury provided such event was unexpected and unforeseen, and it is so decisive and unequivocal as to preclude the idea of harmonizing it with a holding that there was but one accident in the instant case.

There appears to be no foundation for the idea that the word "accident" is used by business men in a different sense than as defined in the cases whose definitions have been quoted, and others to which reference might be made, containing language of like import. It goes without saying that such cases involved the construction of an insurance contract made in the world of business. In each it was held that the word in question is ordinarily understood to mean an undesigned and unforeseen occurrence resulting in injury. It may well be that in some indemnity contracts the parties expressly or by necessary inference have stipulated that by their use of the word they intended to denote a general catastrophe which might include injury to more than one person. This affords no proof that the word is generally used in the realm of business in that particular sense. It is a matter so generally known as to justify courts in taking judicial knowledge of it that insurance companies write their policies in a great number of forms with the distinct purpose of satisfying the public who desire insurance against risks of every character. But we need not go beyond cases cited in the opinion of my learned associates for instances where contracts entered into in ordinary transactions between business men were so worded that courts of last resort held that the word "accident" employed therein denoted not a general catastrophe, but a particular event or occurrence. Such were the cases of Allen v. London Guarantee etc. Co., Ltd., 28 Terr. L. Rep. 254; Staffordshire Tramways Co., Ltd., v.Sickness Accident Assur. Assn., Ltd., supra, and Chapin v.Ocean Accident Guaranty Corp., Ltd., supra. The first two of the cases last enumerated contained provisions worded similarly to that under consideration in the instant case, whereas this is not true of the policies which formed the basis of the suits inKlein v. Liability Assur. Corp., 9 Ohio App. 241, McClung v. Pennsylvania Taximeter Cab Co., 25 Pa. Dist. Rep. 583, andChapelle v. United States Fidelity Guaranty Co., 80 N.H. 481 [120 A. 556]. Our own supreme court has repeatedly stated its view of the meaning popularly assigned to the term "accident" to be the same as that announced in Fenton v. Thorley etc.,Ltd., supra, in which it is said, "The expression `accident' is used in the public and ordinary sense of the word as denoting an unlooked for event which is not expected nor intended." (Fidelity Casualty Co. of New York v. Industrial Acc. Com., 177 Cal. 614, 617 [L.R.A. 1918F, 856, 171 P. 429]. Citing WesternIndemnity Co. v. Pillsbury, 170 Cal. 686 [151 P. 398];Southwestern Surety Ins. Co. v. Pillsbury, 172 Cal. 769 [158 P. 762].)

Adverting now particularly to the contention of appellant that the single act or omission of the driver of the Marmon could not cause two simultaneous "accidents," within the proper interpretation of the phrase limiting liability to $1,000 for loss or injury arising "from one accident," if there was a causal connection between the two collisions, the question presented is as to whether or not respondent's assignor was insured against damage to all other persons collectively to the extent of $1,000 only, if damaged by a single mishap, or against each just and valid claim of one or more persons to whose individual property or person separate and distinct accidents might occur as a direct result of the operation of respondent's automobile.

A pertinent illustration of a case which would exclude liability is Kangas v. Standard Accident Ins. Co., 138 Minn. 418 [L.R.A. 1918B, 504, 165 N.W. 268], wherein it was said: "For instance, if, when the plaintiff was drawn underneath the passing train, a car wheel had passed over his hand thereby severing his four fingers, one at a time, could it be said that the event constituted four accidents and four distinct injuries to his body?" Had the Cadillac machine had four parts broken by this collision and had a separate claim been made for each, the situation presented would have been similar to that in the case last cited. I am in entire accord with the holding of the Minnesota court that the loss of all the fingers of a man's left hand would in such a case constitute but one accident within the contemplation of the policy of insurance there under consideration. But in the instant case each of two automobiles, in no way interrelated, and owned by different persons, suffered an accident as a consequence of negligence in the management of the Marmon car which was insured against the liability of its owner for injury to another. True, there was but one incident which superinduced the successive impacts, but as a result of the Marmon leaving its proper course, the Overland was damaged "from one accident," and the Cadillac suffered damage "from one accident." The policy did not stipulate a maximum of liability to the extent of $1,000 for all damage resulting from one proximate cause; it limited the liability "with respect to claims . . . from one accident."

Mention has been made of Southern Staffordshire Tramways Co.,Ltd., v. Sickness Accident Assur. Assn., Ltd., 60 L.J.Q.B. 47, 63 L.T. 807 (1891), 1 Q.B. 402, 55 J.P. 168, in which the English court of appeal construed a similar policy of insurance. No clearer exposition of the principle involved and which is applicable in the case at bar can be made than by recounting in some detail the facts of that case, and quoting from the opinions of the justices therein. The tramway company was insured against personal injuries, and damage to property, caused by its vehicles, in the sum of £ 250 "in respect of any one accident." One of the plaintiff's tramcars overturned, injuring forty persons, as a result of which the tramway company sought to collect insurance under said policy for each of the several casualties up to the full amount for which it was indemnified and "for which the assured shall be liable." One of the questions presented at the trial was "whether the injury caused to each of the said persons constituted a separate accident within the meaning of the policy." Of the two justices hearing the case, one ruled that "any one accident" should be construed to mean that "apart from any question of the number or amount of the claims made in consequence on the insured, as between them and the insurers, such an event as that which happened on November 24, 1888," constituted ground for liability as to but one claimant. The other justice said: "As to the second question, the meaning of `accident' in the phrase `any one accident,' I regret to say that I differ from him. It is, I think, to be borne in mind that the object of the policy is to provide for the assured an indemnity against claims made upon them for injuries resulting from the negligence of their servants. This being so, I think it more appropriate to hold that the preceding word, `accidents,' is used from the point of view of the several claimants upon the assured for injuries, each of whom claims in respect of a specific accident to himself, and not from that of the insurers, and that therefore `any one accident' means any accident to any one claimant upon the insured. `Any claim' would have been a less ambiguous expression. I think, therefore, that the defendants are liable in the full amount; but, as my learned brother is not of this opinion, I withdraw my judgment."

The case was thereupon taken to the court of appeal, wherein Lord Esher, M.R., said: "I think the construction of the policy tolerably clear. The assurance is expressed to be `as regards claims for personal injury and damage to property made against the assured in respect of accidents caused by vehicles.' These were claims for personal injury, i.e., injury to the person, and each person injured claimed for injuries in respect of an accident to his person caused by a vehicle. If several persons were injured, I think, upon the true construction of this policy, there were several accidents. I agree with the view expressed by Lawrence, J. For these reasons I think that the plaintiffs are entitled to judgment for the larger amount, and therefore the appeal must be allowed."

The other two justices concurred, each writing an individual opinion to the same effect.

Regarding the matter from the standpoint of the assured in his relation to a particular damaged car, the injury to the car constituted an accident, and a single one. It makes no difference how many other cars might have been damaged at the time by the same cause, there was one accident which caused the harm to this particular car. Regardless of the number of claims that might exist, all arising from the injury to that car, the greatest amount which the insurance company was obligated to pay for injuries to it would be $1,000. I think the policy is clearly intended to be viewed in this way, and in that light each car injured in the same general accident would, for the purposes of this contract, be regarded as having been the victim of its own accident.

A petition for a rehearing of this cause was denied by the district court of appeal on May 5, 1926, and a petition by respondent to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on June 3, 1926.