WESTERN MACHINERY CO. v. BANKERS INDEMNITY INS. CO.†
The above action was brought to recover upon a public liability insurance policy for a loss sustained by plaintiff by reason of a payment in settlement of a claim for damage caused by the negligence of an employee in the operation of one of its automobiles. The trial court entered judgment for plaintiff, from which the defendant appeals.
The policy provided that subject to the “exclusions and the conditions” therein the insurer agreed to “pay on behalf of the assured all sums (within the limits as expressed in the declarations) which the assured shall become obligated to pay by reason of the liability imposed by law upon the assured for damages, including consequential damages, resulting from loss of services and expenses arising out of bodily injuries, or death resulting therefrom, accidentally suffered or alleged to have been suffered by any person or persons by reason of the ownership, maintainence and/or use of any of the automobiles described in said declarations. * * *” One of the clauses under the caption “Exclusions” provided that “the company shall not be liable under this policy for claims arising from any accident or alleged accident of any kind unless the accident or alleged accident occurs within the policy period, or claims arising from the use of any automobile for purposes other than those specified in the declarations.” Also that, “This policy is subject to the following conditions:” Following this it was provided that “the premium is based upon the number and character of the automobiles, and the uses to which the same are put, as described in the declarations herein.” Another clause, numbered 11, provided that “none of the assured automobiles are or will be used to carry passengers for a consideration, actual or implied. * * *”
The trial court found that at the time of the accident the injured person was an employee of the Union Paving Company, who was being transported by plaintiff to enable him to inspect certain machinery which plaintiff desired to sell, and subsequently did sell, to the paving company; further, that such transportation was for a business call in connection with plaintiff's business; and that the injured person was riding as a passenger pursuant to such call. The court concluded that the automobile was not being used to carry a passenger for a consideration, actual or implied, within the meaning of the policy.
The question presented by this appeal is whether, in view of the facts, the insured is covered for a loss sustained to satisfy its liability to the passenger for the damage that the latter suffered.
The owner of the automobile was liable to a passenger for hire for failure to use ordinary care in its operation, while as to a guest mere want of such care would be insufficient to sustain an action for damages, it being necessary to further prove intoxication or willful misconduct. Vehicle Act (St. 1923, p. 517) § 141 3/4 (added by St. 1929, p. 1580), Amendments of 1931, Stats. 1931, p. 1693. The policy expressly provided that the rate was based upon the uses to which the automobiles were to be put as described in the declarations, one of which was that, although the same might be used for personal pleasure and family use, “including business calls,” none might be used to carry passengers for a consideration, expressed or implied. The words “business calls” should, we think, be interpreted in their ordinary sense. Wilmarth v. Pacific Mut. Ins. Co., 168 Cal. 536, 143 P. 780, Ann.Cas.1915B, 1120. There thus appears to be no uncertainty or ambiguity in the language of the policy; and it cannot fairly be said that there is a conflict between this and the provision forbidding the carriage of passengers for a consideration. Where the terms of a policy are plain, the court can indulge in no forced construction to cast a liability upon the insurer which it has not assumed. Ogburn v. Travelers Ins. Co., 207 Cal. 50, 52, 276 P. 1004. The meaning being plain, there was no justification for the admission of testimony as to the sense in which the trade understood the provision, or what was customarily done in making business calls. The latter provision clearly restricted the use of the automobile to the class of persons to whom the assured owed no higher duty than to a guest. The insurer has the right to specify the conditions under which it will insure (Sears v. Illinois Indemnity Co., 121 Cal.App. 211, 9 P.(2d) 245), and provisions similar to the one here in question have been considered in a number of cases. In Neilson v. American Mutual Liability Ins. Co., 111 N.J.Law, 345, 168 A. 436, a policy covered automobiles while used for “pleasure, business and commercial transportation of materials,” but contained a declaration that the cars would not be used for carriage of passengers for a consideration, expressed or implied. The latter provision was held to be a promissory warranty, compliance with which was essential to recovery. A similar case is Beatty v. Employers' Liability Assurance Co., 106 Vt. 25, 168 A. 919. So in Orient Insurance Co. v. Van Zant–Bruce, etc., Co., 50 Okl. 558, 151 P. 323, a provision that during the term of the policy the automobile “shall not be used for carrying passengers” was held to constitute a promissory warranty, a breach of which prevented recovery.
Statements in policies which import that it is intended to do or not to do a thing which materially affects the risk is a warranty that such act or omission shall occur (Civ.Code, § 2608), and a violation of such a warranty on the part of either party entitles the other to rescind. Civ.Cod, § 2610.
It is not necessary, in order to constitute one a passenger for hire, that there be a money consideration for the carriage; it being sufficient that some benefit or advantage or profit shall inure to the carrier. Champagne v. Hamburger & Sons, 169 Cal. 683, 147 P. 954; Crawford v. Foster, 110 Cal.App. 81, 293 P. 841; Sullivan v. Richardson, 119 Cal.App. 367, 6 P.(2d) 567; Royal Finance Co. v. Miller (C.C.A.) 47 F. (2d) 24; Haney v. Takakura, 2 Cal.App.(2d) 1, 37 P.(2d) 170. It is manifest that a benefit sufficient to constitute a consideration within the meaning of the policy was present; and we are satisfied that the provision with respect to the carriage of persons under the circumstances here shown was not ambiguous or uncertain. It materially affected the risk, and was a warranty that no such act would take place.
The judgment is accordingly reversed.