Kalamazoo Auto Sales Co. v. Travelers Insurance

It is a little difficult to determine the nature of the liability assumed by defendant unless we eliminate from the contract of insurance those provisions which are not here applicable.

The defendant agrees:

1. To indemnify the assured against loss by reason of the liability imposed upon it by law for damages on account of bodily injuries accidentally sustained, including death at any time resulting therefrom, except *Page 83 as to those employed within the provisions of the workmen's compensation law and those employed in violation of law, etc.

The injuries are particularly indicated in paragraph VI as those —

"sustained if caused by work incidental and necessary to theconduct of the automobile sales agency, service station orpublic garage," operated by plaintiff, and "shall include the work of making ordinary repairs for the preservation of machinery or buildings and the renewal of existing mechanical equipment, and shall also include all structural or mechanical repairs to automobiles or their parts, if undertaken by the assured as a part of the work herein defined."

Also, to such injuries

"if caused by the ownership, maintenance or operation * * * of any style, type or make of automobile, tractor or trailer, for any and all purposes in connection with the work herein defined, including pleasure use but not the livery use of automobiles for the carrying of passengers or property." * * *

This is followed by a provision that if the declarations contain a disclosure of estimated livery earnings the contract shall apply to the renting or hiring of automobiles for carrying passengers subject to call, etc.

The seventh paragraph limits the liability to injuries so sustained (a) while at, within or upon the agency station or garage as located and defined, and "the public ways immediately adjoining," and —

"(b) While elsewhere as hereinbefore limited, if caused by proprietors or employees of the assured, as above provided, engaged as such, in the business operations described in saiddeclarations, while in the discharge of their duties inconnection with such operations."

Under the terms of the contract, the declarations are made a part of it. Two of them read: *Page 84

"Classifications of Operations. "1. The ownership, maintenance or operation of any style, type, or make of automobile, tractor, or trailer, for any and all purposes in connection with the business of conducting an automobile sales agency, public garage, or automobile service station as above located, including pleasure use but excluding livery use. The carrying of passengers for a consideration or the renting or hiring of automobiles to others (whether for the carrying of passengers or property) cannot be included in this division but may be covered by proper disclosures in division 2 following.

"The assured is conducting no other business operations at this or any other location not herein disclosed — except as herein stated: no exceptions."

In the business which plaintiff was conducting, as disclosed by its declarations, there was danger that third persons might be injured. Such danger always exists when automobiles, tractors or trailers are being operated. To protect itself against this hazard, plaintiff secured the indemnity provided for in the contract. In order to ascertain whether the accident which happened is within the terms of the liability assumed by defendant, we must examine the contract as a whole. In doing so, we must place such a construction upon uncertain provisions as will be most favorable to the plaintiff. In an effort to arrive at the intention of the parties, we must read the contract in the light of the circumstances under which it was entered into. Ferris v. Wilcox, 51 Mich. 105 (47 Am. Rep. 551);Grieb v. Cole, 60 Mich. 397 (1 Am. St. Rep. 533).

No claim is made by plaintiff that defendant's agent had any knowledge that plaintiff had this motor boat or made use of it for the purpose for which it was being used at the time Mrs. Malloy was injured. Neither is there any sufficient proof of a custom or usage by persons employed in the business then being conducted by plaintiff to maintain and use a motor boat for such a purpose as to charge defendant with *Page 85 notice thereof. Plaintiff's president testified that he knew of but two other agencies who used a boat for such a purpose.Schurr v. Savigny, 85 Mich. 144; Kenyon v. CharlevoixImprovement Co., 135 Mich. 103.

To hold the defendant liable, we must find that the use to which the motor boat was then put was a "work incidental and necessary to the conduct of the automobile sales agency." In its declaration above quoted, plaintiff informed defendant that it was conducting such an agency and was using automobiles, tractors and trailers in its operation. The defendant in the sixth paragraph assumed liability for all injuries sustained if caused by the ownership, maintenance or operation of any such vehicles. Had the words "motor boat" followed "trailers" in the declaration or sixth paragraph, the defendant would have been advised or at least put upon inquiry as to the nature of the work being performed by such a boat in connection with the business being conducted by plaintiff.

"The expression in a contract of one or more things of a class implies the exclusion of all not expressed, although all would have been implied had none been expressed." 9 Cyc. 584 (quoted with approval in Thomson Electric Welding Co. v. WireFence Co., 190 Mich. 496, 502).

The omission of the words "motor boat" would not, however, relieve defendant if, after applying the rule stated, the use of the boat for such a purpose was a "work incidental and necessary to the conduct" of its sales agency. The proofs tend to show that plaintiff's purpose in maintaining and operating the boat was to enhance its sales and secure delivery of cars, and that its business had been benefited thereby. While it is a well known fact that salesmen entertain prospective customers, and that corporations and individuals engaged in certain lines of business extend hospitality to their sales force and to manufacturers *Page 86 from whom they make purchases, with the expectation. of benefit therefrom, the liability under such a contract as we have here cannot be extended to cover accidents occurring while doing so, unless that which is so done is fairly included in the language imposing liability. We are impressed that the act of the president in using this boat for the purpose stated by him at the time of the accident was not a work so "incidental and necessary" to the conduct of plaintiff's business as to bring it within the scope of the liability assumed by defendant under the contract. Had the company owned a private game preserve and invited the persons who were at times its guests on this boat to enjoy its privileges with its president and an accident there occurred, a similar question would be presented. Without more specifically including such accidents in the contract, we are persuaded that liability therefor does not attach.

The judgment rendered should be set aside and one entered for the defendant.

CLARK, C.J., and BIRD, J., concurred with SHARPE, J.