Damen & Jarvis Bldg. Corp. v. Mechanics' Ins.

EVANS, Circuit Judge

(dissenting).

I am unable to agree with the majority opinion for several reasons:

(a) The weight of judicial opinion, including the holdings of the Illinois courts, is apparently with appellant. Hartford Fire Ins. Co. v. Stephens, 18 Ariz. 339, 161 P. 684; German Union Fire Ins. Co. v. Fred G. Clarke Co., 116 Md. 622, 82 A. 974, 39 L.R.A.(N.S.) 829, Ann.Cas.l913D, 488; Brown v. Prudential Fire & Marine Ins. Co. (Mo.App.) 24 S.W.(2d) 206; Nitsch v. American Central Ins. Co., 152 N.Y. 635, 46 N.E. 1149; Tisdell v. New Hampshire Fire Ins. Co., 155 N.Y. 163, 49 N.E. 664, 40 L.R.A. 765; Buckley v. Citizens’ Ins. Co., 188 N.Y. 399, 81 N.E. 165, 13 L.R.A.(N.S.) 889; Peterson v. Hartford Fire Ins. Co., 87 Ill.App. 567; Hartford Fire Ins. Co. v. Peterson, 187 Ill. 395, 58 N.E. 1095; National Hotel Co. v. Merchants’ Fire Assur. Co., 183 Ill.App. 71; Annes v. Carolan, etc., Inc., 336 Ill. 542, 168 N.E. 637.

*796(b) The law of Illinois as declared by the courts of that state governs the disposition of this case. Mutual Life Ins. Co. v. Johnson, 293 U.S. 335, 55 S.Ct. 154, 79 L.Ed. 398; Marine Nat. Exchange Bank v. Kalt-Zimmers Mfg. Co., 293 U.S. 357, 55 S.Ct. 226, 79 L.Ed. 427; Graham v. White-Phillips Co., 296 U.S. 27, 56 S.Ct. 21, 80 L.Ed. -, 102 A.L.R. 24; Georgia Railway & Elec. Co. v. City of Decatur, 56 S.Ct. 606, 80 L.Ed. - decided March 30, 1936. The Illinois decisions, it seems to me, adopt appellant’s construction of the provision of the contract in dispute. (See cases cited under (a).

(c) Where there is uncertainty of meaning or effect of language of an insurance contract, it should be construed against the insurance company. See 14 R. C.L., “Insurance,” § 103, and the many cases there cited; Aschenbrenner v. United States F. & G. Co., 292 U.S. 80, 54 S.Ct. 590, 78 L.Ed. 1137; Stipcich v. Metropolitan Life Ins. Co., 277 U.S. 311, 48 S.Ct. 512, 72 L.Ed. 895. That this language is not free from doubt but capable of two constructions is shown by the fact that the courts have differed as to its meaning. By its adoption of such language in its policy, the company has knowingly used ambiguous language, in which case the contract should be construed and the ambiguity resolved against it. Fidelity & Casualty Co. v. Lowenstein, 97 F. 17, 46 L.R.A. 450 (C.C.A.8); Davis & Rankin Bldg., etc., Co. v. Jones (C.C.A.) 6.6 F. 124; Schmohl v. Travelers’ Ins. Co. (Mo.App.) 177 S.W. 1108.

When the language of a clause in an insurance policy is construed differently by different appellate courts, it cannot be said to be unambiguous or free from doubt.

(d) There is no Federal rule as distinguished from state court rule on any subject matter wherein the Federal courts follows the state court’s decisions.

Federal courts ordinarily follow the holdings of the state courts which have construed certain clauses of fire insurance found in standard contracts written pursuant to command of state statutes. They will accord great, if not controlling weight, to state court decisions which • construe contracts containing a common provision which has been frequently before the state courts. Mutual Life Insurance Co. v. Johnson, 293 U.S. 335, 55 S.Ct. 154, 79 L.Ed. 398.

Use of language in a cancellation clause of an Illinois fire insurance policy should be given the effect which the Illinois courts have given to it prior to the date of the issuance of a policy containing such clause.

I believe the judgment should be reversed.