Appeal from the District Court of the United States for the Eastern District of Illinois; Walter C. Lindley, Judge.
Before EVANS, TREANOR, and KERNER, Circuit Judges.
On July 16, 1936 the appellee issued to Barlow Hurst an automobile accident insurance policy, whereby it agreed to insure him against loss for the liability imposed upon him by law for damages on account of bodily injuries accidently suffered by any person by reason of the use of the automobile insured therein.
On October 30, 1936, while the policy was in force, Barlow Hurst, the assured, with the appellant as his agent, drove his automobile from the Whoopee Club in Evansville, Indiana into a tree and telephone pole, thereby severely injuring her. She sued the assured in the Circuit Court of Gibson County, Indiana and recovered a judgment for $10,000. It remains unpaid and in full force and effect. The present suit is an action upon the policy of insurance.
The complaint as amended alleged that on October 30, 1936 Barlow Hurst was driving his automobile on a public street in Evansville, Indiana, with appellant as his invited guest; that with reckless disregard of the rights of appellant he recklessly drove said automobile into a telephone pole and tree and that by reason of his said reckless act and conduct, appellant sustaiend severe injuries; that immediately after the injury to appellant, said assured gave notice to the appellee of said accident, whereupon appellee investigated the facts and, with full knowledge of the facts surrounding the accident, undertook and did direct and control the defense in said cause.
The complaint further alleged that at the time of issuance to the assured of the policy by appellee there was in force and effect in the State of Indiana a Motor Vehicle Financial Responsibility Law.*fn1 There was annexed to the complaint a copy of the policy and certain sections of the Motor Vehicle Financial Responsibility Law.
The appellee filed an answer denying liability on the ground that the conduct of the assured in driving his automobile and in injuring the appellant was "willful and wanton, or intentional," alleged that the claimed liability of the assured to appellant was based upon the guest statute of the State of Indiana*fn2 which provides that such a guest shall have no cause of action unless the injury shall have been intentional or caused by the "reckless disregard of the rights of others," and that the policy sued on expressly exempted from its coverage any liability occasioned or caused by the "willful and wanton, or intentional" act of the assured. Appellee moved to dismiss the complaint, the motion was susained, the complaint was dismissed, judgment was entered against appellant in bar of the action and for costs, and appellant appeals.
By the policy the insurance company expressly agreed to pay on behalf of the assured the actual loss imposed upon the assured by law for legal liability arising or resulting from claims on account of bodily injury accidentally suffered by any person caused by an accident arising out of the use of the automobile insured therein. It was, however, subject to the condition that the insurance company would not be liable for damage "occasioned or caused by the willful and wanton, or intentional acts of the assured."
The only question calling for a solution on this appeal is one of law, the sufficiency of the complaint.
At the outset we are met with the contention that the provisions of the policy are ambiguous. The contention is this: Because one clause of the policy indemnifies the assured against loss imposed upon him by law for legal liability resulting from claims on account of bodily injury accidentally suffered by any person caused by an accident arising out of the use of his automobile, another clause exempts the appellee from liability for accidents occasioned or caused by the "willful and wanton, or intentional" acts of the assured, and still another that the policy shall conform to the provisions of the "motor vehicle financial responsibility law of any state with respect to any liability arising from the use of the automobile," which provides "that the liability of the insurance company shall become absolute whenever damage covered by such policy occurs," the contract is ambiguous.
It is true that the established rule is that insurance contracts should be liberally construed in favor of the insured, and equivocal expressions in the policy whereby the insurer seeks to narrow the range of its liability or renounce the liability purported to be assumed are to be construed most strongly against the insurer, Midwest Dairy Products Corp. v. Ohio Ins. Co., 356 Ill. 389, 190 N.E. 702; Aschenbrenner v. United States Fidelity & Guaranty Casualty Co., 292 U.S. 80, 54 S. Ct. 590, 78 L. Ed. 1137; Manufacturer's Acc. Inc. Co. v. Dorgan, 6 Cir., 58 F. 945, 22 L.R.A. 620, and where any reasonable construction can be placed on a policy that will prevent the defeat of the insured's indemnification for a loss covered by general language, that construction will be given, Terwilliger v. National Masonic Acc. Ass'n, 197 Ill. 9, 63 N.E. 1034; Masonic, etc., Co. v. Jackson, 200 Ind. 472, 164 N.E. 628, 61 A.L.R. 840, because the words are those of the insurer and the ambiguity is chargeable to it. When, however, there is no ambiguity in the terms, neither party is to be favored, Norwaysz v. Thuringia Ins. Co., 204 Ill. 334, 68 N.E. 551, and if the contract is one that the parties could lawfully make, it is the duty of the court to enforce it as the parties made it. Norwaysz' Case, supra, 204 Ill. at page 342, 68 N.E. 551; Schneider v. Autoist Mutual Ins. Co., 346 Ill. 137, 178 N.E. 466. In the instant case the contract was one the parties could lawfully make.Micca v. Wisconsin Nat. Life Ins. Co., 7 Cir., 75 F.2d 710, certiorari denied, 296 U.S. 580, 56 S. Ct. 90, 80 L. Ed. 410; Landau v. Travelers' Inc. Co., 315 Mo. 760, 287 S.W. 346; and Universal Indemnity Ins. Co. v. North Shore Delivery Co., 7 Cir., 100 F.2d 618.
We now consider appellant's contention that the phrase "willful and wanton" is ambiguous.
When a guest sues on the host's automobile liability insurance policy, as does the appellant here, the guest must stand or fall on the policy. Defenses available against the assured are available against the injured party, and the latter can ...