Appeal from the Circuit Court of Lake County; the Hon. THOMAS
J. MORAN, Judge, presiding. Affirmed.
Rehearing denied June 8, 1966.
This is an appeal from a judgment entered in a declaratory judgment action finding that defendant Standard Accident Insurance Company must defend plaintiff Frank M. Pierce, d/b/a Pierce Boat Service and also pay any judgment entered against him in a pending lawsuit arising from the theft of a boat, trailer and motor from the yard of the business establishment operated by plaintiff, Frank M. Pierce. On appeal in this court, defendant complains that the occurrence (involving the theft of a trailer which was being repaired by plaintiff) was not covered by the policy of insurance, on the basis that (1) it involved the theft of a trailer licensed for highway use and of property, while unattended, on that trailer being items specifically excluded from coverage by the policy, and, (2) that plaintiff is barred from bringing his suit because he failed to comply with policy provisions requiring commencement of any action on the policy within 12 months from the inception of the loss.
The facts in the record disclose that plaintiff Frank M. Pierce was in the business of selling and servicing boats and boat supplies under the name of Pierce Boat Service. Before plaintiff made application for a commercial endorsement on a fire insurance policy, an agent of the company had made a preliminary investigation of the premises and of the business and had checked the stock, the locks on the doors, the premises outside of the building, including the property lines, and noted that both boats and trailers were outside of the building. At the time of the examination, there were approximately 6 or 8 trailers, most of them with boats on them, and approximately 25 boats on the premises outside of the building itself. The investigator made no comment with reference to the boats or trailers outside the building on the premises but stated that he would approve the policy and would issue it. The policy was issued to plaintiff which consisted of a Commercial Property non-reporting endorsement on the Standard fire and extended coverage insurance policy issued to plaintiff.
On July 28, 1959, one Richard Burt delivered to plaintiff a boat, motor and trailer owned by Burt so that plaintiff could make certain repairs on the boat which was 17 feet long. Some work remained to be done on the boat on said date and plaintiff closed his shop at 10:30 p.m. At that time the trailer with the boat and motor on it was parked outside of the building on the insured premises. After that time no one remained on the premises to watch the boat. During the night, as shown by the record, the boat and trailer were stolen and, apparently, had been hooked onto an automobile by the thieves who drove the entire trailer and boat away. Neither trailer nor boat were recovered thereafter.
Plaintiff filed his claim for loss by theft with the defendant company. Such claim was refused by defendant on September 15, 1959, on the ground that the loss was not within the terms of the policy. On January 21, 1960, Richard Burt, the owner of the boat filed a suit against plaintiff for damages, which action is still pending and undisposed of in the Circuit Court of Lake County, Illinois. Thereafter plaintiff requested that defendant defend the suit brought against him under the terms of the policy of insurance, but defendant refused to defend on the ground that plaintiff was not covered by the policy. On January 24, 1961, plaintiff filed an action for declaratory judgment against defendant and as a result of such action the trial court found that under its policy the Standard Accident Insurance Company was obligated to defend the suit brought against plaintiff by the owner of the boat, and trailer, and also to pay any judgment assessed against Pierce in that suit within the limits of the policy.
The portions of the policy with which we are principally concerned provide under a section relating to exclusions and limitations:
"This policy does not cover: 3. Automobiles, motor trucks, trailers, and similar vehicles licensed for highway use or held for sale . . .
"C. (Peril) This policy does not insure against any loss caused by or resulting from:
"8. Theft (including attempt thereat) of property while unattended in or on any motor vehicle or trailer, unless contained in a fully enclosed and securely locked body or compartment of such vehicle and theft results from forcible entry, evidenced by visible marks, into the body or compartment but this exclusion shall not apply to property in the custody of carriers or bailees for hire;"
Also in lines 157-161 of the Standard Fire Policy there is the following provision:
"No suit or action on this policy for recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within 12 months next after inception of the loss."
It is noted that the policy under consideration specifically covers "all risks of direct physical loss of or to the property covered." The property covered was described as "stock of goods, wares and merchandise of every description, consisting principally of BOAT AND MARINE SUPPLIES." It expressly included property of others within the description which was left with the insured for storage or repairs. It is apparent that the exclusionary clauses were designed to cover items taken from vehicles, and not the taking of the entire vehicle and its contents. It can hardly be rationalized that the boat involved, which was 17 feet long with its motor and trailer, should be in a "fully enclosed and securely locked body or compartment of such vehicle." Also, for the theft to fall within the exclusion it had to result from "forcible entry evidenced by visible marks, into the body or compartment." The trailer upon which the boat and motor rested had neither a body nor a compartment. There could hardly be visible marks on a nonexistent body or compartment. It was a typical trailer of the kind seen by the investigator on plaintiff's premises. The investigation by defendant prior to the writing of the policy was made for the purpose of affording coverage to plaintiff's business and property of the type involved in the cause before us was located on the premises of the insured.
In Sally Chain Stores, Inc. v. Ace Bonded Carriers, Inc., 307 Ill. App. 644, 30 N.E.2d 966, there was an exclusionary clause which was similar to the one now before this court. In that case, the delivery vehicle was stolen with the packages in it. The vehicle was later recovered but ...