Appeal from the Circuit Court of Warren County; the Hon.
Richard C. Ripple, Judge, presiding.
JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:
This appeal lies from an order in declaratory judgment by the circuit court of Warren County finding that the insurance companies involved were not liable for the loss sustained under certain exclusionary clauses in their policies.
The unusual factual situation, which is not controverted by the parties, is as follows. Defendant Larry Enderlin was the owner of a stud bull; he and defendant Rolland Adkisson entered into an oral agreement for the services of the bull to Adkisson's cow herd, the consideration being that Enderlin had the option of buying any calves born to the cows at market price. The record does not disclose the date of the bull's first mission to the Adkisson herd, but it is stated that on October 13, 1980, Adkisson called Enderlin's son to inform him that the mission had not been accomplished as to three cows. It was then agreed that the bull would be returned to the Adkisson farm. Enderlin's son farmed in partnership with him and had authority to make the agreement.
Adkisson then drove his truck to the Enderlin farm and there secured Enderlin's livestock trailer to the truck. Adkisson was accompanied by his son, and they, together with Enderlin's son, loaded the bull onto the trailer. Adkisson closed the trailer's door, but it is admitted that neither he nor his son secured the latch on the door. He then began towing the trailer to his farm, and about a quarter of a mile into the journey he felt the trailer jerk. He looked back and saw the bull lying in the road, having fallen from the trailer through the unlatched door. The bull later died of his injuries.
Enderlin later filed suit in the circuit court of Warren County against Adkisson and recovered a judgment of $14,000 for the loss of the bull.
Adkisson had a general farm liability policy with the plaintiff, Insurance Company of North America (INA), and Enderlin had an automobile policy with Pekin Insurance Company (PIC). INA filed this action to determine coverage under its policy against Adkisson and Enderlin. Enderlin then by a third-party action brought in his insurer, PIC. The trial court concluded after a bench trial on the uncontested facts that the exclusionary clause in each policy was applicable. Enderlin has appealed, and we affirm.
The pertinent clause of the INA policy excluded coverage for:
"Property damage to * * * property occupied or used by the insured or rented to or in the care, custody, or control of the insured or as to which the insured is for any purpose exercising physical control."
The pertinent clause of the PIC policy excluded coverage for:
"Property damage to * * * property rented to or in the care, custody, control of the insured or as to which the insured is for any purposes exercising physical control."
• 1 The trial court found the exclusionary clauses unambiguous. Relying on Country Mutual Insurance Co. v. Waldman Mercantile Co. (1981), 103 Ill. App.3d 39, 430 N.E.2d 606, the court said there is a two-part test to determine whether liability is excluded under such clauses: (1) the property must be within the possessory control of the insured at the time of the loss, and (2) the property must be a necessary element of the work performed. The court found both conditions fulfilled here. We agree.
These clauses appear to be common in one form or another to almost all policies, as found in the reported cases. They are sometimes called "bailment clauses." In Country Mutual, for example, the loss was of merchandise on consignment to the insured. One court has described a reason for the exclusion:
"One purpose is to prevent the general liability insurer from becoming a guarantor of the insured's workmanship in his ordinary operations. Failures of workmanship are a normal business risk which the insured is in the best position to prevent. If such risk be transferred to the insurer via general liability provisions, the cost of general liability coverage will be greater. The `care, custody or control' exclusion is designed to avoid such result." Stewart Warner Corp. v. Burns International Security Services, Inc. (7th Cir. 1975), 527 F.2d 1025, 1030.
Enderlin seeks to distinguish Country Mutual, Stewart-Warner, and other cases which have dealt with the "care, custody and control" clause, by arguing that in all those cases the negligent act and the damage coincided, while in the instant case they were separated. His theory is that the negligent act was the failure to latch the trailer door and that this preceded and was separate from the damage which was the fall and consequent death of the bull. He argues that it is not sufficient that the damage ...