Case Title: Monarch Insurance Company of Ohio v. Cook

Citation: 336 So. 2d 738

Docket Number: 

State: mississippi

Court: Mississippi Supreme Court

Date: 1976-08-17T00:00:00Z

Document:
336 So. 2d 738 (1976) MONARCH INSURANCE COMPANY OF OHIO v. Grady COOK, Jr. No. 48731. Supreme Court of Mississippi. August 17, 1976. *739 Mize, Thompson & Blass, Gulfport, Joseph P. Tynan, New Orleans, La., for appellant. Page, Mannino & Peresich, Biloxi, for appellee. Before PATTERSON, P.J., and ROBERTSON and BROOM, JJ. ROBERTSON, Justice, for the Court: Monarch Insurance Company of Ohio, a non-resident corporation, insurer of Biloxi Machine Works, Inc., appeals from a judgment for $64,015 rendered against it, and in favor of Grady Cook, Jr., by the Circuit Court of Harrison County on a writ of garnishment suggested by Cook. Cook first brought suit against Biloxi Machine Works, Inc., a Mississippi corporation, for the loss of his tugboat "Capt. Bull" which sank while being operated on a test run by Biloxi Machine Works, Inc., the contract repairer. This first suit resulted in a judgment for Cook rendered on May 10, 1973, and the writ of garnishment was based on this judgment against Monarch's insured. Monarch interposed three affirmative defenses: First, the insurer was not given notice by the insured "of any legal proceeding being filed against it and further failed, after being served with process, to forward a copy of the Summons to the Garnishee Defendant, and by such actions did thereby relieve any duty of the Garnishee" to defend or indemnify the insured under the policy. In support of this defense, Monarch quoted paragraph 7 of the policy: Second, the insured "had removed its vessel to Fletcher's Shipyard in Pascagoula, Mississippi, ... and by removal in excess of fifteen (15) miles violated the terms of the policy." Monarch quoted Paragraph 1A of the policy: Third, James Garland, president of the insured, Biloxi Machine Works, Inc., "did violate the provisions of Paragraph 8 of the attached insurance policy" by admitting liability for the alleged accident out of which the claim of Grady Cook, Jr. arose. Paragraph 8 provides: The circuit judge in his written opinion said: The circuit judge in his written opinion found: The circuit judge thus found that actual notice of the occurrence and claim were repeatedly given to Monarch, and that actual notice of the filing of suit was given. Moreover, the Court found that Monarch had in effect denied coverage and thus waived any further notice of the filing of suit. The lower court was correct in finding against Monarch on its first affirmative defense for these reasons: The second affirmative defense was that the tugboat was moved more than 15 miles and thereby Paragraph 1A of the policy was violated. Where an insurance contract is susceptible of two reasonable interpretations, the one will be adopted which sustains the claim for indemnity. If the language of the policy is ambiguous it should be construed more strongly in favor of the insured. In addition, the policy terms must be construed in the light of the purposes and hazards against which it was designed to protect. Griffin v. Maryland Casualty Company, 213 Miss. 624, 57 So. 2d 486 (1952). Paragraph 1A would seem to cover two types of risks which are separated by the disjunctive participle "or". 1A assumes the risk of "the legal liability of the Assured as ship repairers for loss or damage to vessels ... and other interests on board," Clearly at the time of the sinking, the insured was within the terms of the first alternative of paragraph 1A of the policy. The "Capt. Bull" was in the care, custody and control of the insured's president, Garland. He was acting as master of the vessel while two of his employees were acting as the crew. The proof shows that the vessel had been placed in insured's possession for extensive repairs. Repairs were actually being performed by Garland, who was in the engine room attempting to remedy a vibration at the time of the sinking. Also, clearly, the repairs were being performed *742 at a location within the United States. The circuit court concluded: This Court agrees with this conclusion. It is abundantly supported by both the evidence and the law. In answer to the third affirmative defense, suffice it to say that no collusion or fraud between plaintiff Cook and defendant Biloxi Machine Works was charged, nor was any evidence of collusion or fraud adduced. The coperation clause of the policy does not require the insured to falsify any of the facts or put up a sham defense. The findings of fact and conclusions of law of the lower court are amply supported by the evidence, and its judgment should be affirmed. AFFIRMED. GILLESPIE, C.J., PATTERSON and INZER, P. JJ., and SMITH, SUGG, WALKER, BROOM and LEE, JJ., concur.