Court Opinion

ID: 9697899
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:36:39.639616+00
Date Added: 2024-06-11T18:20:36.833959
License: Public Domain

Dissenting Opinion by
Mr. Justice Bell :
I differ with the majority, not on the law, but on its application to the facts in this case.
Plaintiffs brought six separate suits to recover on six fire insurance policies dated October 1, 1953, each of which covered “stock of lumber and builder’s supplies in open yards and sheds* at rear of the assured’s warehouse and along railroad siding . . .” The suits involved exactly the same question and were tried to*41getlier. The jury returned a verdict in favor of plaintiffs in the total sum of $39,517.11.
The policies dated October 1,1953 were renewal policies — the original policies, which were identical, were dated October 1, 1951 and ran for a period of one year. The parties based their arguments and the Court has based its decision upon the intention of the parties as disclosed in the original policies. The most important question that arises is whether or not the policies covered the lumber and builder’s supplies in the open subbasement rooms or stalls of the warehouse; in other words, whether these open rooms or stalls in the subbasement were “sheds” within the meaning of the insurance policies.
The insurance policies on their face appear clear and unambiguous. The word “sheds” ordinarily would not include rooms or stalls in the sub-basement of a warehouse. Nevertheless, plaintiffs introduced a wide variety of parol evidence in an attempt to prove that the word “sheds” was intended to include the aforesaid rooms or stalls. This oral evidence was introduced under two theories, (1) that a latent ambiguity existed in the policies, and (2) that the policies should be reformed after the fire to include the basement and the rooms or stalls in the sub-basement because of fraud, accident or mistake.
Parol evidence is admissible to explain, clarify, interpret and resolve a latent ambiguity,* i.e., an ambigu*42ity which arises from extrinsic or collateral facts and circumstances which make the meaning uncertain even though the language of the instrument be clear and unambiguous : Logan v. Wiley, 357 Pa. 547, 55 A. 2d 366; Gerety Estate, 354 Pa. 14, 16, 46 A. 2d 250; Metzger Estate, 222 Pa. 276, 71 A. 96; Lycoming Mutual Insurance Co. v. Sailer, 67 Pa. 108; Beatty v. Lycoming County Insurance Co., 52 Pa. 456; Koplin v. Franklin Eire Insurance Co., 158 Pa. Superior Ct. 301, 44 A. 2d 877; 32 C.J.S. Evidence, §961 (b)(1); Henry, Pennsylvania Evidence, 4th Ed. Vol. 2, §599. See also Barium Steel Corp. v. Wiley, 379 Pa. 38, 44, 108 A. 2d 336; Albert v. Schenley Auto Sales, Inc., 375 Pa. 512, 100 A. 2d 605; Waldman v. Shoemaker, 367 Pa. 587, 80 A. 2d 776; Security Trust Co. of Pottstown v. Stapp, 332 Pa. 9, 13, 1 A. 2d 236; Kittanning Coal Co. v. Moore, 362 Pa. 128, 66 A. 2d 273.
An insurance policy will be construed most strongly against the insurer who prepared it: Blue Anchor Overall Co. v. Pennsylvania Lumberman’s Mutual Ins. Co., 385 Pa. 394, 123 A. 2d 413; Beley v. Pa. Mutual Life Ins. Co., 373 Pa. 231, 95 A. 2d 202; MacDonald v. Metropolitan Life Ins. Co., 304 Pa. 213, 155 A. 491; Howley v. Scranton Life Ins. Co., 357 Pa. 243, 53 A. 2d 613; West v. McMillan, 301 Pa. 344, 152 A. 104.
“ ‘ “The cardinal rule in the interpretation of contracts is to ascertain the intention of the parties and to give effect to that intention if it can be done consistently with legal principles.” [citing cases] “Contracts must receive a reasonable interpretation, according to the intention of the parties ... if that intention can be ascertained from their language.” ’ Brown v. Raub, 357 Pa. 271, 287, 54 A. 2d 35.
*43“ ‘ “. . . in order to ascertain that intention, the court may take into consideration the surrounding circumstances, the situation of the parties, the objects they apparently have in view, and the nature of the subject-matter of the agreement”: Slonaker v. P. G. Publishing Co., 338 Pa. 292, 296, 13 A. 2d 48, 50, 51.’ Hindman v. Farren, 353 Pa. 33, 35, 44 A. 2d 241.”: Betterman v. American Stores Co., 367 Pa. 193, 80 A. 2d 66.
With these principles in mind, we shall briefly review the evidence presented. In order to shoAV that the word “sheds” was not used in or intended to have its ordinary meaning, plaintiffs proved that there was only one shed in the open yard namely, a fir gutter shed, at the time the first insurance policies were executed on October 1, 1951, and during the entire year ivhen the policies were in effect. From this fact, plaintiffs contend that the Avord “sheds” being in the plural, necessarily must have been intended to include the four separate open sub-basement rooms or stalls.
Plaintiffs, to further support their construction, proved that at the time the fire insurance policies were issued in 1951 in the sum of $60,000, (a) the lumber stored at the railroad siding had a fair market value of $15,000, (b) the lumber and materials in the gutter shed was of little value and (c) the lumber stored in the open sub-basement rooms or stalls had a fair market value of $45,000 — a total of $60,000. Although plaintiffs are suing on policies taken out in October 1953 Avhen additional sheds had been erected in the open yards (commencing in March 1952), they contend that they Avould not have taken out $60,000 Avortlr of fire insurance in 1951 to cover $15,000. worth of lumber at the railroad siding and in the fir gutter shed unless they and Young, Avho Avas the authorized agent of the insurance companies and Avho saw the premises,, intended the insurance in those policies to cover-4he *44lumber and building materials stored in the sub-basement open rooms or stalls in the warehouse.*
Whether the aforesaid parol evidence of extrinsic facts and circumstances was legally sufficient to create a latent ambiguity was, in the first instance, a matter of law for the Court. If the Court decided that the evidence was legally sufficient to create a latent ambiguity, then the question of what the parties intended by the language used in the contract — taking into consideration the extrinsic facts and circumstances — was a question to be determined by the jury. Cf. Titusville Trust Co. v. Johnson, 375 Pa. 493, 100 A. 2d 93; Gerfin v. Colonial Smelting and Refining Co., Inc., 374 Pa. 66, 97 A. 2d 71; Wagner v. Somerset County Memorial Park, 372 Pa. 338, 93 A. 2d 440; Waldman v. Shoemaker, 367 Pa. 587, 80 A. 2d 776; Corn v. Wilson, 365 Pa. 355, 75 A. 2d 530; Stafford v. Reed, 363 Pa. 405, 70 A. 2d 345; Brandolini v. Grand Lodge of Pa., 358 Pa. 303, 56 A. 2d 662; Aliquippa National Bank v. Harvey, 340 Pa. 223, 16 A. 2d 409. See also University City, Mo. v. Home Fire and Marine Insurance Co., 114 F. 2d 288; East and West Insurance Co. of New Haven, Conn. v. Fidel, 49 F. 2d 35; Queen Insurance Co. of America v. Meyer Milling Co., 43 F. 2d 885.
Considering the unusual extrinsic facts which are present in this case and all the surrounding circumstances, including the unusual open rooms or stalls in which the lumber was stored, I believe (1) that there was a latent ambiguity in these insurance policies, (2) that parol evidence was admissible to clarify, interpret *45and resolve the ambiguity, and (3) that the construction of the insurance policies in the light of all the evidence and under proper instructions from the Court was a question of fact to be determined by the jury.

 Italics throughout, ours.

 When the language of a written instrument is equivocal or obscure or ambiguous, an ambiguity arises which is usually referred to as a latent ambiguity rather than a patent ambiguity, although the cases are not clear as to what is a latent and what is a patent ambiguity. In such a case, parol evidence is admissible to explain, clarify, interpret and resolve the ambiguity. Cf. Logan v. Wiley, 357 Pa., supra; Beisgen Estate, 387 Pa. 425, 431, 128 A. 2d 52; *42Morgan v. Phillips, 385 Pa. 9, 14, 122 A. 2d 73, and numerous cases cited therein.

 The majority’s assumption that plaintiffs took out $60,000 of fire insurance to cover $15,000 worth of lumber because of possible or contemplated increase of lumber in additional or future built sheds might be persuasive if additional sheds had been built by plaintiffs during the period (one year) covered by the insurance policies. ....