Court Opinion

ID: 9884634
Source: CourtListenerOpinion
Date Created: 2023-10-06 03:04:39.251242+00
Date Added: 2024-06-11T07:40:03.901932
License: Public Domain

Mr. Justice Schaefer concurring in part and dissenting in part: I concur in the opinion of the court with respect to its. disposition of the actions against Union Wire Rope Corporation and Archer Iron Works, but I dissent from its disposition of the action against American Mutual Liability Insurance Company. As the opinion of the appellate court pointed out, (39 Ill. App. 2d at 125, 187 N.E.2d at 449) the evidence in this case did not establish that either the contractor or'the plaintiffs relied upon the inspections made by the defendaht. The opinion of this court eliminates this obstacle to recovery by dispensing with the necessity for any element of reliance, holding that the plaintiffs may recover without proof that anyone relied upon the defendant to inspect the hoist. The result is that an insurer who makes supplemental inspections, designed to minimize potential losses by diminishing the likelihood of injury, is penalized by the imposition of full responsbility for all losses that might have been revealed by the most complete inspection, even though no one concerned relied upon the insurance company for complete inspection. The opinion thus apparently announces a kind of “all or nothing” rule of law that will frustrate the possibility of limited inspection services by requiring that if any inspections are undertaken, complete inspections must be made. In the absence of proof of reliance, or of what may be the same thing, proof that the defendant caused the contractor to refrain from performing its duty to inspect, I would not hold that because the insurance company made a partial inspection of the hoist it is liable for failing to discover and disclose that which a complete inspection should have revealed. The three cases so heavily relied upon in the opinion of the court, “the Smith, Pabst and Van Winkle cases,” did not, as I read them, impose such a rule of law. They appear rather to have measured the scope of the duty imposed by the scope of the undertaking assumed, or reasonably thought by others to have been assumed. The opinion repeatedly quotes from the earliest of them, Van Winkle v. American Steam-Boiler Ins. Co. 52 N.J.L. 240, 19 Alt. 472 (1890), the expression that the duty arose “as soon as it (the'defendant) took part, practically, in the management of this machine.” This quotation needs amplification. The conduct that was referred to “as taking part, practically, in the management of the machine,” involved inspections of the boiler and the furnishing “for the guidance of the engineer of the assured,” of certificates defining the load that could be put on the safety valve. “What this defendant did was this: It cooperated with the owner of this dangerous instrument in a particular indispensable to its safe use, and it thereby in that degree constituted itself the agent or the substitute of such owner.” (19 Atl. at 474.) There was no comparable “substitution” in the present case. In Hartford Steam Boiler Inspection & Ins. Co. v. Pabst Brewing Co., 201 Fed. 617, 628-9 (C.C.A. 7, 1912) the circuit court of appeals stated: “The law casts upon the owner of the boilers when in use, as instrumentalities of danger, the duty to inspect and care for their safety, for protection of the public; and, of course, the owner may delegate the inspection and care to competent employees or other agency (or both) remaining answerable for their negligent performance. As foundation for the present charge of liability, however, it is contended that the duty of inspection was assumed by the Insurance Company, as an undertaking outside the insurance contract and its purposes, to relieve the Brewing Company of performance thereof, and all inspections were 'So made and relied upon for safety in use of the boiler up to the time of the explosion. Thus the question arises: Can liability be so predicated, at the side of the insurance contract, and without other consideration, for alleged negligent inspection ? * * * We are of opinion that these-facts of continuous conduct on the part of the Insurance Company in reference to the inspections and their purpose — if relied upon by the Brewing Company and so understood by the Insurance Company, as alleged — are of probative force to show both the undertaking of duty and relation of the parties upon which the action for negligence in performance thereof may be predicated.” (Emphasis supplied.) In the case before us there was no reliance, nor was there any indication that the activities of the insurance company were to relieve the contractor of its duty to inspect. The three to two decision of the Supreme Court of New. Hampshire in Smith v. American Employers Insurance Co., 102 N.H. 530, 163 A. 2d 564, comes closer to the present case. ■ But that case arose upon a motion to dismiss, and as the “essential allegations” of the plaintiff's complaint, which are referred to in the opinion on rehearing, are not set forth in the opinions of the New Hampshire court, or with clarity in the record of the case insofar as the researches of the parties before us have disclosed, it is difficult to appraise its actual significance. The decision of this court can not therefore be said to be dictated by precedent, and as a matter of policy I think that it is unsound. When there has been reliance, or when the insurer has taken over the inspection duties of another, there should be liability. But in the absence of those circumstances, I am unable to see any sound reason for imposing liability.