Court Opinion

ID: 9584598
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:50:33.945098+00
Date Added: 2024-06-11T15:09:42.783463
License: Public Domain

On Defendant’s Motion for Rehearing.
Hall, Judge.
Gulf contends that plaintiff is prevented from recovering as subrogee in this case by an express agreement by which Gulf required Harper to- procure, and maintain insurance acceptable to Gulf. In its pleadings Gulf alleged that Harper “was required under the terms of an agreement with defendant, dated December 11, 1958, to carry at all times, at his own expense, comprehensive, fire and theft insurance in an amount equal to the full value of all of the merchandise with loss payable to defendant with an insurer or insurers acceptable to defendant; that said agreement provided further that said merchandise shall be at the risk and expense of Harper in respect to loss, destruction or damage, . . .”
Gulf cites American Fidelity & Cas. Co. v. Simmons, 253 F2d 634 (4th Cir. 1958), as authority that Harper’s agreement to insure the property prevents plaintiff’s subrogation against Gulf. In that case the owner leased its- truck and furnished a driver to an interstate carrier. The carrier procured public liability insurance, as it had agreed to do in the. lease contract, and the carrier’s insurer paid a negligence claim asserted against the carrier. The insurer as subrogee sued the owner for the amount of the claim paid. The court construed the lease contract, by which the carrier undertook to procure liability insurance, to mean that the carrier agreed to protect both itself and the owner against liability and that the carrier thereby gave up its right to recover from the owner who would otherwise have been primarily liable for damages caused by the operation of the truck. The court denied recovery to the insurer because its rights as subrogee could not be superior to those of the carrier.
In U. S. Fire Ins. Co. v. Phil-Mar Corp., 166 Ohio St. 85 (139 NE 2d 330), a lease, interpreted as a whole, was held to relieve the lessee of liability to the lessor for fire caused by lessee’s negligence; hence the lessor’s insurer was -denied recovery against the lessee because it had no greater right than the lessor. *394There was a similar holding in Fry v. Jordan Auto Company, 224 Miss. 51 (80 S2d 53); but the court denied recovery on the ground that the proof was insufficient to show the lessee was negligent.
In the Simmons case, the subject of the agreement was insurance against negligence and the party primarily liable was released from liability to the insured. The agreement to insure pleaded in the present case is not comparable. We are not persuaded by the cases discussed above nor by New York Title & Mortgage Co. v. First National Bank of Kansas City, 51 F2d 485 (8th Cir. 1931), that the decision we have rendered is wrong. Even if We look beyond the alleged agreement requiring Harper to insure, we find no analogy to the cases cited by defendant, in which the agreement by the insured to procure insurance relieved another from liability to the insured, as in the present case Gulf was not relieved of liability to Harper for the negligence sued upon, by either the alleged agreement to insure or the exculpatory clause of the lease.
This court did not invent the distinction between an “open” loss payable clause and a standard mortgage clause. It has long been recognized in this jurisdiction and elsewhere. Gulf presumably was aware of the distinction at the time of all its transactions with Harper. Indeed it recognized that the policy sub judice contained “an open mortgage clause rather than a union or standard mortgage clause” in its original brief filed in this court. If Gulf required Harper to insure the property, it could have required precisely a policy under the terms of which it would have been an insured and could have made the transaction conditional on its approval of the terms of the policy.
Likewise Gulf, if it intended to enlarge the usual scope of exculpatory clauses in leases, could have spelled out specifically and exactly the liabilities from which it intended to relieve itself by the exculpatory clause. Gulf contends that by the first sentence and the first portion (preceding the first comma) of the second sentence quoted from the lease in Division 2 of the opinion, it had already relieved itself from liability arising out of its duties as landlord, and then by the remainder of the exculpatory clause it relieved itself of all other liability; and *395that therefore, having first dealt with its liability as landlord, the only thing that could be meant by the succeeding language is negligence not arising from the lease relation. While insisting in its motion that the court should determine the intent of a contract by construing it as a whole, Gulf argues that we must construe two parts of the same sentence separately to arrive at the meaning of the exculpatory clause. We are not convinced by this argument.
Neither is the fact that the leased premises were located within the Gulf Plant sufficient to make the contract clearly and explicitly say that Gulf is relieved of liability for damage to Harper caused by Gulf’s negligence in its bulk plant operations. The lease describes the premises as being 1,800 sq. ft. in a garage building located in “a- tract of land known as Gulf Oil Corporation’s Columbus, Ga. Bulk Plant on Sixty Ave.,” and more particularly describes the leased space by reference to a layout plat of Gulf Oil Corporation. We adhere to our opinion that the exculpatory clause, construed in context with the. entire’ lease, did not relieve Gulf from liability to Harper for property damage caused by negligence arising without regard to the lease relationship.
Gulf differs with the grammatical construction given by this court to the exculpatory clause. Though the court’s construction is valid, the opinion is complete and supports the decision without the reason based on grammar.

Motion for rehearing denied.

Felton} C. J., and Bell, J., concur.