Scottish Court of Session Decisions

On 3rd February 1885 John Scott, timber merchant, Finnieston Sawmills, Glasgow, effected a policy of insurance with the Scottish Accident Insurance Company (Limited), having its registered office at No. 115 George Street, Edinburgh.

The policy contained the following clause—“If the insured shall sustain any bodily injury caused as aforesaid (viz., by violent accidental means) which shall occasion permanent partial disablement (as defined on the back hereof), then the company shall be liable to pay to him the sum of £200 within one calendar month, after satisfactory proof of such disablement shall have been furnished to the directors, and if such injury does not entitle the insured to the compensation for permanent total or permanent partial disablement, as above provided, but shall independently of all other causes immediately and totally disable and prevent him from attending to business of any kind, then compensation shall be paid to him at the rate of £3 per week for the period of such continuous total disablement as shall immediately follow the said accident and injury, or at the rate of 15s. so long as he shall be thereby rendered partially unable to attend to business. But the period during which compensation for total or partial temporary disablement, or both, is to be paid, shall not for any single accident exceed twenty-six consecutive weeks from the date thereof.” And on the back of the policy the following definition was given:—“Notice.—Permanent total disablement implies the loss of both hands or of both feet, or the loss of a hand and a foot. Permanent partial disablement implies the loss of one hand, the loss of one foot, or the complete and irrecoverable loss of sight.” The said policy also contains a provision in the following terms:—“Provided always that this policy shall not extend to, nor cover the death or injury of the insured … arising from natural disease, or weakness, or exhaustion consequent upon disease or any surgical operation

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rendered necessary thereby, or arising from such disease, weakness, exhaustion, or surgical operation, although accelerated by accident.”

On 27th October 1887 an accident befel the insured, in consequence of which he raised an action in June 1888 against the said insurance company, concluding for the sum of £200, with interest at 5 per cent from 30th November 1887.

The parties, inter alia, averred as follows:—“(Cond. 2) On the 27th of October 1887 an accident befel the pursuer, which resulted in his permanent partial disablement. While superintending his men and assisting them in the removal of some ‘log ends’ of wood from one woodyard to another, both of which are situated in Galbraith Street, Finnieston, and belong to him, a ‘log end’ fell upon him by accident in Galbraith Street aforesaid, striking him on the back or shoulders and rolling over his head. By the force of the blow the pursuer was knocked down, had his back and one of his knees seriously injured, and sustained a severe rupture on the left side. A notice of the accident, accompanied by a medical certificate, was sent to the defenders on 31st October 1887. The counter statements are denied, under reference to the proposal for insurance referred to. (Ans. 2) Admitted that an accident happened to the pursuer on 27th October 1887 by a log end falling upon him. Believed to be true that the pursuer was thereby temporarily injured in his back and knees, and explained that a rupture which had formerly existed on the pursuer's left side was thereby considerably increased in size, but he did not suffer the loss of a hand, or of a foot, or of his sight. Further explained and averred, that the said rupture existed for some years prior to the said accident, and that the defenders in issuing the policy to the pursuer were misled by the statement in pursuer's proposal for insurance dated 3d February 1885, to the effect that he had not been ruptured. The proposal form is produced and referred to. The defenders believe that the said statement was made in error, but not with intent to deceive. The notice and certificate are referred to. Quoad ultra denied. (Cond. 3) In consequence of the accident above mentioned the pursuer suffered great pain, and was for several weeks confined to the house, and under constant medical attendance. He still suffers from severe hernia, which is incurable. The pursuer is able to attend partially to the duties of his business, but he is in consequence of the injury to his side permanently incapacitated from performing his ordinary duties connected with his calling, which he was capable of performing prior to the date of the said accident. The pursuer intimated to the defenders that the result of the said accident had been to inflict on him permanent partial disablement, and in respect thereof he claimed compensation in terms of the said contract of insurance. The defenders refused, however, to admit the pursuer's claim, and the present action has thus been rendered necessary. The counter statements are denied. (Ans. 3) Admitted that the pursuer was for several weeks confined to the house in consequence of said accident. Admitted that the pursuer has intimated to the defenders that the result of the said accident had been to inflict on him permanent partial disablement. Quoad ultra denied. Explained that the pursuer is now able to attend to his ordinary business, that he has not suffered permanent partial disablement as defined by the policy, and that the defenders have offered to compensate him under the policy for five weeks total temporary disablement, and for partial temporary disablement for such longer period as the pursuer may have been partially disabled from attending to business, and are still willing to do so, but he refuses all such payment, and demands to be paid as for permanent partial disablement. The hernia or rupture complained of by the pursuer arose from natural disease, and existed previous to the accident in question, although the defenders believe it has been aggravated and its development accelerated by the accident.”

The pursuer pleaded—“(1) The pursuer having, in consequence of the accident in question, suffered permanent partial bodily disablement, is entitled to decree as concluded for, with expenses.”

The defenders pleaded—“(1) The pursuer's averments are not relevant. (2) The pursuer not having suffered permanent partial bodily disablement as defined by the policy, the defenders ought to be assoilzied, with expenses. (3) The pursuer having in his proposal for the policy in question made the statement that he had no rupture, which statement was untrue in fact, and misled the defenders in entering into the said policy, the pursuer is barred from insisting in the present claim, so far as made in respect of an injury arising from said rupture. (4) The injury complained of by the pursuer having arisen from natural disease or weakness, though possibly accelerated by the accident, the defenders are entitled to absolvitor, with expenses.”

Upon 14th November 1888 the Lord Ordinary ( Trayner) sustained the first plea-in-law for the defenders, dismissed the action, and decerned.

“ Opinion.—The pursuer in this action claims payment from the defenders of a sum of £200, which he says is due to him in respect of an insurance effected by him with the defenders. The defenders deny liability on the ground that the injuries suffered by the pursuer, as alleged, are not covered by the policy.

By the policy issued by the defenders they undertake to pay the pursuer the sum of £200 in the event of his sustaining any bodily injury caused by violent, accidental, external, and visible means, ‘which shall occasion permanent partial disablement (as defined on the back hereof).’ On the back of the policy is printed this notice, ‘Permanent partial disablement implies the loss of one hand, the loss of one foot, or the complete and irrecoverable loss of sight.’ If this is regarded as an exhaustive definition of the ‘permanent partial disablement’ of the policy, then this action cannot be maintained, for the injuries sustained by the pursuer do not fall within the definition. But the pursuer contends that what is called a definition is only illustrative; and that while permanent partial disablement implies the specific injuries enumerated, it does not exclude other injuries having the effect of permanent partial disablement. If the word ‘implies’ on the back of the policy is to be regarded etymologically, and apart from the language of the policy itself, I agree with the pursuer. But I cannot so regard it here. The parties, by issuing and accepting the policy

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respectively, have agreed to regard the ‘notice’ on the back of it as a definition; and as a definition covers the whole limits or signification of the thing defined, I must hold that permanent partial disablement in the sense of the policy means, and means only, the special forms of injury enumerated in the so-called definition. I am therefore of opinion that the pursuer has not set forth relevant grounds to sustain an action on the policy in question.”

The pursuer reclaimed, and argued—There was here no exhaustive definition given, but only illustrations to meet cases which might be arguable, e.g., it might be argued that a musician who only used his hands and met with an accident causing the loss of one foot was not permanently partially disabled. This notice said he was to be so regarded. But to say that persons insuring with this company against accidents who might meet with accidents to their hands, their spines, their knee-caps, and so on, could not recover under their policies unless they had lost one hand, or one foot, or where rendered totally blind, was extravagant. No one would insure on such conditions. If that was really intended it should have been made plain beyond possibility of a doubt. Any dubiety or ambiguity must be interpreted in favour of the insured, and against the person issuing the policy according to the maxim, verba sunt interpretanda contra proferentem.

The respondents argued—This notice was a proper definition. It was so referred to in gremio of the policy, for it was the only writing on the back. “Implies” has, according to the best dictionaries, not only the sense of “involving,” but also of “signifying,” “importing,” “denoting,” “meaning.” The pursuer had no cause of complaint. He could not have expected to be insured against all accidents for the small premium he paid. The limitations in the notice were perfectly fair and open. The pursuer was not deprived of all redress, for there were really two contracts in this policy—one for certain payments down, and the other for weekly payments in cases not embraced under the definition. The pursuer here was entitled to so much a week, and had been offered compensation on that footing, but had declined it.

At advising—