
    Jacob Paskusz and Gasa Paskusz, Copartners, Composing the Firm of J. Paskusz & Son, Respondents, v. The Philadelphia Casualty Company, Appellant.
    First Department,
    November 3, 1911.
    Insurance — credit insurance — rating customers — when policy does not cover loss — contract — construction — substitution of “ or ” for “ and.”
    Where a credit insurance policy provided that the policy covered risks as to old customers of the indemnified, “possessing one of the capital- and credit ratings as specified” in an annexed schedule, there can be no recovery for a loss occasioned through an old customer who under the schedule was rated only as to credit and not as to capital.
    While the court in order' to carry into effect the evident intention of parties may substitute the word “or” for the word “and,” or rice versa, there must be something to indicate clearly that such was the meaning of the parties. Such substitution of words cannot be made in the policy aforesaid as the change would in effect make a new contract for the parties.
    Nor can the indemnified recover under such policy for a loss occasioned by a customer which was less than the initial loss stipulated'by the policy. '
    Appeal by the defendant, The Philadelphia Casualty Company, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 23d day of January, 1911, upon the decision of the court rendered after a trial at the New York Trial Term, a jury having been waived.
    
      Frank H. Platt, for the appellant.
    
      Edward Petigor, for the respondents.
   Scott, J.:

Defendant appeals from a judgment rendered by the court without a jury.

The action is upon a credit insurance bond or policy. The plaintiff seeks to recover two losses occasioned by the bankruptcy of one Annie Scheinberg, who owed plaintiff $4,990.82, and by the failure of the Sanders Manufacturing Company, which owed plaintiff $195.30. The controversy is as to the Scheinberg loss, and .the question presented is whether or not that loss is covered by the terms of the bond of policy. On July 20, 1907, defendant issued a bond or policy .to plaintiff to run until September'19, 1907. ‘ On September 27, 1907, defendantdssued a renewal policy to run from September 20, 1907, to September 20, 1908. On October 21, 1907, Annie Scheinberg was adjudged a bankrupt. The first policy-above mentioned limited defendant’s liability solely by what is termed “ experience,” which confined the insurance to indebtedness incurred ■ by “old” customers of plaintiff. The second policy (upon which this action is brought) was designed to extend the insurance so as to cover indebtedness incurred by “ new ” customers as well as “ old. ” Of course the test of “ experience ” would be inapplicable to “new” customers, and consequently the new policy established a different standard whereby to determine the risk which defendant assumed. Attached to the policy and made a part of it is a schedule called “A,” indicating the risk which the defendant assumed.

This schedule contained a list of letters and figures indicating the ratings published by a specified mercantile agency. Those' ratings ran from Aa-Al to Gr-3%, and to the list was appended the following statement: “ Customers of the indemnified, possessing one of the capital and credit ratings as specified in the above schedule, shall be covered for an amount, not exceeding the sum set opposite such customer’s rating thereon. ” Then followed the definition of “old” and “new”customers, under which Annie Scheinberg would be classed as an “old” customer. As to such customers the policy provided as follows: “TT. Subject to the terms and conditions of the attached Bond and this rider, old customers of the Indemnified possessing a capital and credit rating other than as specified in the above schedule or who are rated entirely blank as to both capital and credit or whose names are not printed in the designated Mercantile Agency book shall be covered for goods shipped during the term of the attached bond, for an amount not exceeding the highest indebtedness such customer owed to the Indemnified at one time, for goods shipped by the Indemnified to such customer within 18 months prior to shipping the first item of the goods wholly or partly included in the account upon which the loss was incurred, not exceeding however, the amount paid upon such highest indebtedness during said period. ” Annie Scheinberg’s rating by the designated mercantile agency during the period covered by the policy was “......4.” This the trial court has found to be both a capital and credit rating, but that finding was clearly inadvertent, as appears by reference to a “Key to ratings” read in evidence, from which it appears that such a rating as was given to Annie Scheinberg relates to credit only, and not to capital. Annie Scheinberg, therefore, during the period covered by the policy, was an “old” customer, having a rating not included in the list of ratings included in Schedule A, and was rated only as to credit, and not as to capital. An indebtedness from her is not, therefore, covered by the letter of the contract, which limits defendant’s liability as to' old customers to those who (1) possess a rating embraced in Schedule A; or, failing that, (2) possess a. capital and credit rating other than those contained in the list; or (3) are rated entirely blank as to both capital and credit; or (4) whose names are not printed in the designated mercantile agency book.

It will be seen that none of these classes embraces a customer like Annie Scheinberg whose name was printed in the agency book, and who had a rating therein as to credit, but not as to' capital. The respondents urge, in support of the judgment. that any ambiguity in the terms of the contract must be resolved most favorably to the insured. Such is no doubt the accepted rule (Rickerson v. Hartford, Fire Ins. Co., 149 N. Y. 307), but there is no room for its application here, since the language of the contract is entirely unambiguous. It is also urged that the word “or” should be substituted for “and” in the description of persons whose debts are insured against, herein-before designated, (2),. so that the- policy will be read so as to cover indebtednéss owing from old customers possessing “a capital or credit rating other than ” one of those contained in the list of ratings included in Schedule A. There are undoubtedly cases in which the courts, in order to' carry into effect the evident intention of the parties, will substitute “or” for “ and ” or vice versa, but there must be something in the context'or elsewhere to clearly indicate what the' intention of the parties was. Otherwise to make such a change would be to make "a new contract for the parties. We find nothing in the context, or in any other circumstances to suggest that the parties intended to make any other ■ contract than that which is ' indicated by the language which they used. That language clearly excludes the indebtedness of Annie Scheinberg from the protection of the policy, and, in so far as the judgment appealed from rests upon a claim for indemnity against her indebtedness, it is erroneous.. The policy provides only for the payment of losses exceeding what is termed an “initial” loss of $750. Since Annie Scheinberg’s indebtedness, as we consider, is not covered by the policy, there remains only the claim upon the indebtedness of the Sanders Manufacturing Company, which is much less than the stipulated initial loss. It cannot, therefore, be recovered. This result necessitates a reversal of the judgment, and as the essential facts cannot be changed upon a new trial, the complaint will be dismissed.

The judgment should be reversed, and the complaint dismissed, ■ with costs to the appellant in this court and the court below.

Ingraham, P.. J., Laughlin, Clarke and Dowling, IJ., concurred.

Judgment reversed and complaint dismissed, with costs to appellant in this court and in the court below.  