For the motion, Heine & Laird (John A. Laird, of counsel).
Contra, Arthur T. Vanderbilt (Mr. Jacobs, of counsel).
On action at law. On decision on motion to strike out defendant's answer and for summary judgment.
DUNGAN, C. C. J. In February, 1928, plaintiff was injured by a truck owned by Joseph Forte, as a result of the negligent operation by William E. Bennett, and in March, 1929, he instituted suit against them and eventually obtained a judgment against them for $22,000. Execution was issued on this judgment, and returned unsatisfied. Hudson Casualty Insurance Company had issued a policy of insurance indemnifying Forte to the extent of $10,000 for any accident resulting in injury to one person, and when the suit against Forte and Bennett was commenced, the summons and complaint in that action were sent to the Hudson Casualty Insurance Company, which subsequently, during the pendency of the action, was merged into the Public Indemnity Company the defendant in this suit; and these companies -- first the former by its attorneys filed the answer for the defendants Forte and Bennett, and then the latter by its attorneys, unsuccessfully conducted the defense in that suit. Upon the return of the execution therein, this plaintiff brought this suit against the Public Indemnity Company, the successor of the Hudson Casualty Insurance Company, under the provisions of chapter 153 of the laws of 1924, page 352, which is as follows:
"No policy of insurance against loss or damage resulting from accident * * * shall be issued or delivered in this state by * * * any insurer authorized to do business in this state, unless there shall be contained within such policy a provision that the insolvency or bankruptcy of the person insured shall not release the insurance carrier from the payment of damages for injury sustained or loss occasioned during the life of such policy, and stating that in case execution against the insured is returned unsatisfied in an action brought by the injured person * * * because of such insolvency or bankruptcy, then an action may be maintained by the injured person * * * against such corporation under the terms of the policy for the amount of the judgment, not exceeding the amount of the policy."
The complaint in this case stated the action by the plaintiff against Forte and Bennett, the entry of judgment against them, the issue of execution thereon, its return unsatisfied, the issuing of the policy in suit to Forte, and demanded damages in the sum of $10,000. The defendant by its answer set up two defenses, which may be summarized as follows:
1. That the policy required the assured to give immediate written notice of any accident causing loss covered by the policy, which he failed and neglected to do until more than a year after the accident resulting in the suit.
2. That the policy had a "named operator" endorsement, which provided that the policy should cover only while the automobile was being driven by Joseph Forte and Arthur Wood; and that, in violation of that endorsement, the automobile involved in the accident was being driven by William E. Bennett.
The plaintiff thereupon amended his complaint and alleged that the answer to the complaint in the action against Forte and Bennett was flied by the attorney appearing for them therein, at the request of the Hudson Casualty Insurance Company, which company retained and paid him; and that the attorney who tried the case for them in the Bergen County Circuit Court was engaged by the Public Indemnity Company, with which the Hudson Casualty Insurance Company had become merged in the meantime; that he was paid for his services by the Public Indemnity Company; that these acts of the Hudson Casualty Insurance Company and of the Public Indemnity Company constitute an admission that said companies insured Forte and Bennett; and that "the Public Indemnity Company is now estopped to deny that Forte and Bennett are covered by the said policy" in accordance with the policy limits therein contained.
In answer to this amended complaint the defendant says that on April 11th, 1929, Hudson Casualty Insurance Company wrote a letter to the assured Forte, disclaiming liability for failure to give immediate notice of the accident and for a violation of the "named operator" endorsement, and returned the papers in the case to him and suggested the employment by him of counsel to defend the action, but stating that the company would file an answer for him and defend the action if he desired, but upon "the full reservation of our rights, and will not be any assumption of liability." This letter was returned by Mr. Forte with the following endorsement; "I hereby request that the Hudson Casualty Insurance Company undertake the defense of the suit of Charles Suydam v. Joseph Forte and William E. Bennett now pending in the Circuit Court of Bergen county, without further obligation on their part, in accordance with the contents of the above letter. (Signed) Joseph Forte."
A similar letter was written to Mr. Bennett, who also returned with a like endorsement.
Thereafter, under date of May 27th, 1931, Mr. Forte signed and delivered to the defendant, Public Indemnity Company, a non-waiver agreement, as follows:
It is hereby agreed by and between Joseph Forte, hereinafter called the Insured, and the Public Indemnity Company, hereinafter called the Company, that the Company shall by its representative, and at such time and in such manner as it deems advisable, proceed to, and, investigate, a certain accident which occurred, or is alleged to have occurred on or about the 14th day of February, 1928, at Creskill, New Jersey; and this agreement and investigation and/or any act performed, or thing done, by the said representative, the Company or by or in its behalf, including, but not limited to, all proceedings necessary to the legal defense of any action or suit arising therefrom or in connection therewith and consequent upon the said accident, and until such time as the Company may expressly communicate to the Insured its position in writing, shall ...