On appeal from the First District Court of Jersey City.
For the appellant, McDermott, Enright & Carpenter (Charles S. Kuebler, of counsel).
For the appellees, Verga & Verga (Julius A. Kepsel, of counsel).
Before Justices Trenchard, Heher and Perskie.
The opinion of the court was delivered by
PERSKIE, J. The agreed state of case discloses that counsel for the respective parties have stipulated that the sole question requiring decision is whether the defendants were required, under their written contract with the plaintiff, to procure their insurance for public liability and workmen's compensation through the latter as their broker.
The stated question arises out of the written contract, dated April 1st, 1933, made between the respective parties. This contract is lengthy and it will serve no useful purpose to restate it in detail. Suffice it to say that by its general terms the plaintiff agreed to install at its own cost an automatic sprinkler system in the defendants' premises located in Jersey City. The defendants in turn agreed during the term of the contract, from April 1st, 1933, to December 31st, 1943, to procure certain policies of insurance through the plaintiff as their broker. Defendants agreed (first paragraph) "to order, apply for, procure and accept policies of fire insurance * * * on merchandise, machinery, furniture, fixtures and improvements of the assured * * * in or on the buildings and premises situate and known as 474-476 Grand Street, Jersey City, * * * and upon the said buildings and premises and upon the rents of said buildings and premises, and upon the use and occupancy of said buildings and premises, and the use and occupancy of the business conducted therein and thereon. Said policies to be at all times in amounts at least equal to the full value of said property and items respectively, and at no time less than Twenty Five Thousand 00/100 dollars ($25,000.00)."
Plaintiff installed the sprinkling system. Defendants concede that they were obligated to effect the insurance enumerated as aforesaid through the plaintiff and accordingly consented to the entry of judgment on the first and second counts, which embraced such insurance. The third count of the demand presents the question in issue. Were the defendants obliged to procure their public liability and workmen's compensation insurance through the plaintiff?
Paragraph seven of the agreement provided:
"The assured covenants and agrees that during the period of this contract it will, through the broker as its agent or broker, order, apply for, procure and accept policies for all its insurance of every kind and description which it may desire or require, in addition to the insurance which it is obligated to accept and carry under the first paragraph hereof. All such insurance as the assured is not obligated to accept and carry under the paragraph First of this contract and at the fixed rates provided in paragraph Second hereof, is for convenience of designation called additional insurance, and embraces every and all kinds of insurance which the assured may desire or require on any property, items, effects, privileges, rights or immunities wherever the same may be located or situated. For the purpose of illustration (but not limitation) such additional insurance is declared to include floating, casualty, burglary, liability, marine, manufacturers' floater, plate glass and fire insurance. For all such additional insurance or renewals thereof the assured shall pay on demand to the broker the premium appearing in each case on the policy procured, originally or as a renewal, by the broker and delivered to the assured. Provided, however, that if the broker shall fail or refuse to furnish to the assured any such additional insurance within fifteen days after a written request therefor, then only and thereupon the assured may procure the additional insurance not so furnished by the broker, from other sources, without being liable for commissions thereon to the broker.
"The intent hereof is that the assured having definitely bound itself to accept and carry at fixed rates the insurance mentioned in paragraph First hereof, further agrees that the broker shall have, in addition thereto, the right as broker to place any other insurance controlled by the assured at any place, so that the broker can make the customary commissions thereon allowed by insurers to brokers, and that only as and when the broker is unable or unwilling to procure such additional insurance, shall the assured obtain it through other agencies ...