On appeal from the Supreme Court.
For the appellants, Harold K. Smith.
For the respondent, Green & Green (Harry Green, of counsel).
The opinion of the court was delivered by
LLOYD, J. There was a stipulation of the substantial facts and the case was submitted to the learned trial judge without a jury. Upon this stipulation it appeared that the defendant issued its policy January 2d, 1931, to one Reuben Stier. It was a liability policy covering Stier's Chevrolet coach while being operated by Stier or by any other person with his permission. Manuel Stier, a son of the insured, was operating the car while in the service of the Kreuger Beverage Company, and as that company's employe, with the father's permission. While using it, the car was involved in an accident resulting in personal injuries to one Claude McCollum. Judgment was recovered by McCollum for these injuries against Manuel Stier and the Kreuger Company on March 19th, 1932. The judgment was purchased in the name of Miller (or paid) by the Royal Insurance Company, which company had insured the Kreuger Company against liability for damages to persons or property resulting from the operation of certain automobiles of that company.
Action was then instituted by the Royal Insurance Company through Miller against the insurer of Reuben Stier, the defendant in this case. This action was begun sometime in March, 1933; the exact date is in dispute between the parties.
The liability of the Kreuger Company as well as of its employe Manuel Stier has been established by the judgment of McCollum. This liability was predicated upon the negligence of the operator of the car while the operator was in the employ of the Kreuger Company.
If the judgment was paid by the Royal Insurance Company as the result of obligations contained in the policy which the insurance company had issued to the beverage company then obviously it was paying its own debt, and, in the absence of a right of contribution (which is not asserted here) it could have no right of recovery against the defendant in the present case. It was contended, however, that because of certain facts it was not liable on its policy to the Kreuger Company and therefore it stood solely in the relation of an assignee of the McCollum judgment. This question was not passed upon by
the trial judge, who held that an amendment to the complaint introduced a new and different cause of action, and that this amendment was filed too late as of time by reason of the terms of the policy.
From the stipulation of facts it further appears that the Royal Insurance Company undertook the defense of the action as against Kreuger and Manuel Stier without reservation, and the trial of the action was conducted by its attorneys on behalf of both. It is admitted in appellant's brief that the Royal's policy was one of absolute liability under the New Jersey Financial Responsibility act. By according defense the insurance company under our cases became fixed in its liability to protect Kreuger against the judgment which McCollum subsequently obtained. The judgment against Kreuger became the obligation of Royal and it could not be shifted to the present defendant by a roundabout purchase of the judgment instead of its extinguishment. Caiola v. Aetna Life Insurance Co., 13 N.J. Mis. R. 845; 181 A. 524; affirmed, 116 N.J.L. 381, and cases cited.
What is here stated we think is also applicable to the alleged purchase of the judgment in so far as it was against Stier. The policy was a general one insuring not only the Kreuger Company but any one operating the car with its permission. To this was added an endorsement limiting such liability to the Kreuger Company and certain others named if the car operated be one leased or loaned by or registered in the name of the insured; also a schedule specifying certain individual employes only as protected.
Whether there was a hiring or leasing of the Stier car by Kreuger is perhaps not clear under Manuel Stier's employment, and it is not important, as our conclusion is that by making defense for Manuel Stier and conducting the trial on his behalf, the company waived the right to assert non-coverage either by virtue of the limiting provision or of the schedule. There was the general provision of coverage. If the subsequent modification were relied upon, such reliance ...