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Ambrose v. Indemnity Insurance Co.

Decided: April 25, 1940.


For the plaintiff-appellant, Edmund A. Hayes.

For the defendant-respondent, George L. Burton.


The opinion of the court was delivered by

CASE, J. This is an appeal by the plaintiff from a judgment entered against him in the Supreme Court pursuant to postea from the Middlesex Circuit. There had been an earlier trial wherein the judgment was reversed by this court, 120 N.J.L. 248, with a venire de novo. During the course of the second trial plaintiff amended his complaint to consist of two counts. The first count, with an ad damnum clause of $6,080.85, grounded in the general liability of the defendant company under the terms of an indemnity policy which it carried on John Ambrose against whom plaintiff had secured a judgment. The second count (which included by paragraph references all of the allegations of the first count) carried an ad damnum clause of $5,080.85 and grounded in the same policy as affected by the Motor Vehicle Financial Responsibility law, chapter 116, Pamph. L. 1929, as amended and supplemented by chapter 169, Pamph. L. 1931, now R.S. 39:6-1, et seq. In this manner the way was opened for either a verdict under the first count for the entire amount of the judgment sued upon, $6,080.85, or for a verdict under the second count up to the limitation imposed by the Financial Responsibility act, namely, $5,000 exclusive of interest and costs, with the right in the defendant to plead, as to the excess of the policy above the statutory limitation, any defenses which it might be entitled to plead against the insured. R.S. 39:6-20 (a). Thus the second trial was upon a wholly new set of pleadings. At the close of the trial the judge directed a verdict in favor of the defendant on the first count and sent the second count to the jury upon the primary issue of whether or not the proofs established that the plaintiff, Joseph Ambrose, was, at the time he was injured, an employe engaged in any business or occupation of John Ambrose (brother to Joseph), the assured. The judge further instructed the jury that if it should find affirmatively on that question its verdict should be for the defendant, but that if it found that Joseph was not so employed there should be a verdict for the plaintiff in the sum of $5,080.85. The jury brought in a verdict for the defendant. The significance of

the question thus put to and decided by the jury lay in the following provision of the insurance contract:

"This Policy does not cover: (a) any liability of the Assured to any employe of the Assured (except household servants other than chauffeurs) while engaged in any business or occupation of the Assured or in the operation, maintenance or use of any automobile covered by this Policy, or to any person to whom the Assured may be liable under any Workmen's Compensation Law."

That contractual exclusion, as well as the assertion that the plaintiff came within the exclusion, was pleaded as a separate defense to each count.

The grounds of appeal go to the direction of verdict (inadvertently called a nonsuit) for the defendant on the first count and to certain of the court's rulings on evidence.

It is first said for the appellant that the trial judge, in directing the verdict on the first count, erred in holding that the assured's ownership of the motor vehicle under a conditional bill of sale was a breach of the policy warranty that "The automobiles covered hereby are owned exclusively by the named assured except as follows: No exceptions." The question here presented is whether the character of ownership held by the assured was a breach of the warranty that ownership was exclusive in him. The second point carries a related argument. The instrument of purchase is not printed with the papers in the case. It is, as we have said, called a conditional bill of sale. But that proves little. Some of the contents were read into the testimony, and those parts we have; such, for instance, as an identification of the car which caused the injury, its total price, the amount paid, the balance due and how payable, and this clause: "One: Title to said property shall not pass to purchaser until said amount is fully paid in cash." It is conceded that the amount of the purchase price had not, at the time in question, been fully paid. From the proofs before us it therefore appears that title had not passed to John Ambrose. If title had not passed to him, surely he could not have been the exclusive owner, and that is what, at the issuing of the policy, he represented he was. "Exclusive owner" is much the same as "sole owner," and the

latter expression was defined in Hudson Casualty Insurance Co. v. Garfinkel, 111 N.J. Eq. 70, as descriptive of the condition which exists "when no other has any interest in the property as owner." It was Vice-Chancellor Bigelow's view, as expressed in U.S. Casualty Co. v. Timmerman, 118 N.J. Eq. 563, that title under a conditional bill of sale was not exclusive ownership within the meaning of a policy representation that an automobile was owned exclusively by the assured. We need not go that far. What the entire contract would disclose we do not know; but so much of it as is printed leads us to conclude, under the Garfinkel case, supra, that the warranty was false and that the court's action thereon was without error.

But if it were otherwise we fail to see how appellant would be harmed. Had the first count gone, as appellant thinks it should have, to the jury along with the second, it would have come to nothing upon a finding that plaintiff's status with respect to his injury was that of an employe. The jury verdict on the second count necessarily comprehended an affirmative finding upon the primary question of employment which could not, under the pleadings and the proofs, be otherwise on the first count than on the second. Employment and its incidents having been found to exist, ...

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