Freund, Coolahan and Weintraub. The opinion of the court was delivered by Weintraub, J.s.c. (temporarily assigned). Freund, J.A.D. (dissenting).
Defendant issued an automobile liability insurance policy in New York to one Fred Mancini, a resident of that state. During the policy period Mancini was involved in an accident in our State resulting in injuries for which plaintiffs sued him here. The insurer disclaimed liability. Plaintiffs obtained judgment against Mancini and then brought this action upon the policy. The trial court gave judgment for defendant.
The trial court found that Mancini's real name is Fabrizio Inghilleri; that in 1948 he had been involved in an accident in New York as a result of which his license was suspended under the terms of the financial responsibility law of that state; that instead of furnishing proof of responsibility as required by the New York law he obtained a new New York driver's license under the name of Fred
Mancini and thereafter obtained the policy in question from defendant by fraud as to his identity. Additionally the court found Mancini failed to comply with the policy provision for notice of the occurrence of the accident involving plaintiffs.
The trial court's factual findings are not here questioned. Rather, plaintiffs contend defendant is liable to them without regard to its liability to Mancini by reason of the financial responsibility laws of the States of New York and New Jersey and the following provision of the insurance policy:
"Such insurance as is afforded by this policy for Bodily Injury Liability or Property Damage Liability shall comply with the provisions of the motor vehicle financial responsibility law of any state or province which shall be applicable with respect to any liability arising out of the ownership, maintenance, or use of the automobile during the policy period. * * *"
The trial court held that the law of New York applied and that the insurer was not liable under its financial responsibility law because it had not certified the policy to the Commissioner of Motor Vehicles of that state under the provisions of the act.
Plaintiffs press for application of our decisions holding an insurer liable in accordance with the terms of the New Jersey statute (R.S. 39:6-1 et seq. at the time the policy was issued), notwithstanding that proof of responsibility was not filed with the Director of the Division of Motor Vehicles, upon a showing that a policy with the quoted provision was issued in this State to a person of whom proof of financial responsibility could have been required by the Director.
It seems to us that (1) the law of New York applies and (2) if it should be assumed that the law of New Jersey controls, yet the present situation would not fall within the principle of the New Jersey cases relied upon.
Ordinarily the construction of a contract will be governed by the law of the state in which the contract was made. 11 Am. Jur., Conflict of Laws, sec. 116, et seq., p.
397 et seq.; Hinkly v. Freick , 86 N.J.L. 281 (E. & A. 1914); James H. Rhodes & Co. v. Chausovsky , 137 N.J.L. 459 (Sup. Ct. 1948); Avery v. Sielcken-Schwarz , 5 N.J. Super. 195 (App. Div. 1949). This general rule is applicable to policies of insurance. 2 Beale, The Conflict of Laws (1935), sec. 346.4, p. 1210; 12 Appleman, Insurance Law and Practice (1943), sec. 7079, p. 120; 3 Richards, Insurance (5 th ed. 1952), sec. 399, p. 1318. The policy having been executed in New York and delivered to a resident of New York with respect to a motor vehicle registered in New York, the general rule should be applied, and especially so with respect to the issue of fraud in the inception of the contract. It is true that since the usual policy also affords coverage with respect to operation outside the state of issuance the insurer will at times be called upon to perform in other jurisdictions, although generally the place of performance is in fact the state of the insured's residence. The circumstance that defendant may be called upon to defend suits in other jurisdictions is not enough to take the policy outside of the usual rule of conflict of laws applicable to interpretation of contracts, unless it should affirmatively appear that the parties intended the law of another jurisdiction to control.
Clement v. Atlantic Casualty Insurance Co. , 13 N.J. 439 (1953), does not hold to the contrary. The policy, issued in New Jersey, covered liability imposed by law with respect to operation anywhere in the United States. An accident occurred in New York and there resulted in a judgment against the insured. In an action upon the policy the insurer sought to escape by contending that if the accident had occurred in New Jersey, the third party could not have prevailed against the insured. In short, although the policy provided for insurance against liability under the laws of any of the states in which the vehicle might be operated, the carrier sought to limit coverage to such liability as would have been imposed by the law of New Jersey if the accident had here occurred. The court, of course, rejected the insurer's position. The parties to the contract plainly
contemplated an obligation to pay with respect to judgments based upon liability imposed upon the insured by the law of another state with respect to operation in such state. In thus construing the contract to embrace judgments against the insured entered in other jurisdictions, the court did not construe the policy under the law of the jurisdiction where the accident occurred, but rather applied the law of New Jersey; that is, the court concluded that by virtue of the law of New Jersey the contract of insurance is interpreted to cover liability imposed by the law of another state even though the basis of the insured's liability would not be recognized in our State if the accident had here occurred and the suit against the insured had been brought here.
Does the quoted provision of the policy show either that the parties to the contract intended the law of New Jersey to apply or that the insurer intended voluntarily to afford protection under the New Jersey financial responsibility law? We think not. The provision was included in a standard form of policy to the end that the policy would be acceptable in those states having financial responsibility laws in which the company might undertake to issue the policy. We agree with the view to that effect in Farm Bureau Mutual Automobile Insurance Co. v. Georgiana , 14 N.J. Super. 459, 468 (Ch. Div. 1951). See also McCann for use of Osterman v. Continental Casualty Co. , 6 Ill. App. 2 d 527, 128 N.E. 2 d 624, 626 (App. Ct. 1955).
We think it unreasonable to assume a gratuitous undertaking by the insurer to have a policy issued in one state ambulate elsewhere to provide coverage under the financial responsibility laws of all other states through which the insured might happen to pass. It should be borne in mind that the additional obligations of the policy provision and the statute are not for the ultimate benefit of the insured; in fact, the insured would be liable to reimburse the insurer if it were called upon to pay third-party claimants in circumstances in which it would not be liable but for the financial responsibility law. Rather, the provision and a statute which requires it are intended for the protection of
the public. The insurer could hardly have in fact intended voluntarily and without compulsion to assume obligations for the benefit of the public of all jurisdictions in which the insured may happen to drive, except, of course, in those situations in which it actually tenders its policy to another jurisdiction because its insured has there been denied the privilege of operation by reason of some prior involvement. See also American Fidelity & Casualty Co. v. Sterling Express Co., Inc. , 91 N.H. 466, 22 A. 2 d 327 (Sup. Ct. 1941), and annotation in 137 A.L.R. 656; but see Hartford Accident & Indemnity Co. v. Wolbarst , 95 N.H. 40, 57 A. 2 d 151 (Sup. Ct. 1948).
Moreover, if the policy provision should be thought to have the ambulatory quality suggested, there is the gravest doubt that a different result could here be reached. It is settled in this State that, even as to a policy issued here containing the policy provision in question, the insurer is not liable under our financial responsibility law unless the insured was a person who could have been called upon to furnish proof of responsibility. Rasinski v. The Metropolitan Casualty Insurance Co. of New York , 117 N.J.L. 490 (E. & A. 1937); Woloshin v. Century Indemnity Co. , 116 N.J.L. 577 (Sup. Ct. 1936); Brodsky v. Motorists Casualty Insurance Co. , 112 N.J.L. 211 (Sup. Ct. 1934). In the present case, the insured had not been involved in any event in New Jersey upon which proof of responsibility could have been required under our statute as it existed when the policy issued. The insured's prior difficulty consisted of an accident in New York resulting in damage in excess of $100. It is extremely doubtful that our statute reaches a transient, non-resident insured whose prior difficulty arose in another state.
Hence we turn to the law of New York. The possible bases for recovery are two: (1) liability imposed by the New York statute and (2) liability voluntarily assumed under New York law. Let us consider them in inverse order.
As observed in Georgiana, supra (14 N.J. Super. , at page 466) it was not clear at the time of that decision
whether our prior cases in which the insurer was held even though the policy was not offered as proof of responsibility, "rest ultimately upon the proposition that the issuance of a policy to a person within the mentioned class becomes burdened with the obligations of the statute by virtue of the inexorable operation of the law, or whether the result rests upon the thesis that the carrier has voluntarily assumed a liability which it need not assume." As we read Atlantic Casualty Insurance Co. v. Bingham , 10 N.J. 460 (1952), and Saffore v. Atlantic Casualty Insurance Co. , 21 N.J. 300 (1956), it would now appear to be settled that our rule rests upon the statute itself. We see no suggestion in the cases in New York that the policy provision here involved would constitute a voluntary assumption of the statutory liability even though the policy was not certified as proof of responsibility. If our cases held the insurer on the basis of a voluntary assumption of liability independent of the compulsion of the statute and thus could be said to find liability under principles of common law, there would be presented the question whether we could properly find for plaintiffs by assuming the New York common law to be the same as ours. Cf. Leary v. Gledhill , 8 N.J. 260 (1951). But since our cases now appear to rest the result therein reached wholly upon the New Jersey statute (or at least partly so), plaintiff can prevail only if the New York statute will bear the interpretation we have placed upon ours.
Hence we examine the New York statute to determine whether it imposes the liability here asserted. It differs from ours. Section 94-q of Article 6-A of the New York Vehicle and Traffic Law provides:
"(a) A 'motor vehicle liability policy' as said term is used in this article shall mean an owner's or an operator's policy of liability insurance certified as provided in section ninety-four-n or section ninety-four-p as proof of financial responsibility , and issued except as otherwise provided in section ninety-four-p, by an insurance carrier duly authorized to transact business ...