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Atlantic Casualty Insurance Co. v. Edwards

Decided: December 5, 1956.

ATLANTIC CASUALTY INSURANCE COMPANY, A CORPORATION, PLAINTIFF,
v.
GEORGE W. EDWARDS, JR., AND MILLIE EDWARDS, DEFENDANTS



Foley, J.c.c.

Foley

The plaintiff and the defendant, Millie Edwards, bring counter motions for summary judgment in an action in which the insurance company seeks reimbursement for losses it sustained on a policy of automobile liability insurance written in behalf of the defendants pursuant to the provisions of the Financial Responsibility Law, R.S. 39:6-1 et seq. (1937), now N.J.S.A. 39:6-23 et seq., L. 1952, c. 173.

The facts upon which the plaintiff suffered the loss which it now would transfer to its assureds, and the pertinent provisions of the policy in question, are set forth in detail in Saffore v. Atlantic Casualty Insurance Co. , 21 N.J. 300 (1956).

There the court struck down the company's contention that it was not liable to the injured plaintiffs because the policy did not provide omnibus coverage, holding that since the statute under which the instrument was written required that such coverage be included (R.S. 39:6-18), it was deemed to have been afforded, notwithstanding a contrary policy provision that:

"Endorsement No. 17 -- Limitation of Use -- Named Assured Only.

It is agreed that said insurance as is afforded by the policy for bodily injury liability, for property damage liability, and for medical

payments, which applies only while the automobile is operated by the named Insured.

It is further agreed that such insurance * * * does not apply while the automobile is operated by any person other than the named insured."

Of this contention the court said:

"The insurer could refuse to enter into the contract of insurance required by the statute; but, having undertaken to give liability insurance coverage, the statutory terms became a constituent element of the contract. The statute determines the legal operation of the contract. Herbert L. Farkas Co. v. New York Fire Insurance Co. , 5 N.J. 604 (1950); Rikowski v. Fidelity and Casualty Co. , 117 N.J.L. 407 (E. & A. 1936); Krieg v. Phoenix Insurance Co. , 116 N.J.L. 467 (E. & A. 1936); Osborn v. New Amsterdam Casualty Co. , 111 N.J.L. 358 (E. & A. 1933). A specific provision integrated into the contract by force of a statute, as a matter of public policy, 'must be interpreted and given effect in accordance with the intention of the legislature, irrespective of how the contractors understood it. Exactly the same result is reached even though the parties know nothing of the statute and do not include the provision, and even though they know of it and expressly agree upon the exact contrary.'"

The engagement upon which the plaintiff now claims for indemnification provides:

"The insured agrees to reimburse the company for any payments made by the company which it would not have been obligated to make except for the agreement contained in this paragraph [ viz. , ...


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