Martino, J.c.c. (temporarily assigned).
[43 NJSuper Page 324] This is an action by the plaintiff Maryland Casualty Company seeking reimbursement by way of indemnification or, in the alternative, contribution from the defendant New Jersey Manufacturers Casualty Insurance Co. The action arises from an accident which occurred on March 2, 1952 at the Camden Marine Terminal, operated by the South Jersey Port Commission, in which accident one Horace Kelly, an employee of William H. Bair Trucking Company, suffered injuries for which he filed an action in the Superior Court of New Jersey, Law Division, against William Cherry and South Jersey Port Commission, made defendants in this action, wherein he alleged that his bodily injuries were caused by the negligence of William Cherry, and further asserted that the South Jersey Port Commission was liable for the negligence of William Cherry, as its servant and agent. The South Jersey Port Commission, at that time, was insured against loss by reason of alleged acts of negligence upon its
premises by the Maryland Casualty Company, who undertook to defend the South Jersey Port Commission and, in due course, made a settlement for and on behalf of the South Jersey Port Commission with Horace Kelly for the sum of $20,000. It is to recover the said sum of $20,000 that the plaintiff Maryland Casualty Company commenced this action.
The facts, supported by the evidence presented at the trial, do not seem to be seriously controverted. It was definitely established without contradiction that on the 2nd day of March, 1952, on the premises of the Camden Marine Terminal, Camden, New Jersey, an accident occurred and injuries were suffered by Horace Kelly, made a defendant in these proceedings. At the time of the accident Kelly was employed by one of the defendants, William H. Bair Trucking Company, as a truck driver, and during the course of his day's work he had driven a truck to the Camden Marine Terminal, operated by the South Jersey Port Commission, to be loaded with large rolls of paper, varying in weight from 2,500 lbs. to 4,500 lbs. William H. Bair, the owner of the trucking company, was present on the premises and his truck was being loaded by reason of his request, although he was not at the scene of the accident when it occurred. The loading operation was being performed by Horace Kelly, William Cherry (an employee of the defendant South Jersey Port Commission) and one Louis Constontini. Cherry was lifting rolls of paper by means of a lift truck and releasing the same on to the truck of William H. Bair Trucking Company. Kelly was within the truck and adjusting the rolls after they were placed thereon. During this loading operation it appears that Cherry released one of the rolls onto the truck in such manner as to cause the same to strike and injure Kelly, who was standing on the truck. To recover damages for the injuries sustained, Horace Kelly brought an action against William Cherry and the South Jersey Port Commission, alleging that the negligence of Cherry was the proximate cause of his injuries and asserting the liability of the South Jersey Port Commission on the theory of respondeat superior.
It appears that at the time and place stated the plaintiff Maryland Casualty Company, pursuant to a contract of comprehensive public liability insurance, insured the South Jersey Port Commission against loss by reason of its alleged acts of negligence. The Maryland Casualty Company contends, and proof was given in support of the statement, that its insurance afforded no coverage to defendant William Cherry. It also appears that at the same time New Jersey Manufacturers Casualty Insurance Company (hereinafter referred for brevity as New Jersey Manufacturers) insured the William H. Bair Trucking Company against loss by reason of negligence in the ownership, maintenance or use of the truck previously mentioned. The insurance policy of the New Jersey Manufacturers contained a clause commonly known as the "omnibus clause," which is more fully set out hereinafter. This policy also contained a "loading and unloading" clause and an exclusion clause which will be more fully referred to herein.
William Cherry and South Jersey Port Commission made a demand upon New Jersey Manufacturers to assume their defense in the action brought by Horace Kelly, contending that they were covered by the omnibus clause of the policy issued by the New Jersey Manufacturers. The latter company refused to undertake such defense, whereupon the plaintiff Maryland Casualty Company, in accordance with its obligation under its policy, assumed the defense of the defendant South Jersey Port Commission against the claim made by Kelly, and during the pendency of the litigation settled the case by making payment to Kelly in the sum of $20,000. It is not in dispute and, in fact, it has been stipulated by the plaintiff and the defendant New Jersey Manufacturers, that neither the amount of the settlement nor the means or manner by which it was effected would be contested, and, further, that the liability of the South Jersey Port Commission arose through the relationship of respondeat superior between the South Jersey Port Commission and William Cherry, its employee. The defendant William Cherry has filed a cross-claim against the defendant New
Jersey Manufacturers. The plaintiff introduced in evidence a general release executed by Horace Kelly releasing the South Jersey Port Commission in consideration of $20,000. A stipulation of dismissal of the original suit as to South Jersey Port Commission was also introduced by plaintiff. The suit of Horace Kelly against William Cherry has not been terminated.
The principal questions raised by the defendants to this suit are as follows:
First: Do the terms and provisions of the policy issued by defendant New Jersey Manufacturers to defendant William H. Bair, trading as William H. Bair Trucking Company, by reason of its omnibus clause extend coverage to the South Jersey Port Commission and William Cherry, its employee, as an insured, although they are not the named insured?
Second: If it is decided that the insurance policy issued to William H. Bair, trading as William H. Bair Trucking Company, covers South Jersey Port Commission and William Cherry as "insured," do not exclusion provisions (d) and (e) prohibit any right to recovery to this plaintiff for any payment made to Horace Kelly for the injuries he sustained?
In order to decide the first question it will be necessary to examine those provisions of the policy issued by the defendant New Jersey Manufacturers which control the answer. They are as follows:
"III DEFINITION OF 'INSURED.' The unqualified word 'insured' wherever used in coverages A and B and in other parts of this policy, when applicable to such coverages, includes the named insured and also includes, under divisions 1 and 2 of the Definition of Hazards, any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the named insured, and under division 3 of the Definition of Hazards, any executive officer of the named insured."
"5. PURPOSES OF USE DEFINED. (a) The term 'pleasure and business' is defined as personal, pleasure, family and business use; (b) the term 'commercial' is defined as use principally in the business occupation of the named insured as stated in Item 1 of the declaration, including occasional use for personal, pleasure, family and other business purposes; (c) use ...