Goldmann, Freund and Conford. The opinion of the court was delivered by Freund, J.A.D.
[47 NJSuper Page 436] This is an appeal from a judgment of involuntary dismissal, entered in the Law Division, dismissing Meyer's third-party complaint against the third-party
defendants, Atlantic Casualty Insurance Company and Dennis Epperson. In the main action, not involved in this appeal, the plaintiffs, Kromenski and another, obtained two judgments, totaling $17,000, against Meyer for damages as the result of an automobile accident. Meyer's third-party action against the company and its employee Epperson is predicated on the existence at the time of the accident of a policy of automobile liability insurance covering his liability in respect to the accident. Meyer appeals from the judgment of dismissal granted at the close of his case in the third-party action.
On June 11, 1955 Gerald Meyer, the third-party plaintiff, was the owner and operator of an automobile which was involved in an accident with an automobile owned and operated by Walter J. Kromenski, with resulting injuries to Kromenski and to Barbara Kromenski, a minor. They instituted suit against Meyer, whereupon he filed a third-party complaint against the Atlantic Casualty Insurance Company and Dennis Epperson. The first count of the third-party complaint alleged that at the time of the accident with the Kromenskis, Meyer was insured by the defendant insurance company for automobile liability in the amount of $10,000 for each person and $20,000 for each accident, and was entitled to indemnification within the limitations of the policy, together with a defense to the Kromenski action. The second count sought a judgment against the defendant Dennis Epperson, as the duly authorized agent and representative of the third-party Atlantic Casualty Insurance Company. After answers to the Kromenski suit were filed by Meyer and by the third-party defendants, the latter moved for a summary judgment in their favor on the third-party complaint, which was denied. The pretrial order directed that the two causes of action be severed for trial and that the complaint involving the accident be tried first.
The cause of action of the Kromenskis against Meyer was tried with a jury and resulted in judgments against Meyer in favor of Walter J. Kromenski, as guardian ad litem of Barbara Kromenski, an infant, for $12,000, and in favor of
Walter J. Kromenski for $5,000, with costs. Both judgments remain unpaid. Subsequently, the third-party cause of action of Meyer against the insurance company was moved for trial. At the conclusion of the third-party plaintiff's case, the defendants moved for a dismissal of the third-party complaint and the entry of a judgment in their favor, which was granted.
The trial judge in disposing of the motion concluded that delivery of the insurance policy was conditioned upon payment of the premium according to the understanding between the parties; that when Meyer did not have the money, Epperson became concerned and Meyer therefore surrendered the policy to Epperson with the intention that the policy would not be in force until Meyer paid the initial premium; and that Epperson was acting within the scope of his authority.
The testimony discloses that Meyer and defendant Epperson had been friends for two years prior to May 1955. They were both members of the "Jim Ryan Association." Epperson was a branch manager of the Automobile Association of New Jersey, which is the sole general agent and manager of the Atlantic Casualty Insurance Co. and which is the owner of the majority of the stock in that company. Both companies had offices at the same address and Epperson had his name on the front door of the office as "Branch Manager." In June 1955 he was a duly licensed insurance agent. He was authorized to countersign liability insurance policies issued by the Atlantic Casualty Insurance Company, and received commissions for premiums on such policies.
Meyer, being the owner of an automobile, was solicited by Epperson for automobile liability insurance. In the carly part of May 1955 Meyer made an application for such insurance and left it, in the absence of Epperson, at his office with the person in charge. The application contained several options with respect to the payment of insurance premiums and Meyer chose the plan of "monthly payment -- minimum $10 or 10%, whichever is greater per month." When Epperson saw Meyer, he expressed his appreciation for the business
and stated that when the application was approved by the home office, he would type the policy and deliver it to Meyer. On June 3, 1955 Epperson unconditionally delivered the policy to Meyer at Ryan's Tavern. Meyer testified that when the delivery was made he told Epperson that he "didn't have the first payment, I would probably have it in a couple of days," and Epperson said "it would be all right with him." The next occasion, June 7, when they saw each other at the Ryan Association, Epperson asked Meyer if he had the first premium payment and Meyer told him he was behind in the payment due on his car and wanted to pay it first. Meyer testified that when Epperson said "he felt he should have the policy back so to make him feel better" he got the policy from his car and gave it to Epperson. Meyer further said that Epperson told him "he would hang onto the policy for me a few days until I had the premium, the first premium." In the afternoon of June 10, when they saw each other at Ryan's, Epperson again asked for payment and Meyer testified that in reply he said "No * * * but I will definitely probably (sic) have it next week * * * I will let you know one way or the other," and Epperson said "All right."
The following day, June 11, at about 6 P.M., the accident occurred with the Kromenskis. Later that night Meyer saw Epperson at Ryan's Tavern and for the first time was told by Epperson that the policy had been canceled. Meyer testified that he then told Epperson that he wanted to know by what authority he had canceled the policy. Epperson replied that the policy had been canceled the day before on June 10. On Monday following the accident Meyer filled out the report of the accident and mailed it to the insurance company. Meyer's explanation of why he filled out the report and mailed it to the insurance ...