On September 29, 1955, at about 8:30 P.M., a Cadillac automobile owned by Jennie Calandriello and travelling in an easterly direction on Newman Spring Road in Middletown Township, Monmouth County, left the highway and crashed into a tree. Two of the occupants of the automobile, Domenic B. Acerra, Jr., who had been driving, and Benjamin E. Smith who had been sitting in the right front seat, were killed; the other three occupants, Fred J. Duncan, James Moyers, and Bruno Talerico, were injured.
On October 20, 1958, many months after the instant proceeding seeking a declaratory judgment was started in this court, jury verdicts totalling $29,500 were returned in the Monmouth County Court against Josephine L. Acerra, as executrix of the estate of Domenic B. Acerra, Jr., and in favor of Duncan, Moyers, Talerico, and the administratrix ad prosequendum of Smith in actions instituted to recover for the injuries and death resulting from the accident.
The ultimate question to be decided by this court is which of two insurance companies, plaintiff Indemnity Insurance Company of North America, hereinafter called "Indemnity," or defendant Metropolitan Casualty Insurance Company of New York, hereinafter called "Metropolitan," is required to pay the judgments and expenses incident to the defense of the law actions; or if both, in what proportion. The limits of each policy far exceed the total of the judgments recovered.
Plaintiffs Indemnity and Josephine L. Acerra, as executrix of the estate of Domenic B. Acerra, Jr., contend that at the time of the accident, there were in force two automobile liability policies which afforded liability insurance coverage to Acerra as the driver of the automobile involved in the accident.
One policy, issued by plaintiff Indemnity to Domenic B. Acerra, Jr., hereinafter called "Acerra," not only covered the automobile owned by Acerra described therein, but also by "Insurance Agreement V" thereof, provided insurance protection to Acerra, the named insured, while he was driving an automobile other than the one owned by him, subject however to the provisions of the "other insurance" clause of the policy which read in part as follows:
"If the insured has other insurance against a loss covered by this policy * * * the insurance with respect to * * * other automobiles under Insuring Agreement V shall be excess insurance over any other valid and collectible insurance."
The other policy, written by defendant Metropolitan, covered the Cadillac involved in the accident and designated Jennie Calandriello, the owner of that automobile, as the "Named Insured." Under that policy Metropolitan agreed, among other things,
"To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of the automobile.";
"defend any suit against the Insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the Company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient."
The benefits of the quoted agreements were not limited to the named insured, Jennie Calandriello; the policy contained an "omnibus clause," in which the word "Insured" was defined as follows:
"With respect to the insurance for bodily injury liability and for property damage liability the unqualified word 'Insured' includes the Named Insured and also includes 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 by the Named Insured or with ...