Goldmann, Foley and Lewis. The opinion of the court was delivered by Foley, J.A.D.
Plaintiffs appeal from a judgment in favor of defendant, Gibb, entered in the County District Court on an agreed statement of facts.
Although impleaded, neither American Rug Cleaning Co., Inc. nor Gillette was before the court, plaintiffs having been under restraint from proceeding against American by an order of the Chancery Division appointing a custodial receiver for that firm, and Gillette not having been served with process.
The facts are these: American leased a motor truck from Gibb; Gillette was operating the vehicle as agent of American when it collided with and damaged plaintiffs' building. Plaintiffs brought an action against the three defendants based upon the negligence of Gillette. Concededly, the relationship of master and servant between Gibb and Gillette did not exist. The trial court held inter alia that the absence of such proof precluded a judgment against Gibb based on Gillette's negligence.
It is well settled as a matter of common law principle that an owner of a vehicle is not liable for an injury caused by the negligent driving of a borrower, if the vehicle was not in use at the time on the owner's business. Doran v. Thomsen , 74 N.J.L. 445 (Sup. Ct. 1907). And this general principle has been held to apply to the situation where a bailor for hire of a vehicle has been sought to be charged with the negligence of his bailee, the court there holding that in the absence of a showing of negligence by the bailor in renting to an irresponsible bailee, the bailor is not liable for the negligent use of the chattel by the bailee. Maurer v. Brown , 106 N.J.L. 284 (Sup. Ct. 1930). The same rule applies, of course, to use or operation by an agent
or servant of the bailee, since no legal privity exists between the servant and the bailor such as would charge the bailor with his negligence.
Notwithstanding this, plaintiffs contend that the effect of the provisions of R.S. 45:21-1 et seq. (L. 1926, c. 249, § 1, p. 421, as amended) was to create vicarious liability in the owner for the negligent act of a bailee of a motor vehicle or the agent or servant of the latter. The pertinent sections of the statute follow:
"'Owner' means any and every person engaged in the business of renting or leasing motor vehicles, without a driver, to be operated by the lessee or bailee, his agent or servant, for purposes other than the transportation of passengers for hire." R.S. 45:21-1.
"Every owner, as defined in section 45:21-1 of this title, shall file with the clerk of the municipality in which he resides or has his place of business a policy of insurance of a company duly licensed to transact business under the insurance laws of this state, insuring such owner against loss from the liability imposed by law upon such owner for damages on account of bodily injury or death suffered by any person other than a person in the employ of such owner, or a person in, on or about such motor vehicle in the status of a driver, passenger for hire or occupant, as a result of accidents occurring by reason of the negligent maintenance, use or operation of such motor vehicle upon the public highways of this state." (Emphasis added) R.S. 45:21-2.
"Such policy of insurance shall provide a limit of liability on the part of the insurer, exclusive of court costs and the expenses of investigating and defending suits, for each motor vehicle covered thereby, in the sum of $10,000.00 for bodily injury to or death of any 1 person, and, subject to the same limit of liability for each person so injured or killed, in the sum of $20,000.00 for bodily injury to or death of more than 1 person in any 1 accident, and for damage to property in the sum of $5,000.00, and shall provide for the payment, subject to the aforesaid limits of liability, of any final judgment recovered by any person on account of the ownership, maintenance and use of such motor vehicle by either the owner or the lessee or bailee, his agent or servant, or any fault in respect thereto, and shall be for the benefit of any person suffering loss, damage or injury as aforesaid. * * *" (Emphasis added) N.J.S.A. 45:21-3.
Where a court is called upon to construe a statute its function is to seek and carry out the ...