This case was submitted to the court upon a stipulated statement of facts. It concerns the construction of two insurance policies. The plaintiff, London and Lancashire Insurance Company, Ltd. ("London"), through one of its subsidiary carriers, Safeguard Insurance Company, insured a 1953 Ford belonging to one Angelina Bellomo. On September 18, 1958 Charles Bellomo, son of the aforementioned insured, borrowed his mother's car with her permission. He was involved in an accident in North Bergen, New Jersey, causing injuries to one Joseph P. McDermott, Jr. Subsequently, McDermott instituted a suit against the Bellomos in the Superior Court, Law Division, seeking to recover damages for injuries sustained in the September 18th accident.
Charles Bellomo duly notified London of the accident and London undertook the defense of the Bellomos in the McDermott action. The matter was amicably settled.
London has maintained, from the time it obtained knowledge of the McDermott accident, that the defendant, Allstate Insurance Company ("Allstate"), was jointly and equally liable with London for the costs of the McDermott settlement. Allstate admits insuring a 1955 Plymouth belonging to Charles Bellomo, but argues that under the pertinent provisions of Charles Bellomo's insurance policy with it, Allstate is an excess insurer; as such, it is under no obligation to reimburse London in any amount, since the settlement of the McDermott action was within the policy limits of London's insurance policy issued to Angelina Bellomo.
London candidly concedes that Charles Bellomo was an additional insured under his mother's policy by reason of the following language which is found in Part I, "Persons Insured," section (a) (2) of the plaintiff's policy with Angelina Bellomo:
"The following are insureds under Part 1:
(a) With respect to the owned automobile,
(2) any other person using such automobile, provided the actual use there of is with the permission of the named insured; * * *"
The dispute between London and Allstate centers around an interpretation of the following language in their respective policies:
"Other Insurance: If the insured has other insurance against a loss covered by Part 1 of this policy the company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss; provided, however, the insurance with respect to a temporary substitute ...