Gottlieb v. American Automobile Insurance ( 1939 )

The reasons for concurrence in the judgment of the court will be stated.

The contract of insurance must be determined by its terms, and, in the absence of fraud, duress or mistake, the whole policy must be examined to ascertain from the words used the meaning and intent of the parties with reference to the subject matter. The contract set forth in the declaration is not ambiguous except in one particular. It is a contract between two separate corporations, whose several and distinct corporate existence is not affected by the temporary incidents of the alleged common ownership of the stock of the two legal entities, and the identity of their corporate officers, and official management. Each one of these corporations is engaged in a particular form of insurance. The one offers to insure the owners of motor vehicles by its contract against liability for any loss for which an owner may become responsible as a result of the infliction of injury to the property of a third person through the operation of the assured's motor vehicle. The other offers similar insurance to protect the assured from liability for injury to the person of a third party.

The plaintiff in this action desired insurance against both kinds of liability. The two insurance carriers undertook to give him such insurance by a single instrument in consideration of the payment of a separate premium by the assured to the common agent of both insurance companies. The contract, therefore, certainly covered three plain and probable contingencies, since, from the nature of things, the occasion of liability may arise either where there is bodily injury solely, or property damage wholly, or there is contemporaneously a combination of both bodily injury and property damage.

The subject matter of the combined policy is, therefore, threefold. The paper writing offered and accepted is explicit, if the assured is brought within the contemplation of the policy as a result of a liability for a "bodily injury" alone or for a "property damage" solely. In either of these two probabilities a particular assurer is specified, and its liability under the policy is not joint, nor joint and several, but several exclusively. As stated, these two coverages and the particular insurance carrier liable are plainly and unequivocally expressed in terms of the contract. In these two instances the intention is so plainly stated that the use of rules of construction is superfluous.

The third phase of liability under the contract is not so free of difficulty. No specific provision is made for the procedure and form of recovery by the assured, if his liability within the policy is for both bodily injury and property damage to a third party should both ensue the act of nonfeasance, misfeasance or malfeasance of the party assured. Thus a problem of construction is made whose resolution must be undertaken by the court.

The insurance issued is a contract of liability to the extent of the limited amount of loss against which the policy is written. The intention of the parties to assure against liability for loss which resulted from bodily injury and property damage, whether inflicted at once or successively, through the operation of the assured's automobile is the paramount purpose of the contractual parties. An awareness of the ever imminent probability that both forms of injury covered would be combined in the single right of action of a third party must be imputed, from the frequency of the occurrence of this situation, as must also be the common knowledge that neither the assured nor the assurer could control the pleadings of the third party whose action against such an assured would seek and recover by a verdict in solido an amount which would be compensatory for both forms of injury. Balto. O.R. Co. v. Ritchie, 31 Md. 191, 198; Berkley v. Wilson, 87 Md. 219, 39 A. 502; Washington, B. A. Electric R. Co. v. Cross, 142 Md. 500, 512, 121 A. 374. SeeUnderwood v. Dooley, 197 N.C. 100, 147 S.E. 686, as reported and annotated in 64 A.L.R. 656-674. If either party to the contract may be said to bear in greater degree the weight of this actual or imputed knowledge, it would be the insurance carrier because of its wider experience, technical knowledge, and expert judgment in the matters of insurance risks and the terms and effect of the policies which it frames with respect to the perils against which the insurance was issued. While the written contract remains the best and only admissible evidence of what the contract is with respect to all the matters which it purports to cover, to the exclusion of all parol contemporaneous evidence, except as it may be qualified by the doctrines of waiver and estoppel, and while the court is not at liberty to make a new contract for the parties, nor arbitrarily to disregard reasonable limitations set forth in the policy, nevertheless it is not a variation in the terms of the policy to consider the nature of the risk insured, and, with respect to a matter upon which the policy is silent, so construe it as to make its scheme reasonable and to protect the assured. Richards on Insurance (4th Ed.), sec. 74; Willistonon Contracts (Rev. Ed.), secs. 620, 629; Phoenix PadManufacturing Co. v. Roth, 127 Md. 540, 544, 96 A. 762; AbucTrading Sales Corp. v. Jennings, 151 Md. 392, 135 A. 166.

With these principles in mind, the facts alleged show a coverage of liability for both bodily injury and property damage, and a recovery for both forms of damages out of a single cause of action, brought against the defendant, which the defendants engaged by their covenants to defend and which, it was stated in argument, the assurer did, in fact, defend. So, there is here no question of the assured's right of action, nor even of the liability of the assurers, but merely whether their combined liability is enforceable in an action at law after a judgment wherein the respective amounts awarded for bodily injury and damage to property are undistinguishable in the verdict and judgment for a single sum of money. As the judgment against both assurers is one for the aggregate of the respective liabilities of the assured in a sum within the limits of the amounts which they agreed to pay, and is a judgment which is a result of conditions within their contemplation but in reference to which they made no specific procedural provision, it is reasonable to conclude that the assurers intended to be bound jointly under these circumstances, and to leave for their own determination the measure of the apportionment to each of their combined liability with reference to the assured. It would seem unreasonable to suppose that when the risk involved is assured, the usual means of enforcing the right of the assured and the liability of the assurer are to be excluded from the contemplation of the parties. Williston on Contracts (Rev. Ed.), sec. 629.

As observed by Lord Sumner in Becker v. London Assur. Corp. [1918 H.L.], L.R. 101, 112: "I dare say few assured have any distinct view of their own on the point, and might not even see it, if it were explained to them, but what they intend contractually does not depend on what they understand individually. If it is implicit in the nature of the bargain, then they intend it in law just as much as if they had said it in words." Anson, Contracts (Corbin), sec. 353, pp. 424, 425.Selected Readings on the Law of Contract, pp. 872, 873, In thus holding that under the facts of this record the liability of the assurers is joint, the intention of the parties is effected and the general rule of law as expressed by the old maxim ubi jusibi remedium is gratified. If the remedy at law did not exist it would have to be invented. The novelty of the right is said to be no objection "for if men will multiply injuries, actions must be multiplied too." Ashby v. White, 1703, 2 Ld. Raym. 938. per Holt, C.J., at p. 955. An action on the case is most often the solution of new instances which are not new in the principle upon which they depend. Knickerbocker Ice Co. v. Gardiner Co.,107 Md. 556, 563, 69 A. 405.

There is no legal difficulty in a contract whereby the performance of one promise may be by the joint action of all the promisors; and that of another, by only one of them. Moreover, it is a general presumption of law that when two or more persons undertake an obligation that they undertake jointly. So, words of severance are necessary to overcome this primary presumption. Williston on Contracts (Rev. Ed.), secs. 316, 320, 322, 324; United States Printing Lithograph Co. v. Powers, 233 N.Y. 143, 152, 136 N.E. 225;Philadelphia v. Reeves, 48 Pa. 472; 13 C.J., secs. 549, 552, 561, pp. 573-575.

In the instant case, appropriate words of severance are employed in those instances when separate and distinct liability arises for bodily injury or for property damage, but words of severance are not used to meet the contingency of liability arising under both kinds of risks incurred at once to a third party as the result of a single happening. In the last instance, it would follow that the liability of the assurers, and, so, the action, is joint. Supra. See, generally, United State Fidelity Guaranty Co. v. Williams, 148 Md. 289, 306, 129 A. 660; FirstNat. Bank v. Maryland Casualty Co., 142 Md. 454, 459, 460,121 A. 379, 30 A.L.R. 618; McElvoy v. Security Fire Ins. Co.,110 Md. 275, 279-281, 73 A. 157.

While the theory of the substantial identity of the assurers upon which the declaration is drawn would seem untenable, sufficient facts are alleged to show an apparent liability of both defendants to the plaintiff under the combined policy.