Court Opinion

ID: 3601350
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:47:43.593675+00
Date Added: 2024-06-11T13:46:50.965405
License: Public Domain

The infant plaintiff, George M. Bakker, was injured through the negligence of the driver of a car belonging to and used with the permission of James D. Ryan and recovered judgment against Ryan for $30,000. The father, Simon Bakker, recovered judgment for $4,000 for loss of services. Ryan is insolvent *Page 156 
and, the executions having been returned unsatisfied, this action is brought under section 109 of the Insurance Law against the present defendant as insurer of the car. Summary judgment for $10,172.35 in favor of the infant and $4,000 in favor of his father has been unanimously affirmed and the appeal comes here by leave of this court.
An endorsement on the policy provides: "New York State Endorsement. * * * Pursuant to the requirements of Chapters 639 and 534 of the Laws of 1924, State of New York, the insuranceprovided by this policy against liability for personal injuries or death shall cover the liability of the owner of the motor vehicle therein described for negligence in its operation, in the business of such owner or otherwise, by any person legally using or operating the same with his permission, express or implied, to the extent that liability is imposed upon him by said laws." By another endorsement on the policy "it is agreed that the automobiles described herein shall be personally driven only by James D. Ryan or by any person within the age limit provided by the policy when accompanied by such named driver." A third endorsement reads: "It is further provided that the assured or any other person covered by the policy shall reimburse the company for payments made on account of any accident, claim or suit involving a breach of the terms, provisions or conditions of the policy, which payments the company would not have been obligated to make under the provisions of the policy independently of this endorsement or of the provisions of said article."
The accident occurred while the car was driven with Ryan's consent, but the person driving it was not accompanied by him. Clearly, therefore, the condition of the second endorsement above quoted was violated. Reading together the three endorsements, the effect is that, under the circumstances, operation of this car was not covered. The owner is liable without recourse. Unless this agreement is contrary to the law of this State, no redress under *Page 157 
157 section 109 of the Insurance Law is available to plaintiff against this defendant.
We think that the conditions in the endorsements do not violate section 109 of the Insurance Law nor, as far as we can see, any other law of this State. In New York owners of motor vehicles, except those used for hire, are free to remain uninsured. Our Legislature has not yet provided for compulsory insurance. If an owner voluntarily secures indemnity for himself against liability for damages for injuries to person or property, the policy must contain a provision covering negligence by a person operating the vehicle with the owner's permission. But this provision need not be unrestricted or unqualified. The parties may agree upon the amount and the coverage. They are not obliged to include all personal injuries. (Brustein v. New Amsterdam Casualty Co.,255 N.Y. 137.) There is no reason to infer that the legislative purpose was to compel the insertion in the policy of stricter protection against negligent acts of a driver than of an owner. Under section 109 an injured claimant can obtain from the insurer only such relief as would be due from the insurer to a solvent principal who had satisfied a judgment. (Coleman v. NewAmsterdam Casualty Co., 247 N.Y. 271.) Surely Ryan, if he had paid these plaintiffs' judgments against him, could have no cause of action against this defendant for, under the facts of this case, the policy did not cover him. There was a breach of condition. The conditions and limitations concerning a driver may be reduced to as narrow a compass as those covering the named assured. The parties may restrict coverage in many ways, for example, when the owner's consent extends only to the use of the car by another in the owner's business at a particular location or for pleasure. (Lavine v. Indemnity Ins. Co., 260 N.Y. 399. ) The owner of an automobile for hire may, by his contract of insurance, restrict its coverage to the use of the car in connection with social functions, shopping trips, *Page 158 
touring and similar work and may exclude coverage for operation for hire at stands, hotels, stations, on public highways or other public resorts and provide that the car shall not be used in short haul and trip work at standard fares. In an action under section 109 of the Insurance Law the insurer is not liable for a judgment obtained against the insured for negligence by one driving the car even with the permission of the assured when, in violation of these conditions, he is carrying a passenger picked off the street. (Dileo v. Eagle Indemnity Co., 263 N.Y. 646.) Since these things may be done, we can see no violation of the statute when the consent is limited to a time when the owner accompanies the driver. When a car is insured for use only in a limited territory there is no insurance covering its use elsewhere and the owner is not bound by section 109 to provide for indemnity against negligence of one using the car with his permission in another locality. In the case before us the car is covered only when it is occupied by the owner. By the endorsement herein "the insurance provided by this policy" covers both the owner and the driver but only when the owner occupies the car. Otherwise no insurance is provided. In his absence, it covers neither one. Both are treated alike. The policy "must be deemed limited in amount and coverage as set forth in the contract agreement." (Lavine v. Indemnity Ins. Co., 260 N.Y. 399,407.) Under section 109 it is only when insurance exists that the policy must also cover negligence of one driving with the owner's permission. If a broader policy is desirable it is the function of the Legislature to devise it.
The third endorsement above quoted does not in our opinion constitute an attempt to evade the New York statute. The parties, while recognizing the limited scope of the coverage, apparently were unable to satisfy themselves as matter of law that the courts of this State would exempt the insurer from liability to a third party, even in the event of a breach of condition by the assured *Page 159 
and by one driving with the consent of the assured. Therefore, if the insurer shall be compelled to pay a third party when the assured breaches the conditions of the policy, this endorsement constitutes nothing more than an agreement for reimbursement to the insurer.
The judgments should be reversed and the motion denied, with costs in all courts.
LEHMAN and CROUCH, JJ., concur with POUND, Ch. J.; CRANE, J., concurs in separate opinion; O'BRIEN, J., dissents in opinion in which HUBBS, J., concurs; KELLOGG, J., not sitting.
Judgment affirmed.