Court Opinion

ID: 3601351
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:47:43.599713+00
Date Added: 2024-06-11T13:46:50.963238
License: Public Domain

The Insurance Law, in section 109, among other things provides as follows, with reference to policies of insurance against loss or damage resulting from an accident caused by an automobile: "No such policy shall be issued or delivered in this state on or after July first, nineteen hundred and twenty-four, to the owner of a motor vehicle, by any corporation or other insurer authorized to do business in this state, unless there shall be contained within such policy a provision insuring such owner against liability for damages for death or injuries to person or property resulting from negligence in the operation of such motor vehicle, in the business of such owner or otherwise, by any person legally using or operating the same with the permission, express or implied, of such owner."
This law is mandatory, and any insurance company which issues a policy without this provision violates the law. Should the provision be omitted, the courts will read into the policy this provision in order to give effect to this salutary regulation. When the contract of insurance is made and the policy is issued it is made in contemplation of this law, which immediately becomes part of it. If this be not so the door is open for fraud, subterfuge and deception. The insurance company may refuse the risk, refuse to issue its policy, but, once having done so, section 109 attaches to it, and the mere failure to recite this provision in the policy will not obviate its effect. If this be so it stands to reason that no agreement between the insurance company and the insured can modify the law. The purpose of the provision is apparent. It is made for the benefit of persons injured or suffering damage and not solely for the benefit of the insured. The latter may be one of the reckless impecunious kind, as is so often the case, indifferent to a judgment against *Page 154 
him and execution-proof. In other words, he may have no property to respond to money damage. The Legislature has sought to meet this difficulty by providing that when the insurance company insures an owner of an automobile it must also assume the risk of damage caused by one operating the car with the owner's consent.
If the insurance policy in this case had contained a clause exempting the insurance company from liability for any damage caused by an automobile driven by the owner's servant or by a person using it with his consent, clearly it would have been illegal; it would have rendered the statute nugatory and useless. Any agreement which limits the full force and effect of this statute is illegal. To say that the insurance does not cover the instance of the automobile being driven with the owner's consent unless he also be present, is such an illegal limitation. It is directly contrary to the mandate of the statute. It has the same effect as a provision that the insurance does not cover the instance of any person driving the car with the owner's consent. This law cannot thus be limited by the agreement of the parties.
Such in effect are the illegal provisions of the policy in question. They have limited this policy to cover cases only where the owner himself is driving the car or he is present in the car with the person who is driving it. What becomes of the law which requires the insurance company to insure against damage caused by one operating the car with the owner's consent, even when he is not present? It is wiped out by this agreement; the insurance company has undertaken not only to violate the law but to qualify it. The owner is not obliged to insure in all instances nor is any insurance company obliged to issue a policy to everybody making application, but when the policy is once issued and the risk assumed, section 109 of the Insurance Law states specifically what this risk shall be.
An owner may have many cars and may legally take *Page 155 
insurance on only one. He may be in business and seek insurance for his business vehicles and not for his pleasure cars. He may be in business in different places and insure a car only when it is used in a particular place or in a particular business. Many are the limitations which may be placed upon a risk without violating the law. His consent, even, may have its limitations, for the statute speaks of consent express or implied, and if there be neither of these, then the owner and the insurance company are not liable. Such are the legal limitations found in cases like Lavine v. Indemnity Ins. Co. (260 N.Y. 399);Brustein v. New Amsterdam Casualty Co. (255 N.Y. 137);Coleman v. New Amsterdam Casualty Co. (247 N.Y. 271).
Where, however, the policy is issued to cover the operation of the automobile doing damage there is one specific instance upon which no limitation can be placed by agreement, and that is, the operation of the car with the express or implied consent of the owner. If he has consented to the operation of the car at the time and place the insurance company must pay the damage if the owner cannot. This mandate of the Legislature takes effect in spite of all exceptions or even in the absence of a recital in the policy of the provisions of section 109.
To my mind the distinction is quite clear between an insurance which is limited to car, to place or to business and one which seeks to escape full force and effect of section 109 by excepting the risk on the insured car when operated with the owner's consent but in his absence.
For these reasons I am for affirmance.