Court Opinion

ID: 9760945
Source: CourtListenerOpinion
Date Created: 2023-08-29 01:25:07.738957+00
Date Added: 2024-06-11T07:29:18.986557
License: Public Domain

Weintraub, C. J.
(dissenting). People contract for results, presumably sensible ones. Words are mere vehicles to convey their intention. Perfect expression is rare, particularly in the composition of a general covenant when the draftsman can not foresee all cases which may call it into play. In such situations we should be careful lest we be so absorbed in the letter that we miss the purpose. I do not suggest a judge should make a better contract. Rather my point is the familiar one that literal interpretation is misinterpretation if it leads to consequences which surprise the parties.
The “omnibus clause” here provides with respect to the “owned automobile” that the persons insured are “the named insured and every resident of the same household” and “any other person using such automobile, provided the actual use thereof is with the permission of the named insured.” We are concerned with this italicized proviso. We know from reported cases that the contracting parties could not have contemplated every twist and turn and delineated in advance their understanding as to each. In the nature of the subject, broad and fluid terminology had to be employed. If we are to implement the intention of the parties we must seek the reason for the proviso and be guided by it rather than by a detached appraisal of words.
The named insured bought and paid for the protection of others who might drive his car. Conspicuous and dominating is the fact that the named insured was vested with plenary authority to determine who shall be the beneficiaries of the contract. Whether he “permitted” one or a hundred, and did so wisely or foolishly, the premium rate remained the same. He could empower his permittee to permit others to drive. Annotation 160 A. L. R. 1195, 1206 (1946). In short the carrier was paid for an agreement that the named *157insured could extend the policy coverage to whomever he pleased, so long as no other provision of the policy was offended.
It is in the light of that central fact that we should search for the reason for the proviso in question. Since the named insured’s authority to extend the coverage is unlimited, the restriction upon it should sensibly be construed to exclude only those tvhom the named insured would not want io benefit. What is the area of exclusion? A covenant which in terms protected all who might drive the vehicle would go beyond the purpose of the named insured. Specifically, he would have no desire to buy protection for a stranger who might make off with his car. To that end, it would be appropriate to cast the proviso in the very language before us. I think the proviso should be limited to essentially that situation. The carrier having written the provision, it should not be heard to advance a construction disserving the insured as against an admissible interpretation which will advance his interests. Rikowski v. Fidelity & Casualty Co., 117 N. J. L. 407, 410 (E. & A. 1937). The ultimate question should be whether under the circumstances the named insured wanted to deny policy protection. We should not dwell upon the niceties of “permission” and thereby exclude persons whom the named insured sensibly would want to protect.
Let me illustrate. Suppose a close friend or relative in need of immediate transportation should take the car under a well-founded assumption that the named insured would readily agree if he could be reached. Literally there would be no “permission” in advance of the use, and if we were oblivious to the probable purpose of the parties, coverage would be excluded. Or suppose the named insured, for the purpose of disciplining his erring son (not a member of the household and hence protected, if at all, by the clause before us) denies him the use of the - car for 30 days or during certain hours of the day. I think it would be absurd to hold the son who violated the prohibition was beyond the *158protection of the policy. That is the last thought the father would have had in mind. In brief the named insured may deny or restrict “permission” for reasons wholly foreign to insurance coverage and with no intention whatever to deny the policy protection he bought. The carrier should not be permitted to make capital of such privately motivated actions.
Here, insofar as the rather summary stipulation of facts is revealing, the named insured purchased the automobile for the exclusive use of his nephew. To all intents and purposes, the car was the nephew’s. It is fair to assume that when the nephew “was expressly prohibited by the insured from permitting other people to use said vehicle,” the named insured was merely admonishing the nephew, perhaps to the end that his investment in the vehicle might be better preserved. There is nothing in the stipulation to suggest the uncle intended to bail out the insurance carrier if his familial instruction should be violated. We can well assume what his answer would have been had the question been put to him before the car was loaned. And I see no reason why the named insured may not answer that very question after the event. Even a literal reading of the proviso would not prevent the named insured from forgiving breaches of his instructions or ratifying the unauthorized act of his nephew. Cf. United Services Automobile Ass'n v. Russom, 241 F. 2d 296, 299 (5 Cir. 1957); but see Johnson v. State Farm Mutual Automobile Ins. Co., 194 F. 2d 785 (8 Cir. 1952). It is no answer merely to say that the rights of the carrier have intervened and may not be altered by later actions of the insured. That answer would beg the question. Since the named insured is vested with plenary power to determine who shall benefit under the contract, it should not matter whether the named insured’s approval preceded or followed the use of the car. The named insured’s interest in affording that protection is no less after than before the event. To deny the authority of the named insured to forgive or to ratify is to visit consequences he surely did not want. Here the nephew is left in an awkward situation, *159to say the least. Ilis friend may not readily forgive him for the loan of an uninsured automobile. Indeed the friend may conclude the nephew should legally respond for the judgment entered against him. I of course intimate no view of the outcome of such a suit, but an action to that end would not be absurd even if it failed. And if perchance such a suit and a plaintiff’s judgment therein were held beyond the policy coverage, no one could doubt the carrier would have escaped for reasons wholly fortuitous as to it. Surely the uncle intended no such wrath to befall his nephew. He doubtless had some other sanction in mind if his instruction were disobeyed.
And what I have just said suggests still another basis for coverage even upon a narrow view of the proviso. The uncle turned the car over to the nephew for the latter’s exclusive use. It could be found that he thereby clothed the nephew with the appearance of authority to engage in so ordinary a transaction as a loan of the car to a friend. If in such circumstances the uncle sued the driver for conversion or trespass, I think he could not assert his secret restriction in the face of the appearances he created. The carrier should not be able to deny permission if the named insured is estopped to dispute it. Permission should be determined objectively, and the basis for that determination should be the circumstances the named insured created as they appeared to the driver. Permission, found in facts raising an estoppel to deny it, is well within' the contract even if it be most technically viewed.
The interpretation advanced by the carrier departs from the common sense of the situation. More than that, it lends itself to frauds upon the subsequent permittee. A named insured untutored in law and fearful that his consent might lead to his own liability for the damages in excess of the policy limits (indeed by statute in some jurisdictions he would be so liable) may well be tempted to invent a claim that he prohibited others to drive or to convert a precatory request into a binding prohibition. Still further, we should *160be mindful of the victim of the driver’s negligence, for while he may be a remote beneficiary in the thinking of the named insured, yet the Legislature has been solicitous of his plight. I refer of course to the Einancial Responsibility Law which provides that a required policy shall cover “any other person using or responsible for the use of any such motor vehicle with the express or implied consent of the insured.” L. 1952, c. 173, § 24; N. J. S. A. 39:6-46(a); Saffore v. Atlantic Casualty Ins. Co., 21 N. J. 300, 309 (1956). I understand the statute is not claimed to be applicable in this ease, but what we hold here may conceivably influence our' approach to the statutory provision. In any event we should prefer a construction of the proviso which will protect the victim while simultaneously enforcing the probable purpose of the contracting parties. See Costanzo v. Pennsylvania Threshermen, etc., Ins. Co., 30 N. J. 262, 268 (1959).
Although many reported decisions support the technical and unrealistic interpretation here advanced by defendant, there is evidence of judicial determination to reach a common sense result. Thus for example it has been held that where the permittee deviates from a prescribed route or otherwise violates restrictions upon the use permitted, the policy nonetheless covers. Costanzo v. Pennsylvania Threshermen, etc., Ins. Co., supra (30 N. J., at p. 268); Rikowski v. Fidelity and Casualty Co., supra (117 N. J. L. 407). So also it has been held that if the use is permitted it is of no moment that a restriction with respect to the identity of the operator is violated. Hardware Mutual Casualty Co. v. Mitnick, 180 Md. 604, 26 A. 2d 393 (Ct. App. 1942); cf. Loffler v. Boston Insurance Co., 120 A. 2d 691 (D. C. Mun. Ct. App. 1956); Brooks v. Delta Fire & Casualty Co., 82 So. 2d 55 (La. App. 1955); Arcara v. Moresse, 258 N. Y. 211, 179 N. E. 389 (Ct. App. 1932). It should follow that the driver would be covered in that situation since the provision before. us protects “any other person using such automobile, provided the actual use thereof is *161with the permission of the named insured.” If the proviso is thus satisfied, there is no basis to deny protection to the operator for he is embraced by the language which precedes it. Those cases reach sound results but to find the use continued to be permitted notwithstanding disregard of expressed restraints or limitations seems to me a strained exercise in semantics. I think it better to find the true purpose of the proviso, and having done so, then to say the intention of the parties would be defeated if the carrier could seize upon limitations or restrictions the named insured expressed for reasons wholly unrelated to insurance protection. But if I followed the reasoning of the cases just cited, I would nonetheless find for the plaintiff, for the stipulation of facts states the car was given the nephew for “his exclusive use, * * * was used generally by George Rogers [the nephew] for his pleasure” and “Aside from his favor to Tureekie [the nephew’s permittee] there was no advantage or benefit to either Rogers or the named insured in this use of the ear by Tureekie, except insofar as this use served Rogers’ pleasure.” The stipulation could well have been more factual and less eonclusional throughout, but still, taking the words the parties accepted, the use, being in furtherance of the pleasure of the nephew, remained a permitted one notwithstanding a breach of the restriction upon the identity of the operator. It may seem at first that this conception of “pleasure” is rather attenuated but reflection should suggest that friendships are furthered by such favors and favors are reciprocated. Moreover, the pleasure of the nephew would hardly be furthered by the unpleasantness to which I referred earlier and which the driver may well direct at the nephew for favoring him with an uninsured,vehicle. All of which is another way of saying the uncle, although for purely 'personal reasons he admonished or restricted his nephew, never intended the penalty for a violation to be a loss of insurance coverage with unhappy consequences upon the nephew he wanted to benefit.
*162I would therefore reverse the judgment.
Mr. Justice Jacobs and Mr. Justice Schettino join in this dissenting opinion.
For affirmance — Justices Burling, Francis, Proctor and Hall — 4.
For reversal — Chief Justice Weintraub, and Justices Jacobs and Sohettino — 3.