Court Opinion

ID: 3571633
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:24:41.258936+00
Date Added: 2024-06-11T13:49:11.505815
License: Public Domain

On Rehearing.
Although appellant had won a reversal, we have granted her motion for rehearing, in which she asks that we go on and decide the question of misjoinder, one of great *Page 582 
public importance, necessary of ultimate decision in this case, and fully argued.
There is inaccuracy in the statement of the original opinion that appellee American Fidelity  Casualty Company was surety on the bond of the other appellees. It had issued a policy indemnifying them against loss and damage from injuries to third persons, such as that claimed in this case. In one respect only the policy itself contemplates a direct liability to the public. If, because of bankruptcy or insolvency of the assured, a judgment against them on a claim covered by the policy cannot be satisfied by execution, "the judgment creditor shall have a right of action to recover the amount of such judgment against the company (the insurer) to the same extent that the assured would have had to recover against the company had the assured paid the said judgment."
By indorsement or rider the contract assumes quite a different form. It states that the policy is written and is to be construed in accordance with N.M. Laws 1929, c. 129, and rules and regulations of the State Corporation Commission adopted thereunder, and that it is subject to all the provisions thereof.
Then, by the rider, "* * * the insurer * * * agrees to pay any final judgment within the limits set forth in the schedule * * * for injury to and/or death of persons * * * resulting from the ownership, maintenance or use of any and all motor vehicles pursuant to a certificate of public convenience and necessity issued by the Corporation Commission of New Mexico."
Laws 1929, c. 129 (1929 Comp. St. ch. 11, art. 10 [section 11-1001 et seq.]), generally regulates the business of operating motor vehicles as common carriers. Section 5, in so far as here important, reads:
"No certificate of public convenience and necessity shall be issued by the corporation commission to any motor carrier until such motor carrier shall have filed with said commission and obtained its approval of either a surety bond or policy of insurance issued by some company authorized to do such surety or insurance business in this state, guaranteeing the payment to the public of all losses and damages proximately caused by the negligence or wilful misconduct of such motor carrier, its servants or agents, in not less than the following amounts, to-wit: * * *
"All such bonds or insurance policies shall provide a guarantee of payment of all loss or damage caused as aforesaid by any such vehicle operated upon the highways of this state in the conduct of the business of the motor carrier therein named, whether or not such vehicle be specified in such bond or policy, and shall be for the benefit of and subject to immediate suit or action thereon by any person who shall sustain actionable injury or loss protected thereby, notwithstanding any provision in said bond or policy to the contrary; and every such bond or insurance policy so given shall, in any suit or action, be conclusively presumed to have been given *Page 583 
according to and to contain all the provisions of this act." 1929 Comp. St. § 11-1005.
The ultimate liability of the insurer to one injured by the negligence of the assured is not questioned. The contention is that, since the insurer was not a party to the negligence, and since its liability is contractual only, and since its agreement is merely to pay a final judgment recovered for the tort, there is no joint cause of action; and that the two causes of action, one in contract and the other in tort, and the insurer and the assured as parties defendant, are improperly joined in this cause.
A great many authorities are brought to our attention. These we need not refer to here. There is no contention that the Legislature could not authorize joinder of parties and causes in such a case as this. The question is whether it has done so. It is one of statutory construction, and no controlling decision has been found.
One provision of section 5, supra, is to our minds decisive: "All such * * * policies * * * shall be for the benefit of and subject to immediate suit or action thereon by any person who shall sustain actionable injury or loss protected thereby. * * *"
There is no point of time to which "immediate" can reasonably relate except the time of sustaining the injury. The occurrence of an actionable injury or loss protected by the policy immediately, without intervening time or event, gives the right to sue.
It is strongly urged that the right to sue is immediate upon a judgment becoming final against the tort-feasor. So to hold would require some refinement of reasoning, and would withhold from the public benefits of a remedial statute which we cannot doubt the Legislature intended to confer.
True, other language of the section, technically taken, is calculated to express a secondary liability on the part of the insurer. Either its technical meaning must yield or the Legislature must be deemed to have declared that both the primary and the secondary liability may be tested by immediate suit.
It is only "actionable injury or loss protected" by the policy for which immediate suit may be brought. We do not consider this to mean or to warrant the holding that whether there was in fact an injury or loss, whether such injury was actionable, and whether protected by the policy, are questions first to be adjudicated against the tort-feasor. The Legislature was assuming, just as we now assume, a cause of action. It was dealing with the right to sue. It made the right immediate.
The right to sue immediately does not necessarily imply the right to sue jointly. The statute does not expressly give the latter, and general principles oppose it. So, it is urged, interpreting "immediate" as we do, we must hold that the insurer could be sued singly, and, even then, we would not be warranted in holding that it could be sued jointly.
The conclusion we think unsound, disregarding the correct course of arriving at the rights of the parties. We reason thus: *Page 584 
We look to the contract as controlling except as to provisions which are inconsistent with those of the statute. Where there is inconsistency, the latter control, according to both statute and contract.
The contract, in so far as it covers public liability, is a mere agreement to pay a final judgment obtained against the assured. It creates a secondary liability. As it stands there, both the liability to pay and the liability to be sued are postponed until a final judgment for the tort shall have been obtained.
Here the statute comes in. It prevents postponement of the liability to be sued. It does not prevent postponement of the liability to pay. Sued singly, the insured may validly object that its liability to pay is dependent upon adjudication against the tort-feasor. But, objecting, as it does here, to being sued jointly, the right of the injured party to sue immediately is controlling. Varying the contract only so far as the statute requires, giving the injured party all that the statute gives her, and taking from the insurer nothing that the statute does not take, the result is that there may be an immediate suit to which both insurer and assured are parties defendant, but not an immediate suit against the insurer alone. This statutory resultant is a status intermediate primary and secondary liability.
The argument we have just attempted to answer has been influential in some courts, considering other statutes. Smith Stage Co. v. Eckert, 21 Ariz. 28, 184 P. 1001, 1004, 7 A.L.R. 995. Even if we could not answer it to our satisfaction, and if we were as strongly impressed as was the Supreme Court of Arizona that to permit suit, judgment, and satisfaction against the insured alone would be unfair and unreasonable, we should still feel constrained to disregard it; such is the force of "immediate," as here employed. The very fact that there has been so much controversy over this question of joinder, with lines so closely drawn, suggests that the Legislature sought and inserted a word, not found in other statutes, which it thought would settle the matter.
So we conclude that the demurrer was not good in its several points wherein it challenged appellant's right to adjudicate in a single action the liability of the tort-feasor and of the insurer.
There remain to be considered the specifications under the proposition that the complaint fails to set forth facts constituting a cause of action. These points are made: (1) Failure to allege that the automobile in question was being operated only or at all for transportation of passengers for compensation at the time of the injury; (2) failure to allege that the automobile was in the passenger and/or express service; (3) failure to allege that the automobile was being operated pursuant to a certificate of convenience and necessity; (4) failure to allege that the automobile was being operated on a route authorized by the Corporation Commission.
In urging the necessity of such allegations, the casualty company points to provisions of *Page 585 
the policy, limiting liability. With these we are not concerned. They affect the insurer's liability to indemnify the assured. In that matter the public is not interested. We look to the rider and the statute.
By the rider, the insurer agrees to a liability for injury or death resulting from use of any motor vehicle pursuant to a certificate of convenience and necessity. By the statute the liability is for "all loss or damage caused as aforesaid by any such vehicle operated upon the highways of this state in the conduct of the business of the motor carrier." "Caused as aforesaid" means "proximately caused by the negligence or wilful misconduct of such motor carrier, its agents or servants."
The complaint sets forth the issuance of certificate of convenience and necessity No. 44, to Capital Stages, Inc., and its transfer to appellee Charles T. Townsend, and the commission's approval of the transfer. The policy runs to Scenic Stages, Inc., and/or Charles T. Townsend. The complaint alleges, in paragraph 8, that the assured were, at the time in question, "engaged in running his, their or its stages, coaches and automobiles, as a public carrier, for the transportation of persons as passengers between the cities of Santa Fe and Roswell * * * as authorized by said certificate. * * *" Then, by paragraph 9, that the assured were operating the automobile in question at the time of the injury "in the manner and for the purposes and under the certificates set out in paragraph 8 hereof."
This we think sufficiently answers points 1 and 2.
Perhaps by inadvertence, the complaint confuses the actual transfer of the certificate of convenience and necessity with the approval thereof, saying "said transfer being endorsed on the back thereof, and is in words and figures as follows," and then setting forth the words and figures of the approval by the Corporation Commission. But the validity of the transfer is not here involved. Both the Corporation Commission and the casualty company recognized it. We think this sufficient as to point 3.
Point 4 is emphasized. The place of the injury is set forth in the complaint as "the street or highway entering the City of Santa Fe from Roswell * * * and within the limits of the City of Santa Fe." This, it is urged, does not sufficiently fix the place as being on the route authorized by the certificate, viz., "over state highways 2 and 41 and U.S. highways 70 and 470, between Roswell and Santa Fe and intermediate points, including Estancia."
There are two implications from the argument: That the policy liability ceased on arriving at the Santa Fe city limits; or that it ceased if the stage company operated on any other street than an "official routing" of one of the highways mentioned in the certificate. It is claimed that the policy does not "cover operations while picking up or delivering passengers within the city limits * * * where the risk of accidents would necessarily *Page 586 
be much greater than on the open road." It is said to be "readily apparent that such a limitation on liability is one which would have a direct bearing on the premium rate under which the insurance would be written; that it is therefore a substantial portion of the insurance contract, and one entitled to be respected by the courts."
How the "limitation on liability" referred to might affect a claim of the insured for indemnity we need not consider. If there is such a limitation on public liability, the protection is far from adequate. According to the contention, just when the public's risk becomes greatest, its protection ceases.
It is inconceivable that the authorization is merely to operate between the city limits of the two towns mentioned as termini. Whether any rule or regulation of the Corporation Commission adopted under the statute forbids deviating from the regular route to receive or deliver passengers, we do not know. Nothing we have seen in the statute prohibits it. "Public Highway" is defined to include city streets. Section 1 (e) of the act (1929 Comp. St. § 11-1001 (e). "Fixed Termini" or "Regular Route" is defined as "the termini between which, or the route over which such motor carrier shall usually or ordinarily operate, though departures from such termini or route may be periodical or irregular." Section 1 (i) of the act (1929 Comp. St. § 11-1001 (i).
Of course, the expression "pursuant to a certificate of convenience and necessity," as used in the rider, does not mean that a violation of the operating rules or rules of the road is to relieve the insurer from liability. Such violations perhaps most often occasion the injury.
The complaint fairly shows that the vehicle was being operated on the highways of this state in the conduct of the motor carrier's business. The motor carrier was operating as a common carrier of passengers under authority of a certificate of convenience and necessity, if not at the moment in strict conformity to its requirements. That is sufficient.
The judgment will be reversed and the cause remanded with a direction to overrule the demurrer. It is so ordered.
SADLER, HUDSPETH, and ZINN, JJ., concur.