Court Opinion

ID: 5218074
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:27:35.995468+00
Date Added: 2024-06-11T08:27:28.273415
License: Public Domain

Ingraham, P. J.
(dissenting):
When this case was before this court on the former appeal (132 App. Div. 241) it was expressly held that the action was not commenced within the time provided in the policy, and I do not see that any additional facts have been presented upon this trial which question the conclusion there arrived at.
The accident which was the basis of this litigation occurred on June 6, 1896, and an action to recover for that-accident was barred by the Statute of Limitations three years thereafter. (Code Civ. Proc. § 383, subd. 5.) By the terms of the policy no action would lie against the defendant after June 6, 1899, unless at that time there was a suit arising out of such accident pending against the plaintiffs, in which case an action can be brought against the defendant within thirty days after final judgment was rendered in such action and not later. On June 6, 1899, there were actions pending against the plaintiffs on account of the accident, and the time within which this action could be brought was thus extended until thirty days after a final judgment was rendered in such actions and not later. These actions, however, were not prosecuted to *506judgment, but on June 24 and July 1, 1902, orders discontinuing such actions were entered- by consent, and by these orders the actions were finally terminated. Thereafter no judgment cohid be entered in these actions or either of them, and plaintiffs were relieved from direct liability on account ,of the accident. The plain intent of this exception was to give to the plaintiffs the right to commence an action. against the defendant to recover for any liability which was incurred iq consequence of a judgment in an action pending at the time that the statute woul drun against the insured. Upon the discontinuance of tlie actions brought by the person injured there -could be no recovery by such person against the plaintiffs. The attorney for the defendant had assumed to defend those actions against the plaintiffs by the person injured, and after the person injured had obtained the judgment against the Phoenix Bridge Company the satisfaction of that judgment would have relieved the plaintiff from any liability; and as the .time. within which an action by the person injured against the plaintiff could have been commenced had expired no such action could have been subsequently instituted. It seems that the Phoenix Bridge Company also had a policy of insurance with the defendant, and the same attorneys who represented the plaintiffs in the action by the person injured also represented the Phoenix Bridge Company in the litigation between the person injured and that corporation which arose out of the accident, and the defendant, recognizing its. obligation under its policy with the' plaintiffs,, had assumed to defend them in-the action brought by the person injured and her husband against the plaintiffs. It seems to me, therefore, that the defendant was only performing its obligation when it procured the action against these.plaintiffs to be discontinued, and thus .relieve these plaintiffs from any liability to the person injured arising out of the accident upon which that cause of action was based. It is quite true that up to the time of the discontinuance of the action the defendant was defending the plaintiffs in the attempt that had been made to charge them with responsibility for this accident. The plaintiffs had no concern with that defense as the defendant was bound to indemnify them for any loss- that they sustained in consequence of the accident. That defense had been assumed by the defendant and successfully accomplished., and plaintiffs were relieved from *507liability to the person injured. Prior to April, 1902, the attorneys for the defendant the Phoenix Bridge Company paid the amount for which they were liable to the Plicenix Bridge Company; these attorneys withdrew from the defense of the -action, and Messrs. Robinson, Biddle & Ward wTere substituted for the Phoenix Bridge Company. The substituted attorneys wrote to plaintiffs notifying them of the pendency of the action of Bernard Johnston v. Phoenix Bridge Co., and that plaintiffs must come- in and defend that action. A day or two after plaintiffs received this notice they called with it upon Mr. Nadal, the attorney for the defendant who had assumed plaintiffs’ defense of the actions brought by the Johnstons against the plaintiffs and delivered that notice to Mr. Nadal. Mr. Nadal told plaintiffs that the case had got so snarled up that there was nothing for him to do but to stand by and let it unsnarl itself. Plaintiffs then asked Mr. Nadal to defend that action, which he evidently refused to.do. Here was distinct notice to the plaintiffs that Bernard Johnston had sued the Phoenix Bridge Company for damages sustained by the - accident; that plaintiffs were required to assume the defense of the action. The action by Bernard Johnston against the plaintiffs had not then been discontinued and I think that because of the relations existing between the plaintiffs and the Phoenix Bridge Company the action pending against the Phoenix Bridge Company was, when this notice was received, an action pending against the plaintiffs within the meaning of this policy. As the plaintiffs were liable to the Phoenix Bridge Company for any recovery in that action, the. refusal of the defendants to interpose for the defense of the plaintiffs in that action was undoubtedly a breach of its contract. But the plaintiffs then had notice that a suit was pending for which they would become liable for. any judgment that was obtained against the Phoenix Bridge Company; that the defendant was no longer defending the Phoenix Bridge Company, and that defendant had- repudiated its obligation to defend the plaintiffs in that action. The plaintiffs, however, abandoned any attempt to defend that action and it resulted in a judgment against the Phoenix Bridge Company, which was in effect a judgment against the plaintiffs. That judgment was entered May 10, 1902, and under the'terms of this policy as I read it the plaintiffs had thirty days after the ■ entry of that *508judgment to bring this action. The fact that the plaintiffs had neglected the defense of that action and had no notice of the date when that judgment was entered is entirely immaterial. It was the duty of the defendant to have defended it, and they must be charged with notice of the terms of their policy. It was because of their obligation to the Phoenix Bridge Company and the notice that had been given them of the pendency of the action that they became the .substantial defendants therein, and they must be charged with notice of the time' of entry of that judgment and of the fact that the time within which to sue. the defendant for any liability that was imposed upon it by that judgment expired thirty days after it was entered. Thus on June 9, 1902, the time within which the plaintiffs could maintain an action against the defendant to recover for any liability based upon the Bernard Johnston judgment expired. As before stated, the actions of Bernard and Kate Johnston against these plaintiffs were at that time still pending, but on the' 24th of June or the 1st of July, 1902, these actions were discontinued, and there could be no further liability against the plaintiffs on account of these actions. Subsequently and on June 3, 1902,’ the Phoenix Bridge Company brought this action against the plaintiffs to recover the judgment obtained by Bernard Johnston against the Pluenix Biidge Company and the' complaint in that action alleged the contract made between the plaintiffs and the Phcenix Bridge Company; that one Kate Johnston had been injured in consequence of the negligence of the defendant in the prosecution of the work under that contract; that Bernard Johnston, the husband of the said Kate Johnston, had brought an action in the Supreme Court against the Phcenix Bridge Company to recover for the damages that he sustained in consequence of the injury of Kate Johnston ; that the Phcenix Bridge Company had given timely notice to the defendants therein of the trial of the said action, and invited them to be present and to take part therein; and that these' plaintiffs were liable to the Phoenix Bridge Company to repay the amount of that, judgment to the Phcenix Bridge Company. At that time the time within which the plaintiffs could have sued the defendant had not expired, and plaintiffs had full knowledge of all of the facts which would* justify them in commencing an action against the defendant to recover the amount of that judgment. Ko such action was com*509menced. The plaintiffs, however, took this summons and complaint to the attorney for the defendant on June 9, 1902, and demanded that defendant defend that action. This request the defendant refused, and on the same day their attorney wrote the plaintiffs stating that the summons and complaint were returned to the plain-, tiffs, as the defendant declined to take any action in reference to the matter. The position of the defendant, therefore, was then definitely defined, and I think an action brought by the plaintiffs against the defendant on that day to recover the amount of that judgment would have been within the time allowed by the policy. Ho such action was brought, however, until after the action of the Phoenix Bridge Company against the plaintiffs had been determined, and the judgment had been not only affirmed by the Appellate Division but by the Court of Appeals. The judgment in the.action of the Phoenix Bridge .Company against the plaintiffs was entered on January 26, 1904; affirmed by the Appellate Division, on March 31, 1905; final judgment on the remittitur from the Court of Appeals was entered June 25,1906; and this action was commenced July 3, .1906.
I think- the plaintiffs were barred from commencing this action on June 9,1902, but by no possible construction of this policy could that time be extended for more than thirty days from the date of the entry of judgment in the case of the Phoenix Bridge Company against the plaintiffs, entered January 26, 1904, which would be February 25, 1904. There was no question of estoppel, for before the time had actually expired the defendant expressly repudiated its obligations to defend either the Bernard Johnston action against the Phoenix Bridge Company or the action brought by the Phoenix Bridge Company against these plaintiffs.- Plaintiffs then knew that the defendant had repudiated its obligation, and they must look out for themselves, and the defendant was entitled to the benefit of the provisions of the policy which limited the time within which an action could be commenced against it under the policy.
I think, therefore, that upon the former appeal in -this action in 132 Appellate Division, 241, and upon the facts as they appear upon this trial the defendant was entitled to a dismissal of the complaint, and the judgment in favor of the plaintiffs should, therefore, be reversed.