Opinion
April 24, 1950.
Appeal from Supreme Court, Kings County, NORTON, J.
George I. Janow for appellant.
Milton M. Eisenberg and Ralph Weller for respondent.
The third-party complaint alleges the issuance by appellant to respondent, the third-party plaintiff, of the warehouseman's liability policy attached to that pleading; the commencement of the action against respondent for loss or damage of goods stored in respondent's warehouse; due performance of all terms and conditions of the policy by respondent; disclaimer by appellant, upon the ground that the claimed loss was not covered by the contract of insurance, and appellant's liability under the policy for any recovery against respondent in that action.
It is the contention of appellant that Condition F of the policy prohibits the impleading of appellant. That Condition F provides: "No action shall lie against the company unless the assured shall have fully complied with all the conditions hereof, nor until the amount of the assured's obligation to pay shall have been finally determined either by judgment against the assured after actual trial or by written agreement of the assured, the claimant, and the company, nor in either event unless suit is instituted within two years after the date of such judgment or written agreement. Any claimant or his legal representative who has secured such judgment or written agreement shall thereafter be entitled to recover under the terms of this policy in the same manner and to the same extent as the assured. Bankruptcy or insolvency of the assured shall not relieve the company of any of its obligations hereunder."
Condition K of the policy provides: "Any specific statutory provision in force in the state in which the assured's premises designated in item 2 of the declarations are located shall supersede any provision or condition of this policy inconsistent therewith." Item 2 of the declarations located assured's premises at 390-8 Nostrand Avenue, Brooklyn, New York.
By paragraph I of the statement of agreements or obligations of the appellant under the policy it contracted to pay all sums which the assured shall become liable to pay by reason of the liability imposed by law upon the assured as a warehouseman or bailee for loss or damage to property stored in assured's premises; and by paragraph II thereof it contracted "to defend in the assured's name and behalf, any suits or other proceedings which may be brought against the assured to enforce such claims".
Clearly the appellant is a party "who is or may be liable to him [the assured] for all or part of the plaintiff's claim against him * * *." (Civ. Prac. Act, § 193-a.) It may not be held under the policy that by disclaiming liability the insurance company may prevent its assured, whom it has contracted to defend, from determining his rights under the policy by direct action for declaratory judgment ( Globe Ind. Co. v. Sterling Stewart Corp., 257 App. Div. 1027, affd. 283 N.Y. 582), or by third-party complaint in an action for loss or damage against the assured. ( Judy Negligee, Inc., v. Portnoy, 194 Misc. 508.)
Condition F of this policy may be construed as intended compliance with clause (b) of subdivision 1 of section 167 Ins. of the Insurance Law, which requires such a policy to provide for the protection of a person sustaining loss or damage in the event judgment against the assured remains unsatisfied; and, further, as prohibiting actions by such person against the company until the claim against the assured has been liquidated by agreement or by judgment against assured.
Upon the policy as a whole, Condition F is sufficiently doubtful, indefinite and inconclusive to warrant construction against appellant. ( Hartol Products Corp. v. Prudential Ins. Co., 290 N.Y. 44, 49.) Had condition F been intended to prohibit either declaratory judgment action or third-party practice by the assured, it should have so stated. ( Birnbaum v. Jamestown Mut. Ins. Co., 298 N.Y. 305, 313.)
The order should be affirmed, with $10 costs and disbursements.
Condition F provides that "No action shall lie against the company unless * * *". I find no warrant for inserting in the clause the words "by the claimant" so as to limit the unequivocal words "no action". This is a contract between the insured and the insurer, and they would not, of course, attempt to bind a future claimant whose rights are fixed by statute. The paragraph makes specific reference to the assured and is clearly intended to affect the assured. ( Litman v. Garfinkle, 193 Misc. 256.) Further, section 193-a of the Civil Practice Act is a procedural statute designed for the expeditious disposition of the work of the courts and the avoidance of multiplicity of actions. It calls for the exercise of the court's discretion, for by its terms the court may dismiss a third-party complaint "to further justice or convenience". It has been held that "Evidence that the defendant in an action for negligence was insured in a casualty company, * * * is incompetent and so dangerous as to require a reversal * * *." ( Simpson v. Foundation Co., 201 N.Y. 479, 490.) Here the jury must not only be apprised of the fact that the defendant is protected by an indemnity policy, but may be called upon to decide whether under the policy the third-party plaintiff shall have a judgment over against the indemnity company. I see no difference in principle involved in this situation and that involved in the disclosure to a jury in a negligence action. Condition K refers to "specific statutory" provisions and has reference only to laws regulating contracts of insurance.
CARSWELL, Acting P.J., JOHNSTON, SNEED and MacCRATE, JJ., concur in Per Curiam opinion; WENZEL, J., dissents and votes to reverse the order and to grant the motion, with memorandum.
Order denying motion of third-party defendant to dismiss the third-party complaint on the ground that it does not state facts sufficient to constitute a cause of action, affirmed, with $10 costs and disbursements. [See 277 App. Div. 796.]