Opinion
No. 4404.
Argued May 3, 1955.
Decided June 22, 1955.
Where a motor vehicle liability policy of insurance provided that the "unqualified word insured" includes the named insured and those operating the vehicle with the insured's consent and further provided that in the event of payment by the insurer solely because of the requirements of the financial responsibility law "the insured" shall reimburse the insurer, it was deemed to be the intention of the parties that only the insured who invokes the protection of the policy should be subject to the reimbursement provision.
PETITION, for declaratory judgment to determine the rights of the parties under a combination automobile insurance policy issued by the plaintiff to the defendant Albert C. Byers.
This policy covered a certain 1950 Ford truck owned by said Albert. On June 28, 1951, this truck was involved in an accident in Franklin which caused injury to one Adeline D. Van Utt. It was being operated by Albert's son William, with Albert's permission, and was towing a trailer owned by William with which he transported lumber in the operation of his own business. An action for damages has been instituted against William by the defendant executors of said Adeline.
Paragraph III of the insuring agreement of this policy defined the insured as follows: "With respect to the insurance for bodily injury liability and for property damage liability the unqualified word `insured' includes the named insured and also includes any person while using the automobile . . . provided the actual use of the automobile is by the named insured or with his permission." Under "Exclusions" it provided that "This policy does not apply: . . . (c) under coverages A and B [bodily injury and property damage liability] while the automobile is used for the towing of any trailer owned or hired by the insured and not covered by like insurance in the company."
The policy bore a New Hampshire statutory motor vehicle policy endorsement which provided "That the policy as amended by this endorsement is a Motor Vehicle Liability Policy as defined in Chapter 122, Revised Laws of the State of New Hampshire as amended, and all policy provisions required by said chapter are hereby expressly incorporated in the policy by reference." Under "Conditions" the policy provided "Such insurance as is afforded by this policy for bodily injury liability or property damage liability shall comply with the provisions of the motor vehicle financial responsibility law of any state or province which shall be applicable with respect to such liability arising out of the ownership, maintenance or use of the automobile during the policy period, to the extent of the coverage and limits of liability required by such law, but in no event in excess of the limits of liability stated in this policy. The insured agrees to reimburse the company for any payment made by the company which it would not have been obligated to make under the terms of this policy except for the agreement contained in this paragraph."
The Court (Griffith, J.) made the following decree: "This case, by agreement of counsel, was submitted for decision on the pleadings. The Court rules on the basis of the pleadings that the insurer is obliged to defend and satisfy, within the limits of the coverage required under the financial responsibility law, any judgment secured by the plaintiffs in the pending actions. The Court further holds that the insurer is entitled to reimbursement by the insured for all sums expended in defending the said action and satisfying any judgment within the limits of the financial responsibility law."
Albert's exception to that part of the decree which charges him with liability to reimburse the plaintiff was reserved and transferred.
Wiggin, Nourie, Sundeen, Nassikas Pingree (Mr. Nassikas orally), for the plaintiff.
William D. Tribble for the defendants Byers; (by brief and orally), for Albert C. Byers.
Sulloway, Jones, Hollis Godfrey for the defendants, Damon Van Utt and Vandermoor Van Utt, co-executors, furnished no brief.
The issue to be decided is what is meant by "the insured" in that clause of the policy which provides that for any payment made solely because of the requirements of a financial responsibility law "the insured" shall reimburse the company. This clause is applicable because the truck was being operated with the permission of Albert, the named insured, towing a trailer not covered by like insurance in the company. Hence there was no coverage except for the financial responsibility law.
In paragraph III the policy states that the "unqualified word `insured' includes the named insured" and any person using the insured vehicle with his permission. It does not follow, however, that the word "insured" was intended to mean in all contexts and circumstances both the named and the additional insured. In Howe v. Howe, 87 N.H. 338, 341, this court held that while the duty of cooperation imposed by a policy upon the assured was an obligation of the husband who had sought the protection of the policy as an additional insured, it was not an obligation of the named insured, his wife, who recovered in tort against him. It was there stated that the requirements of the provision in question were "only meant to apply, in fact, they only have sensible meaning, when the assured is a defendant and when the insurer has assumed the defence."
In our opinion the same principle should apply here. A person in the position of the named insured would not reasonably understand (Fireman's Ind. Co. v. Associates, 97 N.H. 434, 436) that the obligation to reimburse was intended to be his in a case where there was no occasion for him to seek the protection of the policy, and where the liability of the company arose solely out of the negligence of an additional insured with which he was not chargeable. In other words, we conclude that the parties intended that only the insured who invokes the protection of the policy should have the obligation to reimburse the company under the clause in question. See, Risjord and Austin, Who Is "The Insured?" 5 Federation of Insurance Counsel, 52, 61 (1954).
Exception sustained.
All concurred.