Jacobs v. U.S. Fidelity & Guaranty Co.

• Decision Date: 24 April 1956
• Citation: 152 N.Y.S.2d 128,2 Misc.2d 428
• Parties: Annie JACOBS, Plaintiff, v. UNITED STATES FIDELITY and GUARANTY COMPANY, Defendant.
• Court: New York Supreme Court

Page 128

152 N.Y.S.2d 128

2 Misc.2d 428

Annie JACOBS, Plaintiff, v. UNITED STATES FIDELITY and GUARANTY COMPANY, Defendant.

Supreme Court, Special Term, New York County, Part III.

April 24, 1956.

I Frank Miller, Brooklyn, (Anthony Zangara, Brooklyn, of counsel), for plaintiff.

John J. O'Connor, New York City (C. Francis Giaccone, New York City, of counsel), for defendant.

BENVENGA, Justice.

Plaintiff moves for summary judgment under Rule 113, Rules of Civil Practice. The action is on a public liability insurance policy issued by defendant to Dave Jacobs and Max Jacobs, doing business as Tivoli French Shoppe, Borough of Manhattan, City of New York.

In March, 1952, plaintiff suffered injuries on the premises of Tivoli Shoppe and instituted an action in negligence against David Jacobs, one of the partners, charging him with negligence. Plaintiff did not sue Max Jacobs, the other partner. Concededly, Max Jacobs is plaintiff's husband and David Jacobs her brother-in-law. Defendant disclaims liability on the ground that the policy contains no express provision covering personal injuries to the spouse of a partner.

The issue involves the construction of Section 167, subd. 3, of the Insurance Law, which, so far as pertinent, provides: 'No policy or contract shall be deemed to insure against any liability of an insured because of * * * injuries to his or her spouse * * * unless express provision relating specifically thereto is included in the policy.'

1. The statute, of course, is to be read in the light of the previous state of the law, the circumstances that led to its enactment, the evil it was designed to correct and the remedy intended. Black, Interpretation of Laws, 2d Ed., 285; Standard Accident Ins. Co. v. Newman, Sup., 47 N.Y.S.2d 804, 814-816.

At common law, and in the absence of statute, one spouse could not maintain an action against another for personal injuries sustained through the negligence of the other, Schubert v. August Schubert Wagon Co., 249 N.Y. 253, 255, 164 N.E. 42, 64 A.L.R. 293. In 1937, the legislature amended Section 57, Domestic Relations Law, so as to give him a right of action. Consequently there is no longer any doubt as to the right of one spouse to sue the other for personal injuries. People v. Morton, 308 N.Y. 96, 98, 123 N.E.2d 790, 791; Fuchs v. London & L. Indemnity Co., 258 App.Div. 603, 606, 17 N.Y.S.2d 338, 340.

When the Legislature in 1937 amended Section 57, Dom.Rel.Law, supra, it also amended Section 167 (formerly Sec. 109), Ins. Law, supra. As braring upon the intention of the legislature in amending Section 57, supra, and Section 167, supra, it is important to consider the cases of Schubert v. August Schubert Wagon Co., 249 N.Y. 253, 164 N.E. 42, supra, and Caplan v. Caplan, 268 N.Y. 445, 198 N.E. 23, 26, 101 A.L.R. 1223, both of which were decided prior to the said enactments.

The Schubert case (upon which plaintiff relies) was an action against a corporation for personal injuries sustained by plaintiff through the negligence of her husband in driving a corporation automobile while engaged in the business of the corporation. In holding that the action was maintainable, the Court said that 'The disability of wife or husband to maintain an action against the other for injuries to the person is not a disability to maintain a like action against the other's principal or master.'

The Caplan case (upon which defendant relies) was an action against a partnership of which plaintiff's husband was a member, to recover for personal injuries sustained by plaintiff through the negligence of her husband in driving a partnership automobile while engaged in the business of the partnership. It was held (1) that, inasmuch as no such action could be maintained by a wife against her husband, no such action was maintainable against a partnership which includes her husband, unless the action be against all the partners to enforce their joint liability; and (2) that, inasmuch as 'partners are liable for the acts of a copartner in a business carried on by them jointly only within the field where liability is joint', a partner of the husband could not be held individually liable.

The Caplan case was reviewed in some of the leading periodicals. Some of the commentators were of the opinion that the views of the dissenting judges followed 'more nicely' the spirit of the doctrine laid down by Cardozo, C. J., in the Schubert case. In any event, they recommended legislation giving the husband and wife remedies for wrongs against each other, 21 Cornell L.R. 161, 166; 22 Va.L.R. 473-474.

This was the state of the law when the Legislature enacted the 1937 amendments, supra. Clearly, the intent of the Legislature amending the law was twofold: (1) to permit one spouse to maintain an action for negligence against the other; and (2) to protect insurance carriers against collusive actions between husband and wife. Fuchs v. London & L. Ind. Co., 258 App.Div. 603, 605, 17 N.Y.S.2d 338, 339; Standard Accident Ins. Co. v. Newman, Sup., 47 N.Y.S.2d 804, 808-809, affirmed 268 App.Div. 967, 51 N.Y.S.2d 767, 268 App.Div. 1039, 52 N.Y.S.2d 948; Katz v. Wessel, 207 Misc. 456, 458, 460, 139 N.Y.S.2d 564, 566, 568; Feinman v. Bernard Rice Sons, Inc., Sup., 133 N.Y.S.2d 639. Moreover, the effect of the 1937 amendments was to abrogate the principle of the Caplan decision, making it no longer applicable. Consequently, the law now, as I view it, is in harmony with the opinion of the dissenting judges in the Caplan case and the spirit of the doctrine of the Schubert case.

2. Be that as it may, the issue here is the interpretation of a policy of insurance. Admittedly, the policy, is not to be deemed to insure against any liability of any 'insured' for injuries to his or her spouse, unless such liability is expressly included therein.

The term 'insured' as defined by the policy includes the 'named insured' (that is, 'Tivoli French Shoppe, Dave Jacobs and Max Jacobs D/B/A'), and 'also any partner, executive officer, director or stockholder while acting within the scope of his duties as such'. Clearly, this definition of 'insured' is broad enough to cover the partnership, the partners specifically named, and any partner of those named while acting within the scope of his duties. This definition must be given force and effect; it must not be given a restrictive meaning. It seems to me that the definition would be meaningless unless the insurer intended thereby to undertake 'separate and distinct obligations' not only as to Tivoli Shoppe, but also as to each and every one of the partners. Consequently, while the...