John Wanamaker, New York, Inc. v. Otis Elevator Co.

• Decision Date: 24 February 1920
• Docket Number: (Action No. 1.)
• Citation: 126 N.E. 718,228 N.Y. 192
• Parties: JOHN WANAMAKER, NEW YORK, Inc., et al. v. OTIS ELEVATOR CO.
• Court: New York Court of Appeals Court of Appeals

228 N.Y. 192

126 N.E. 718

JOHN WANAMAKER, NEW YORK, Inc., et al.

v.OTIS ELEVATOR CO.

(Action No. 1.)

Court of Appeals of New York.

Feb. 24, 1920.

Action by John Wanamaker, New York, Incorporated, and another, against the Otis Elevator Company. From a judgment of the Appellate Division, affirming a judgment for plaintiffs (186 App. Div. 655,175 N. Y. Supp. 78), defendant appeals by permission of the Appellate Division (176 N. Y. Supp. 905).

Modified, and, as modified, affirmed.

See, also, 126 N. E. 721.

Crane, J., dissenting.Appeal from Supreme Court, Appellate Division, Second department.

Charles A. Boston, of New York City, for appellant.

Frank Verner Johnson, of New York City, for respondents.

HOGAN, J.

The plaintiff, John Wanamaker, New York, Incorporated, hereinafter referred to as the Wanamaker Company, has been for years engaged in conducting a department store in the city of New York. On April 27, 1909, one of the elevators in said store, manufactured and installed by the defendant in October, 1907, pursuant to a contract between defendant and the Wanamaker Company, fell, due to a break of two iron straps designed and used for the support of the hoisting cable of the elevator.

One Matilda Rumetsch, together with other patrons of the store, was in said elevator, and sustained injuries. She thereafter brought an action against the Wanamaker Company to recover damages for such injuries. Notice of the commencement of the action was given defendant, and it was requested to come in and defend the same. Defendant did not, however, participate in the defense of the action, which thereafter proceeded to trial and resulted in a verdict against the Wanamaker Company for $16,000. Judgment was entered upon the verdict for damages, $16,000, and costs, $223.87. On July 29, 1912, an appeal was taken from the judgment to the Appellate Division by the Wanamaker Company and on January 10, 1913, an order therein was entered, reversing the judgment of the Trial Term and granting a new trial; costs to abide the event. Rumetsch v. Wanamaker, N. Y., Inc., 154 App. Div. 800, 139 N. Y. Supp. 385. The plaintiff thereupon perfected an appeal to this court, and, after argument of said appeal, the order of the Appellate Division and judgment thereon was reversed, and the judgment of the Trial Term affirmed, with costs in this court and the Appellate Division, which were taxed at $503.69, and judgment thereafter was entered December 23, 1915.

The plaintiff, General Accident Fire & Life Assurance Corporation, Limited, of Perth, Scotland, hereinafter designated as the Assurance Company, had issued a policy of liability insurance to the Wanamaker Company, whereby it agreed to indemnify the Wanamaker Company from any loss, by reason of the liability imposed upon it by law, for damages on account of bodily injuries accidentally sustained by passengers riding in the aforesaid elevator, the liability for such indemnity being limited to the amount of $5,000 for injuries sustained by one person, and to defend any suits which might be brought against the Wanamaker Company on account of such injuries, and to pay in addition to the aforesaid indemnity the costs taxed against the Wanamaker Company in any legal proceedings so defended, and all expenses incurred in the conduct of such defense. The policy also provided:

‘In case of payment of loss under this policy the corporation [Assurance Company] shall be subrogated to all claims or rights of the assured in respect of such loss against any person or persons and the assured shall execute any and and papers required and shall co-operate with the corporation to secure to it said rights.’

The Assurance Company, as required by the terms of the policy contract, which was in force at the time of the accident, defended the Wanamaker Company in the action against it, and prosecuted and defended the appeals therein. The original judgment having been reinstated by the decision of this court (Rumetsch v. Wanamaker, N. Y. Inc., 216 N. Y. 379, 110 N. E. 760, L. R. A. 1916C, 1245), the Wanamaker Company and Assurance Company on December 29, 1915, were compelled to pay to Matilda Rumetsch, in satisfaction of the judgments and interest thereon, the sum of $20,523.02. Of said sum the Assurance Company paid $6,906.33 as indemnity for the loss imposed upon the Wanamaker Company by reason of its liability for damages on account of injuries to the said Matilda Rumetsch, which sum to paid included the amount of the indemnity, $5,000, with interest thereon together with the taxable costs of the action. The balance, $13,616.69, was paid by the plaintiff Wanamaker Company. This action was brought by the Wanamaker Company and the Assurance Company to recover the amounts so paid by them. The plaintiff Assurance Company also sought to recover the sum of $3,613.92 expended by it for counsel fees in the defense of the action. The judgment herein awards to the Wanamaker Company $13,616.69, and interest thereon from the date of payment by it, December 29, 1915, and to the Assurance Company $10,520.25, which sum represents the indemnity of $5,000, with interest thereon, together with taxable costs, and in addition the sum of $3,6000.92 counsel fees in the defense of the action, with interest on $2,558.02 from December 29, 1912, and on $1,055.90 from December 29, 1915.

Upon the argument of this appeal counsel for appellant urged that, as no privity existed between defendant and the Wanamaker Company, defendant owed no duty to that company; consequently a recovery in favor of the latter cannot be sustained. The argument cannot prevail.

To facilitate a trial of the action, counsel for the parties entered into a written stipulation, reciting a number of facts, which were practically all embodied with other facts in the findings made by the trial justice. It was stipulated, amongst other facts, that it was established, upon the trial of the action of Rumetsch v. Wanamaker, that the fall of the elevator car in which she (Rumetsch) was riding as a passenger was due to the breaking of two certain iron straps designed and used for the support of the lifting cables of the elevator, and that these straps broke because they were wrongfully designed, constructed, and installed, and therefore insufficient and inadequate in strength to perform the work imposed upon them in the ordinary operation of the elevator in question; that the two certain iron straps were designed and installed on the premises by the defendant for the support of the lifting cables of said elevator, and turned over to the Wanamaker Company for its use as a passenger elevator having a carrying capacity of 2,500 pounds, on or about the 29th day of October,...