Trenton Pass. R. Co. v. Guarantors' Liab. Indem. Co.

Decision Date03 June 1897
Citation60 N.J.L. 246,37 A. 609
CourtNew Jersey Supreme Court

(Syllabus by the Court.)

Case certified from circuit court, Mercer county; Gummere, Judge.

Action by the Trenton Passenger Railroad Company against the Guarantors' Liability indemnity Company. Case reserved. Judgment for plaintiff.

The declaration in this case is founded upon a written contract, whereby the Guarantors' Liability Indemnity Company indemnifies the Trenton Passenger Railroad Company against legal liability for injury to or death of persons arising by reason of casualty occurring in, upon, about, or by reason of the street railroad of the Trenton Passenger Railroad Company or its equipment to an amount not exceeding $5,000, for the injury to or death of any one employe, not to exceed $5,000 for the injury to or death of any person other than an employe and not to exceed $20,000 in respect to any one casualty whereby several may be injured or killed. It further sets out various actions against the Trenton Passenger Railroad Company for injuries which it claims fell within the contract of indemnity of the Guarantors' Liability Indemnity Company, and that those actions had been prosecuted to judgment, but that the Guarantors' Liability Indemnity Company, although requested, had not paid them in accordance with the terms of their contract. The plea was the general issue. The issue joined was tried by the court, a jury being waived. The trial judge found that the Guarantors' Liability Indemnity Company had made the contract declared upon, and that, while such contract was in force, two judgments were obtained against the Trenton Passenger Railroad Company for casualties and Injuries falling within the terms of that contract, which judgments the latter company had paid. Thereupon the trial judge reserved for the determination of the supreme court the following question of law, namely: Whether the said contract of indemnity is a valid contract, or is void as against public policy, as being a contract to indemnify the said the Trenton Passenger Railroad Company, Consolidated, against losses resulting from its negligence, or from the negligence of its agents and employes.

Argued February term, 1897, before MAGIE, C. J., and DEPUE, VAN SYCKEL, and LIPPINCOTT, JJ.

Robert S. Woodruff, for plaintiff.

MAGIE, C. J. (after stating the facts). The question reserved in this case is one of great interest, and is presented for determination for the first time in this court. The proof of the execution by the defendant company of the instrument on which the action is brought, which instrument contains plain stipulations for indemnifying the plaintiff company for losses arising from Injuries done by it to its employes or the passengers carried by it, and the proof that such losses had occurred as were thus intended to be indemnified against, sufficiently established plaintiff's right to recover the stipulated indemnity, unless the instrument is not, in the eye of the law, a valid contract. It is obvious that the trial judge entertained doubts of the validity of the instrument in question, for, although no objection appears to have been made on the part of the defendant upon that point, he has deemed it necessary to submit it for determination to the full bench. The attitude of the defendant at the trial has been maintained in this court, for its counsel has presented no argument and made no claim that the instrument is not a binding and enforceable contract. The result is that our examination of the question has not been aided by the researches of counsel maintaining its negative, but only of counsel supporting its affirmative. For this reason, I have given the question as close an examination as time would permit, lest something bearing thereon might be overlooked.

The proposition which one would assert who contested the validity of such a contract would obviously be this, namely: that a contract whereby a common carrier of passengers is to be indemnified against damages which he was required to pay for personal Injuries occasioned by his negligence, or by the negligence of his agent, is contrary to public policy, and therefore unenforceable. It is admittedly difficult, if not impossible, to formulate a satisfactory statement of what is meant by the words "public policy." Mr. Justice Kekewich declared that it does not admit of definition, and cannot be easily explained. Davies v. Davies, 36 Ch. Div. 359. That the law has recognized one sort of public policy as a foundation for its judgment at one period, and another sort at another period, is undoubted. It is amusingly shown by Lord St. Leonards in Egerton v. Brownlow, 4 H. L. Cas. 1. Speaking of a case from the Year Books, he says (on page 238): "it was on an obligation with a condition that, if a man did not exercise his craft of a dyer within a certain town— that is, where he carried on his business— for six months, then the obligation was to be void, and it was averred that he had used his art there within the time limited, upon which Mr. Justice Hull, being uncommonly angry at such a violation of all law, said, according to the book: 'Per Dleu, if he were here, to prison he should go until he made fine to the king, because he had dared to restrain the liberty of a subject.' Angry as the learned judge was at that infraction of the law, what has been the result of that very rule without any statute intervening? That the 'common law,' as it is called, has adapted itself upon grounds of public policy to a totally different and limited rule that would guide us at this day, and the condition that was then so strongly denounced is just as good a condition now as any that was ever inserted in a contract, because a partial restraint created in that way with a particular object is now perfectly legal." Another illustration occurs with respect to the obligations imposed by law founded on public policy, on common carriers of goods. Originally, they were insurers of the safety of the goods against every loss, except such as occurred by the act of God or the public enemy, and any contract relieving them of any part of that obligation was held to be void. Gradually they have been permitted to contract for exemption from some of their liability, and public policy seems now effective only to the extent of prohibiting their exemption by contract from any losses occurring by reason of their negligence and the negligence of their servants. For such losses the law founded on public policy still holds them bound. Railroad Co. v. Lockwood, 17 Wall. 357; Liverpool & G. W. Steam Co. v. Phenix Ins. Co., 129 U. S. 397, 9 Sup. Ct. 469.


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