APPEAL (1) from an order of the Supreme Court at Special Term (GAVAGAN, J.), entered November 28, 1952, in New York County, which granted a motion by the third-party defendant for summary judgment dismissing the third-party complaint under rule 113 of the Rules of Civil Practice, and (2) from the judgment entered thereon.
Benedict Ginsberg of counsel (Michael M. Platzman with him on the brief; Benedict Ginsberg, attorney), for defendant and third-party plaintiff-appellant.
David A. Ticktin of counsel (Jacob Goodman with him on the brief; Powers Kaplan & Berger, attorneys), for third-party defendant-respondent.
The third-party plaintiff, Jersey Trucking Service, Inc. (which will be called 'Jersey'), is engaged in the trucking business. On February 2, 1946, it received from another trucker and loaded upon its trucks a quantity of merchandise, shipped by a number of consignors for delivery to various consignees in the city of New York. That night trucks and merchandise were stolen from Jersey's garage.
Notice of the theft was given promptly to the third-party defendant insurance company, which had issued a so-called merchandise floater insurance policy, insuring Jersey upon its liability as a carrier for loss or damage that might be caused under the circumstances operative here; that is, for loss or damage to merchandise owned by others while in the custody of the assured. According to Jersey, the insurance company during the next three years investigated the claims, negotiated with the owners of the goods and assured Jersey it would 'effect settlement with the claimants, without requiring anyone to institute suit.' Negotiations proved fruitless. More than three years after the theft an action was commenced against Jersey by the assignee of the various owners of the stolen merchandise.
The summons and complaint were turned over immediately to the insurance company, which as promptly returned them, disclaiming liability. A few weeks after joinder of issue in the primary action Jersey served the third-party summons and
complaint on the insurance company, asserting that if held liable to plaintiff it may recover under the policy.
Over three years later plaintiff moved for summary judgment against Jersey, Jersey in turn moved for summary judgment against the insurance company, and the lattter cross-moved for judgment dismissing the third-party complaint. Special Term denied the first two motions, but granted the third-party defendant's cross motion for summary judgment and dismissed the third-party complaint. Jersey appeals from this order of dismissal.
Special Term's decision was based on a holding that the time within which suit could be instituted on the policy had run, by reason of the following provision in the policy: 'No suit or action on this Policy for the recovery of any claim, shall be sustainable in any court of law or equity * * * unless commenced within twelve (12) months next after the happening of the loss'.
The insurance company contends that the date of the 'happening of the loss' was the date of the theft of the merchandise in 1946, and that Jersey's time in which to bring suit had therefore elapsed. Jersey, the assured, claims that under the terms of the policy, it will suffer no 'loss' until required to pay a judgment and cost of litigation; and that its time to sue has therefore not yet begun to run.
The insurance company argues that this is a policy contracting to indemnify Jersey against its liability for specified loss or damage. The loss contemplated under such a policy comes into being immediately upon the occurrence of the theft and remains constant until extinguished by payment or otherwise. Jersey claims, on the other hand, that the insurance company contracted to indemnify it against actual loss it might sustain through the payment of money for claims covered by the policy provisions, and that such loss does not arise until such payment is made. The two types of insurance coverage are often labeled loosely as liability and indemnity ...