My study of the statute convinces me that the Legislature defined the liability of the insurer as secondary.
It seems to be the view of the majority that, if the insurer is sued singly, its liability is secondary. Finding nothing in the statute on the subject of joinder, and general principles opposing it, I am unwilling to agree that the circumstance of joining the tort-feasor converts the statutory secondary liability into a primary one. I think the statute means the same thing all the time.
I agree with the majority that, "sued singly, the insured may validly object that its liability to pay is dependent upon adjudication *Page 587 against the tort feasor." This being so, it is apparent that the further statement in their opinion that: "There is no point of time to which `immediate' can reasonably relate except the time of sustaining the injury," is incorrect.
I agree that the purpose of employing the word "immediate" is to indicate an elimination of time and event between some point of time and the right to sue.
Being convinced that the liability of the insurer is secondary under the statute, the idea of the right to sue the insurer jointly with the tort-feasor is repelled.
The majority reach their decision through the force they ascribe to "immediate," as employed in the statute, and say that other language of the section, technically taken, as calculated to express a secondary liability on the part of the insurer, must yield to "immediate." Under my view, it was not necessary that there be any yielding of one expression of purpose in the section to another. I relate "immediate" to a different point of time than do the majority, and, by so doing, other portions of the section are not destroyed. My approach is similar to theirs, but I reach a different result. As is said, the very fact that there has been so much controversy over this question of joinder, with lines so clearly drawn, suggests that the Legislature sought and inserted words not found in other statutes, which it thought would settle the matter. In fixing the liability of the insurer, it required the filing and approval of a policy of insurance"guaranteeing the payment to the public of all losses and damages proximately caused by the negligence or wilful misconduct of such motor carrier," and that the insurance policy "shall provide a guarantee of payment of all loss or damage caused as aforesaid," etc.
The language "guarantee of payment" is easily understood. In Ellis v. Stone, 21 N.M. 730, 158 P. 480, L.R.A. 1916F, 1228, this court held that, where a contract provides in effect for the payment of notes executed and to be executed by others in favor of the parties named in the contract, in the event that the makers default in the payment of the notes in accordance with the terms mentioned in them, the promise is collateral to the principal obligation of another, and is not a direct promise, without condition or independent contingencies, to pay the debt referred to, and is therefore a guaranty within the meaning of the law. See, also, 28 C.J. Guaranty, § 1.
Guaranty of payment, as employed in this section, means that the guarantor will pay if the tort-feasor does not, and not that it will pay if the tort-feasor cannot. The latter situation would have been appropriately described by the expression "guaranty of collection." Section 8 of the article on Guaranty, 28 Corpus Juris, states: "Although one of the meanings of the word `guaranty' is `indemnify' or `save harmless', and the word `guaranty' may be used to create an obligation to indemnify one against loss, there are important differences between a contract of guaranty and one of indemnity. A guaranty *Page 588 being a collateral undertaking presupposes some contract or transactionas principal thereto; while a contract of indemnity is original and independent, to which there is no collateral contract and with respect to which there is no remedy against the third party. In an indemnity contract the engagement is to make good and save another from loss upon some obligation which he had incurred or is about to incur to a third person, whereas in a guaranty the promise is to one to whom another is answerable."
In the note to the foregoing text, the following statement is made of the distinction: "There is a well-understood difference between a guaranty of payment, and a contract of indemnity against loss, as the result of the non-payment of a debt. In the first case the liability of the guarantor is fixed by the failure of the principal debtor to pay at maturity, or at the time when payment was guarantied. In the second the contract partakes of the nature of a guaranty of collection, no liability being incurred until after, by the use of due and reasonable diligence, the guarantee has become unable to collect the debt from the principal debtor." Burton v. Dewey, 4 Kan. App. 589, 46 P. 325; Osborne Co., D.M., v. Lawson, 26 Mo. App. 549." The books are full of similar definitions. See Words and Phrases.
There is no reason to suppose that the Legislature did not know the meaning of the language "guaranteeing the payment" and "guarantee the payment," and that they are defined by the lexicographers and law writers as implying a secondary liability.
Since "guaranty of payment" means that the insurer shall pay if the tort-feasor does not, it might have been feared that the expression would be confused with "guaranty of collection" which latter would postpone the liability of the insurer until due and diligent but unsuccessful efforts of the judgment creditor had been made to collect his judgment. Again, it might be contended that, since even "guarantee the payment" being a promise to pay if the tort-feasor does not, a suit could not be commenced until demand had been made by the judgment creditor upon the tort-feasor judgment debtor for payment of the judgment and payment refused. So the Legislature said that the insurance policy "shall be for the benefit of and subject to immediate suit or action thereon by any person who shall sustain actionable injury or loss protected thereby."
We all agree that the insurer could not be required to pay until the loss and damage has been adjudicated in an action against the tort-feasor. The provision for "immediate suit" eliminates "time or event" between such adjudication and suit by the injured person against the insurer. To my mind, "immediate" thus reasonably relates to the time it is ascertained that there has been loss or damage protected by the policy of insurance. As said by the Arizona Supreme Court in Smith Stage Co. v. Eckert: "It also appears from what we have said that the words `loss and damage' mean a real loss — *Page 589 one, at least so far as the indemnity company is concerned, that has been put into judgment against the assured."
This is evidently the construction placed upon the act by the Corporation Commission in formulating the New Mexico indorsement or rider. The rider states: "* * * The insurer * * * agrees to pay any final judgment within the limits set forth in the schedule * * * for injury to and/or death of persons * * * resulting from the ownership, maintenance or use of any and all motor vehicles pursuant to a certificate of public convenience and necessity issued by the Corporation Commission of New Mexico."
This rider does not require the showing of a failure of the tort-feasor to pay a final judgment nor even a demand for payment of such judgment as a condition precedent to the payment by the insurer of such judgment. This rider seems to construe "immediate" as eliminating the intervention of time or event between the rendition of final judgment against the tort-feasor and the attaching of liability to the insurer. Such liability attaches immediately upon the rendition of the judgment. At that instant, the liability of the insurer becomes fixed. The failure of the insurer to discharge this liability gives rise to a cause of action against it, in the sense that a cause of action is the remedy and "immediate suit" may be brought against it. I cannot discover that the Legislature intended to require a contract imposing a duty upon the insurer under certain circumstances and provided also for a suit against it in advance of a breach of such contract. The majority say the statute "does not prevent postponement of the liability to pay," yet permits suit before the breach of the postponed duty. I confess I do not follow them. So I find that the promise in the rider is consistent with the statute, and that such promise therein to pay the judgment is equivalent to guaranteeing the payment of loss and damage.
That the Corporation Commission, which is charged with the duty of approving such policies of insurance, thought it meant the same thing, is apparent from its approval of the policy of insurance. It is a familiar rule of statutory construction that: "The contemporaneous construction placed upon a statute by the officers or departments charged with the duty of executing it, is entitled to more or less weight, especially if such construction has been made by the highest officers in the executive department of the government * * * and, while not generally controlling, where the case is not extreme and no vested rights are involved, such construction should not be disregarded or overturned except for the most cogent reasons, and unless clearly erroneous. Even where the executive construction is unsupported by law, it will be disturbed only when the issues presented require it. Contemporaneous construction within the meaning of the rule, is the construction which the executive departments or officers charged with the enforcement of the statute give to it at or near the time of its enactment." (As in the present case.) See 59 C.J. Statutes, § 609. *Page 590
This consideration is strengthened by the fact that the rider was prepared and adopted with the approval of the Attorney General, who is the legal advisor to the Corporation Commission.
The original policy of insurance provides that, in case insolvency or bankruptcy of the assured shall occur, "and an execution on a judgment recovered in a suit against the assured covered by this policy is returned unsatisfied, the judgment creditor shall have a right of action to recover the amount of such judgment against the company (insurer) to the same extent that the assured would have had to recover against the company had the assured paid said judgment."
Section 71-162, Comp. St. 1929, requires companies licensed to transact an insurance business in this state to file forms of its policies with the insurance department. An examination of forms of a number of such companies on file in that department and in the office of the Corporation Commission discloses that policies of many such companies contain provisions very similar to those quoted in this paragraph. I have no reason to doubt that the Legislature, in enacting chapter 129, N.M. Laws 1929, were cognizant of such provisions, and intended that the provision authorizing "immediate suit" should serve to eliminate the conditions of execution on a judgment against the assured returned unsatisfied as a condition precedent to the arising of a right of action against the insurer.
The majority say the construction I have proposed would withhold from the public benefits of a remedial statute which they do not doubt the Legislature intended to confer. Such benefit, I take it, is the avoidance of a possible additional lawsuit. By the terms of the original policy of insurance, it is provided that upon the occurrence of an accident the Assured shall give notice thereof to the insurer, and, if a claim is made on account of such accident, the assured shall give like notice thereof, and, if thereafter any suit is brought against the assured to enforce such claim, the assured shall immediately forward to the insurer every summons or other process as soon as the same is served, and the assurer agrees to defend in the name of and on behalf of the assured any such suit. In Cannon Ball Motor Freight Lines v. Grasso, 59 S.W.2d 337, 343, the Court of Civil Appeals of Texas, in an opinion handed down in February this year, considering the question of joinder in such cases, answered the argument of supposed benefit to the public of joinder, and, deciding against it, said:
"It has been held that, where an insurance company comes into a suit, furnishes its own attorneys to defend the suit, examines and cross-examines witnesses, argues to the jury, and participates in the trial as fully as if it were a party, after the plaintiff has secured a favorable verdict from the jury, he may by motion in the original suit have judgment over and against the insurance company, as the law treats as parties all real parties to the litigation, whether technically parties or not. In other words, by participating in the proceedings, one is estopped by the judgment as to any question actually litigated and *Page 591 decided therein. Haines v. West, 101 Tex. 226, 105 S.W. 1118, 130 Am. St. Rep. 839; 15 R.C.L. §§ 481, 483. Thus it is not necessary to name the insurance company in the original suit to avoid a multiplicity of suits."
If the assured should fail to notify the insurer, or in any respect fail to comply with its agreements with the insurer, such failure to so comply would be no defense to a suit by the public to compel the insurer to pay the judgment because the rider formulated to comply with the statute contains an unconditional promise to pay the judgment. So I think the supposed public benefit of joinder is more imaginary than real. Since it does not appear that any attack could be made by the insurer upon the judgment which the motor carrier might not itself make, I am not apprehensive of delay, since ordinarily the insurer would be penalized for the delay by being required to pay interest on the judgment.
On the other hand, the Texas Court in the same case, considering another argument of convenience, said: "The question is raised as to what injury will result if the insurance company is joined. In Bergstein v. Popkin, 202 Wis. 625, 233 N.W. 572,575, the court said: `Whether or not it is an indictment of our jury system, it is a fact recognized by everyone that the purpose of making the insurance company a party defendant is to increase the award of damages made against the insured. That it has that effect, no one familiar with the trial of cases can doubt.'"
When I contemplate the objections to joinder, and the fact as the majority concede that general principles oppose it, and having in mind the rule of statutory construction that we are to reconcile seeming inconsistent provisions of a statute, and endeavor to harmonize them, I cannot interpret "immediate" as nullifying the language used earlier in the section importing secondary liability of the insurer and ascribe to the Legislature an intent to set aside general principles controlling joinder of actions and parties, when it did not expressly nor by necessary implication do so, and when I find a field for the operation of "immediate" which comports with the legislative policy declared earlier in the section and does not upset general principles.
Entertaining great respect for the opinions of my associates, I find myself in disagreement with their views in this case, which, as is said, is one of great public importance. Therefore I dissent.