Respondent was injured in an automobile accident by being struck by a car owned by one Joseph H. Bennett. At the time of the accident the owner was seated on the front seat on the right-hand side of his car which was being driven by his son, Bertram Bennett, a boy fourteen years and six months of age. Joseph H. Bennett, the owner, was insured under a liability policy issued by appellant which contained the following clauses:
"This insurance is subject to the following conditions, and failure on the part of the assured to comply therewith or with the provisions of any endorsement attached to this policy shall forfeit the right of the assured or of any judgment creditor of said assured to recover hereunder * * *.
"2. Exceptions. The assured will not * * * permit any * * * motor vehicle [covered hereby] to be operated (a) by any person under the age limit fixed by law or under the age of fourteen in any event, or who for any reason is not permitted by the laws of the State of New York to operate or drive motor vehicles * * *."
Respondent sued Joseph H. Bennett, the owner, and recovered a judgment. The appellant insurance company disclaimed liability under its policy on the ground that the car was being operated by a person under the age fixed by law and did not take part in the defense of the action. An execution on the judgment against Bennett, the owner, having been returned unsatisfied, respondent brought this action to recover of appellant under its policy issued to Bennett. A jury was waived, the facts stipulated, and the trial court rendered a verdict of no cause of action. Respondent appealed to the Appellate Division which reversed by a divided court and judgment was ordered in favor of respondent.
The Appellate Division, in reversing, decided that the appellant, by virtue of section 109 of the Insurance Law (Cons. Laws, ch. 28), is liable under the policy for the acts of the driver, even though such driver while operating *Page 479 the car was under sixteen years of age, was violating the law and guilty of a crime.
By section 109 of the Insurance Law every policy of automobile liability insurance is required to be construed as insuring the owner "against liability for damages for death or injuries to person or property resulting from negligence in the operation of such motor vehicle, in the business of such owner or otherwise, by any person legally using or operating the same with the permission, express or implied, of such owner." In interpreting that section we have decided that an injured third party has, by virtue thereof, no greater rights against an insurer than are possessed by the insured.
"The effect of the statute is to give to the injured claimant a cause of action against an insurer for the same relief that would be due to a solvent principal seeking indemnity and reimbursement after the judgment had been satisfied. The cause of action is no less but also it is no greater." (Coleman v. New AmsterdamCasualty Co., 247 N.Y. 271, 275.)
In Taylor v. United States Casualty Co. (269 N.Y. 360), decided at the present term, we dealt with the question of the proper interpretation of a policy clause providing against liability while the car was being operated by a person "under the age fixed by law" where the car at the time of the accident was being operated by a boy under eighteen years of age but holding a junior operator's license for which the legal age limit was sixteen years. We there held the insurer liable to injured third parties, although the operator at the time of the accident was violating the terms of his license, but the question presented in that case was one of policy coverage, and under the facts the insurer would have been liable to the insured.
We have already indirectly passed upon the question here involved and in effect have held the insurer not liable where the terms of the policy excluded liability *Page 480 while the car was being operated by a boy under the age of sixteen years. (Rohan v. Hartford Accident Indemnity Co.,266 N.Y. 545.)
Section 109 of the Insurance Law, as we have repeatedly held, does not prevent a limitation of coverage. As said in Brustein v. New Amsterdam Casualty Co. (255 N.Y. 137, 143): "A reasonable construction of the provision in question is that the policy must be read as if it contained an extended liability clause, but that it may be limited in amount and coverage as the parties may agree." As to provisions which are illegal seeBakker v. AEtna Life Ins. Co. (264 N.Y. 150).
In the case at bar the coverage was limited by the provision for exclusion from liability while the car was being operated by any person "under the age limit fixed by law." The operator being under such age, the policy did not cover and the insurer did not agree to indemnify the owner against liability for injuries to persons occurring while the car was being operated by such a person, and by issuing a policy containing that clause it did not incur liability to third persons injured while the car was being so operated. By that clause in the policy that risk was excluded from coverage. (Draper v. Oswego County Fire Relief Assn.,190 N.Y. 12, 17.) Section 109 of the Insurance Law does not have the effect of extending the liability of the insurer to cover such operation of the car so as to permit a recovery by injured third persons where the policy excludes liability to the owner.
The judgment of the Appellate Division should be reversed and that of the Trial Term affirmed, with costs in this court and in the Appellate Division.
CRANE, Ch. J., LEHMAN, O'BRIEN, LOUGHRAN and FINCH, JJ., concur; CROUCH, J., not sitting.
Judgment accordingly. *Page 481