Ferriss & Eaton v. North American Fire Insurance — 1 Hill & Den. 71

Majority

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Ferriss & Eaton vs. The North American Fire Insurance Company.

Headnote

An act incorporating an insurance company, declares, that its policies, executed in a given mode, shall have the like force and effect as if under the seal of the corporation ; and that covenant or case may be brought thereon: Semble, that in a suit on such a policy, should the plaintiff declare expressly in covenant, in one count, and then add another, so constructed as to leave it uncertain whether it is in case or covenant, the defendant may treat it as the former, and demur for misjoinder of counts. •

Otherwise, however, where the declaration commences with the usual introductory words, “in a plea of a breach of covenantfor they apply to the whole declaration.

A demurrer for misjoinder of counts must be to the whole declaration; the defect cannot be reached under a demurrer to particular counts.

A condition of a policy declaring, that all fraud or false smearing shall cause a forfeiture of claims on the insurer, &c. relates solely to the preliminary proofs of loss; and in an action on the policy, a plea setting up fraud, &c. without showing that it was committed in the rendition of the preliminary proofs, is bad.

A fortiori is such plea bad, if it do not show .that the fraud, &c. was committed by the insured or some party in interest.

Doubtful, phraseology in a pleading, is to be construed most strongly against the pleader.

The defendants’ act of incorporation provided for an assignment of the subject mat- . ter insured, as well as the policy; and that notice being given to the company before loss, the assignee should have all the benefit of the policy, and might sue in his own name. E. & F. being insured, the former executed to the latter, with the company’s consent, and before loss, an assignment of all interest in the subject insured, as well as in the policy; and after loss, an action was brought on the policy in their joint names. Held, that a count in the declaration, alleging such assignment, was bad, as showing that the 'plaintiffs could not sue jointly: and a plea in bar, setting up the same facts in answer to another count, was adjudged good.

For the purposes of this suit, the plea "was, in effect, the same as a plea that both plaintiffs had assigned.

Whbther the matter might be pleaded in abatement, quere.

In assumpsit, a plea of misjoinder of plaintiffs would be bad, as amounting to the general issue; but otherwise, in covenant.

Action on a policy of insurance. The declaration commenced as in an action of covenant, thus: “ The N. A. F. Ins. Co. (defendant) was summoned, dec. to answer N. Ferriss and J. E. Baton (plaintiffs) in a plea of breach of covenantdec.

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The first count set out a policy of insurance of $5000 on the plaintiff’s stock of goods, dated December 14th, 1837, signed by the president and countersigned by the secretary of the insurance company, with proferí; and the count called the policy a deed poll, but averred no seal.

The second count was on a like policy generally, (with proferí,) without calling it a deed, or averring that it was under seal. This count averred that the plaintiff Eaton, with the defendants’ consent, regularly sold all his interest in the subject insured, and in the policy, to the plaintiff Ferriss, before the loss happened.

Both counts averred the loss, and the presentment of the usual preliminary proofs. The policy was set forth on oyer, in hcec verba, as without seal.

To the first count, the defendants put in several pleas.

The third of these was in bar, a sale of Eaton’s interest in the subject insured, and in the policy, to Ferriss, with the consent of the defendants, before loss, as averred in the second count.

The fifth plea to the first count, was drawn in reference to a clause contained in the conditions of insurance, as follows: “All fraud or false swearing shall cause a forfeiture of all claims on the insurers, and shall be a full bar to all remedies against the insurers on the policy.” The plea alleged, that “ the claim of the said plaintiffs, &c. was falsely and fraudulently greatly enlarged and exaggerated, with intent to deceive and defraud the said defendants, and to receive from them more than the true amount thereof, in this, to wit, that the said loss was stated and claimed to be the full amount insured in and by the said policy, being the sum of $5000, whereas, in truth, dec. the same was much below that sum, and did not exceed the sum of $1000, which the plaintiffs always, from the time of said loss, well knew and understood,” dec.

The defendants demurred to the second count of the declaration ; and the plaintiffs demurred to the said third and fifth pleas, assigning among other causes of demurrer, that the third plea should have been in abatement, and not in

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bar—and that the fifth plea did not specify by whom the fraud therein alleged had been practiced. Joinders in demurrer.

W C. Noyes, for defendants.

S. Stevens, for plaintiffs.

This company was Originally incorporated by the name of The Phoenix Fire Insurance Company of the city of New- York. (Sess. Laws of 1823, p. 111.) The tenth section, (id. p. 115,) declares, that policies executed as this is, though without the corporate seal, shall have the like force and effect, to all intents and purposes, as if the seal of the corporation had been or was affixed thereto, and that an action of covenant, or on the case, may be maintained thereon against the corporation. The name was subsequently changed to The North American Insurance Company, by Sess. Laws of 1836, (ch. 99, p. 140.) These statutes furnish an answer to the demurrer which objects to the form of the second count. It is said, that count should have been in covenant, expressly and in terms, or it could not be joined with the first count, which is clearly covenant; that it is equivocal, and may be considered as a count in case, or covenant; that the policy not being treated therein as a deed, the plaintiffs must be taken to have elected under the statute to bring case; and therefore here is a misjoinder of counts.Independently of the introductory words of the declaration, I should think the objection good. The plaintiffs5 second count, in itself, being equivocal in this respect, the defendants might elect to consider it in case, under the rule that doubtful words must be taken most strongly against the party pleading. I am inclined to think, however, this doubt may be taken to be removed, by the introductory words, “ in a plea of a breach of covenant,” which, as always understood, when in that place, apply to the whole declaration. But without deciding that point, the demurrer is not taken in such a form as

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to raise the question.' A demurrer for a misjoinder of counts, must he to the whole declaration. (1 Chit. PI. 180, 394, Am. ed. of 1828, marg. pages.) Here the demurrer applies to the second count only, which, taken independently, is valid, whether it be in case or covenant. The substantial objection to this count will be considered in the sequel.

Another question of form is raised by the demurrer to the fifth plea to the first count, viz. the plea of fraud. One condition of the policy is, that all fraud or false swearing shall cause a forfeiture of claims on the insurer; and shall be a full bar to all remedies against the insurer, on the policy. Looking at the nature of a policy, and the context of this and others containing the like clause, there can be no doubt that it means fraud, &c. in the preliminary proofs only. It would be idle as applied to the original concoction of the policy, which is always avoided by the common law, for the least want of good faith in the assured. The plea, therefore, should have averred, that the alleged fraud was committed in the rendition of the preliminary proofs; but above all, that it 'was committed by the plaintiffs or some party in interest. Both are said to be implied by the plea; and by a somewhat liberal course of intendment, I admit that may be made out. But by the rule, that a title or defence must always be expressly stated in pleading, in order to sustain it against a demurrer, a very serious doubt arises upon its import. No one is named as a party to the fraud, nor is it' averred to lie in the preliminary proofs. The case is open to the implication, that the fraud might have been committed by some one over whom the party in interest had no control. That is highly improbable, I admit; but we are not called to the office of presumption after verdict. The question arises on demurrer, specially assigning for cause, that the plea does not fasten the fraud upon the party. Under the rule before adverted to, and applied to the second count, the plea, being equivocal, must be taken most strongly against the defendant.

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But the vital question in this particular action, is raised by the demurrer to the third plea to the first count, and is involved in the demurrer to the second count of the declaration; viz. that the plaintiff Eaton, having assigned to the plaintiff Ferriss, before the loss happened, all interest in the subject of the policy, and in the policy itself, and that with the consent of the defendants, the former should not have been joined as a party plaintiff; but the action should have been brought by Ferriss alone.

It is supposed that the plea fails to raise this question, inasmuch as it is a plea in bar, whereas it should have been in abatement for a misjoinder. The plea is, that one of the plaintiffs has assigned his legal interest to the other. It is, in effect, the same as a plea that all the plaintiffs had assigned their interest. The plea, if valid, destroys the right of the plaintiff Eaton, and the right of both when they come jointly. The case is probably about the same as a plea, that one of several plaintiffs has assigned under the statute of bankruptcy, or setting up his attainder where the cause of action is forfeited. It is very questionable whether such matter be not merely in bar; though it is said of outlawry, forfeiture or attainder, pleaded against a sole plaintiff, that either may be pleaded in bar, or abatement, at the defendant’s election. (1 Chit. Pl. 386, Am. ed. of 1828.) But the misjoinder of plaintiffs is always a matter which operates as a bar in assumpsit, even on the general issue. Therefore, if pleaded, it would amount to the general issue, which is a plea in bar. (Vide Facquire v. Kinaston, 2 Ld. Raym. 1249.) In covenant, it is equally a matter in bar, and, I think, properly pleaded as such. It is not necessary to deny, that it might also be pleaded in abatement; a form to which some books certainly give countenance.

Upon the main question, the 14th section of the act incorporating this company seems to be decisive. It declares, that in case any person or persons assured shall assign the subject matter, he may also assign the policy; and notice being given to the company before the loss happens, the assignee shall have all the benefit of the policy,

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and may sue in his own name. That is this case. Eaton’s interest, both equitable and legal, departed on executing the assignment, as much so as that of an insolvent debtor, on executing his assignment, and obtaining his discharge. All right vested in Ferriss. This is fatal to the action; and there must be judgment for the defendants on the demurrer to the second count of the declaration, and to the third plea to the first count; and for the plaintiffs, on the demurrer to the fifth plea to the first count.

Judgment accordingly.