Palmer v. Great Western Insurance

The action was upon the defendant’s policy, dated January 18, 1879, insuring P. J. Nevins & Son “ on account of whom it may concern,” against loss from the perils of the sea, barratry of the master or crew, and all other perils, losses or misfortunes which should come to the hurt, detriment or damage of the bark “ Brothers’ Pride,” her tackle, apparel and other furniture, “ at and from Cardiff to and from Cienfuegos or other port or ports in Cuba, and thence to a port north of Hatteras,” in the sum of $2,000. The bark, inclusive of her tackle, apparel and other furniture, was, by the terms of the policy, “ valued at sixteen thousand dollars without' any other account to be given by the assured to the assurers ; ” and payment, in the event of loss, was to be made to C. A. Palmer. It was further provided by the policy that the loss, if any, should be paid within thirty days after proofs of loss and interest in the bark; that the as-surer should be liable only for the deficiency remaining after applying towards the payment of any loss to the interest assured tne amount of all prior insurance, but that subsequent insurance

The trial resulted in a verdict for the plaintiff, and from the judgment entered thereon, as well as from an order denying a motion on the minutes for a new tiial, the defendant appeals.

The complaint alleged that on or about May 7, 1879, the “ Brothers’ Pride,” while at sea and bound on her voyage from a port in Cuba to a port north of Hatteras, was wrecked and totally lost from one of the causes insured against; that at the time of the commencement of the risk and up to the time of the loss the plaintiff was and continued to be the owner of forty-three sixty-fourth parts of the bark; that he had complied with all the conditions of the insurance on his part to be performed, and given due notice and proof of his interest and loss to the defendant; and that no part of the sum assured was paid although such payment was duly demanded.

The answer denied each of the aforementioned allegations of the complaint and interposed, as affirmative defenses, that the “ Brothers’ Pride ” was scuttled and sunk, or cast away, with the privity, connivance and consent of the plaintiff, and solely to claim the insurance money; that the policy was avoided because of the false and fraudulent character of the proofs submitted, by the existence of prior insurance by means of which’the plaintiff was fully indemnified, and because the bark was rendered unseaworthy from an excessive cargo; and furthermore, that the policy was void because it was effected with intent to defraud the defendant and by means of fraudulent misrepresentation, suppression and concealment of material facts.

By supplemental complaint it was alleged that, subsequent to the commencement of this action, the plaintiff, jointly with one Daniel J. McLaughlin and C. A. Palmer, recovered a judgment on the merits against the defendant, in the superior court of the city of New York, upon a policy of insurance affecting the “ Brothers’ Pride ” for the same voyage. The answer to the supplemental complaint disputed the identity of the issues in this action with those in the superior court action.

On this appeal the defendant urges as grounds for reversal that the plaintiff not having been a party to the insurance contract, could not maintain an action to recover thereon ; that the defendant was discharged from liability under the policy in suit because the plaintiff was fully indemnified by prior insurance; that the defendant was discharged from liability because the plaintiff was otherwise fully indemnified; that the plaintiff did not comply with the conditions of the policy in suit respecting proofs of loss and interest; that there was a failure of proof respecting the sea

1. That the plaintiff could not maintain the action because he was not a party to the insurance contract. It is sufficient' to say to this that in McLaughlin v. The Great Western Ins. Co., 46 St. Rep. 759 , this court held an action upon a policy in precisely the same words, “ P. I. Nevins & Son, on account of whom it may concern, in case of loss to be paid to C. A. Palmer,” to be maintainable by an owner not specifically named upon proof that the insurance was intended to be effected for his benefit. The point is there discussed, and the accuracy of that decision we here affirm. See, further, Hooper v. Robinson et al., 98 U. S. 219 , and note to same cases in Book 25, U. S. S. C. R., Lawyers’ Co-op. ed. The requisite proof appeared in this action from the testimony of the plaintiff, and of his witness, W. H. Nevins. True, there may be said to have been a conflict of evidence respecting the fact but it was properly submitted to and determined by the jury in the plaintiff’s favor. That the plaintiff was permitted to recover upon proof that he owned fifty-one of the sixty-four shares of the bark, whereas the complaint alleged his ownership to be forty-three shares, and that no amendment of the complaint was had, does not invalidate the judgment. The rule which requires the recovery to be secundum allegata, relates to the cause of action, that is to say, no recovery will be permitted upon a cause of action other than the one alleged. Plainly, proof that the plaintiff owned fifty-one instead of forty-three shares did not change the cause of action. Defendant did not, when the proof was offered, claim to have been surprised or misled. The only objections to the proof were that it was irrelevant, immaterial and incompetent.

The variance therefore was immaterial and did not require amendment of the complaint. Walsh v. Washington Ins. Co., 32 N. Y. 427 , 439; Bank of Cooperstown v. North, 28 N. Y. 545 ; Catlin v. Gunter, 11 N. Y. 374 ; Place v. Minster, 65 N. Y. 89 . The objections stated were untenable as the plain purport of the evidence was to meet and refute the defendant’s evidence in support of the defense that the plaintiff was fully indemnified by prior insurance. Neither can we say that the finding that the plaintiff was the owner of fifty-one shares was against the weight of the evidence or without adequate support in the evidence. Both the plaintiff and his son, C. A. Palmer, testified that the eight shares, which, from the St. Johns registry appeared in the name of the latter, were in fact the property of the former, the same having been purchased by the son, acting in that regard as the agent and attorney for the father, at a sale under foreclosure of a mortgage held by the latter. We do not fail to observe that the father’s ownership of these eight shares was called in question by the alleged testimony of father and son when examined as Witnesses for the defense on the trial of Captain Tower for having

II. That the defendant was discharged from liability under the policy in suit because the plaintiff was fully indemnified by prior insurance. For the purposes of measuring the defendant’s liability the premiums paid for the prior insurance are to be deducted from the amount. Phillips on Ins. § 1257. Observing this, and accepting the prior insurance at £2320, or £2500 less premiums £180, which in current money at $4.86, is equal to $11,275 20-100, and the plaintiff’s interest in the bark as fifty one-sixty-fourths as found by the jury, which, on the basis of the agreed valuation of $16,-000, was worth obove $13,600, it is of course apparent that the plaintiff was entitled to the whole amount of the policy in suit, $2,000. Defendant contends, however, that the plaintiff is chargeable with £600 additional, for prior insurance, and that if so charged he will appear to have been fully indemnified without resort to the policy in suit. Touching these £600, there was evidence tending to show that the insurance was a personal speculation of one of the plaintiff’s agents, and paid to him without the plaintiff’s knowledge, and that it was never intended for or received by the latter. Upon proper submission of the question to them the jury so found. It is inconceivable therefore, how the plaintiff could have claimed the benefit of that insurance, and, if not, assuredly it is not to be charged to him. Defendant seeks, in this respect, to invoke the aid of the familiar principle that an agent will not be permitted to retain á personal profit out of his principal’s transactions, but will be compelled to account to his principal for the profit. That principal, however, will not enable one to claim the fruit of a fraud perpetrated by his agent upon a third person, and for which the latter has redress against the agent. If the agent had no insurable interest in the subject of the insurance he was not entitled to receive the proceeds of the policy intended to be effected for his benefit. The insurance not having been effected for the benefit of the principal he has no right to claim it; and, if he does, he párticipates in the fraud. If the sum assured is paid to him the defrauded assurer is entitled to its re

III. That the defendant was discharged from, liability under the policy in suit because the plaintiff was otherwise fully indemnified. This has reference to the payment to the plaintiff, or rather to C. A. Palmer for the plaintiff, by the New England Insurance Company, of the sum of two thousand dollars upon a policy affecting tire hull and tackle of the “ Brothers’ Pride.” The, New England Insurance Company’s policy’-, however, was subsequent to the one in suit, and both policies contained what is usually termed the “ American Clause,” to - wit: that the assurer should be answerable only for the deficiency remaining after applying towards the payment of any loss, the amount of all prior insurance, but that the assurer should not be entitled, in the event of loss, to contribution from subsequent assurers. This clause was elaborately discussed and construed, in The American Ins. Co. v. Griswold, 14 Wend. 399 , and it was said by Chancellor Walworth (p. 483) with reference thereto : “ It appears to be impossible, therefore, under this policy, that the circumstance of there being subsequent policies underwritten by others, could make any difference as to the apportionment of the loss as between the underwriter in the first policy and the assured, or those Who represented the insurable interest on board at the time of the loss, not covered by that policy. If either of the subsequent underwriters have paid to the assured, upon a compromise of the claims made upon them, more than they were legally bound to pay under their contracts, that is a matter with which the underwriters in the first policy have no concern; since they are not bound to refund anything to the subsequent underwriters, and never had any claim upon them for contribution. If the assured have received anything under such a compromise which they cannot conscientiously retain, they should restore it to those from whom it has been received; but the American Insurance Company or its stockholders have no equitable right to insist that it shall be allowed to them in discharge of their legal liability under the first policy.” The case last above referred to seems to be conclusive that the point under discussion cannot avail the defendant for reversal. See, also, Phillips on Ins., § 1251; Thomas v. Builders' Mut. Ins. Co., 119 Mass. 122 ; Lucas v. The Jefferson Ins. Co., 6 Cow. 635 .

IY. That the plaintiff did not compljr with the conditions of the policy in suit respecting proofs of loss and interest. By this is meant that the plaintiff did not furnish the proofs required of him as a condition precedent to his right of action. It appears, however, in evidence that proofs of loss and interest were furnished and that the same were retained by the defendant without objection as to their sufficiency, and that the refusal to pay the sum assured was based upon grounds which did not relate to the sufficiency of the proofs furnished. Under the circumstances, therefore, further proof was waived by the defendant, and the court properly instructed the jury to that effect. Bodle et al. v. The Chenango Co. Mut. Ins. Co. et al., 2 N. Y. 53 ; O'Neil v. The

Y. That there was a failure of proof respecting the seaworthiness of the “ Brothers’ Pride,” or that she was lost from one of the causes insured, against. Prom the record of this appeal it appears unchallenged that the superior court action was originally brought to recover upon three several policies, two of them, including the one in suit, being intended to cover the hall and tackle of the “Brothers’ Pride,” and the other, her freight; that the conditions of the insurance as well as the causes of loss insured against were the same in each instance, and that each of the policies comprehended a risk for the voyage from a port in Cuba to a port north of Hatteras, while bound on which the bark was lost; that the policies varied only in that under those covering the hull, the defendant also assumed the risk at and from Cardiff from which port the bark sailed to Cienfuegos and Cardenas, both in Cuba, immediately preceding her voyage from the latter port; that before the trial of the superior court action the claims under the policies on the hull were withdrawn, and that the recovery therein was upon the freight policy only.

That the superior court judgment was conclusive in another action between the same parties as to all the issues litigated, or which might have been litigated in the former action, was held by this court in McLaughlin v. The Great Western Ins. Co., supra. That the former recovery was by the plaintiff in this action jointly with others did not impair the effect of the judgment as res judicata. Lawrence v. Hunt, 10 Wend. 82 ; Miller v. Manice, 6 Hill, 114 To entitle the plaintiffs in the superior court action to any recovery whatsoever it was essential for them to establish the seaworthiness of the bark when she sailed from Cienfuegos upon her last voyage, and that she was lost while bound on that voyage from one of the causes insured against. Those issues were directly involved on the trial of that action and decided in favor of the plaintiffs. Hence they could not be litigated again in this action, and the learned trial judge properly excluded evidence to show to the contrary of the facts established by the judgment. For the same reasons also the defendant’s motions for a non-suit and for the direction of a verdict, in so far as those motions were predicated of the alleged absence of proof of the same facts, were properly denied. On like grounds the defendant’s exceptions taken to the charge respecting the conclusiveness of the former recovery, and to the refusals of the court to submit the facts thereby established for determination by the jury, are unavailable for the assignment of error.

That the “Brothers’ Pride” was seaworthy when she left Cardiff for Cienfuegos appeared from the testimony'of the plaintiff’s witnesses, Grant and Brownell (Am. & Eng. Ency. of Law, Vol. 14, p. 368), and that she actually departed from Cardiff, bound for Cienfuegos, from thence to Cardenas, and from the latter port on her last voyage, was shown by the testimony of Roberts, another of the plaintiff’s witnesses. These facts were submitted to the

YI. That there was material error in the rulings of the trial judge. Many of the exceptions taken to the rulings have been considered in our discussion of the points hereinbefore noticed. Those remaining were not specially argued by counsel. ■ They have, however, been examined and with respect to them our conclusion is that no error of gravity is presented.

The judgment and order appealed from should be affirmed with costs. All concur.