Majority
p. 516Obadiah Ennis, Plaintiff and Appellant, v. The Harmony Fire Insurance Company, Respondent.
Headnote
1. A complaint which alleges, that the defendant, an insurance company, by a policy of insurance made by it, insured the plaintiff, against loss or damage by fire, to a sum named, on his dwelling-house; “loss, if any, payable to E. B. Graves, mortgageea total destruction of the building insured, by fire, on the 10th of January, 1856, while the policy was in force, a promise to pay Graves the sum insured within sixty days after due notice of proof of the loss; the giving of due notice and proof of said loss on the 11th of February, 1856; demand of payment “on behalf of said Graves;" and the refusal of the defendant to pay the loss to the plaintiff or to said Graves; is defective by reason of Graves not being a party to the action.
p. 517(Before Bosworth, Gh. J., and Hoffman, Slosson, Woodruff and PlERREFONT, J. J.) Heard, October 16; decided, November 13, 1858.
2. When a policy of insurance; by its terms, makes the loss payable to a mortgagee, named, of the premises insured, the party obtaining the policy cannot maintain an action in his own name, as sole plaintiff, in case of a loss, without alleging in his complaint that the mortgagee has been fully paid, and has ceased to have any interest in the policy:
3. If the mortgage debt has not been paid, the mortgagee should be joined as plaintiff or sue in - his own name; and if he refuse to do either, on an - allegation of such facts, the insured may make him a party defendant in the action. ...
This is an appeal from an order,' made -by Mr. Justice Hoffmah, in April, 1857, sustaining a demurrer to the complaint.
The complaint avers, that on or about the 16th day of January, 1855, “ the defendant, being a body corporate, created by and under the Laws of the State of New York, and doing business in the city and county aforesaid, did make and deliver a certain instrument in writing, commonly called a policy of insurance, wherein and whereby the said defendant, ■ the Harmony Fire Insurance Company of New York, in consideration of fourteen dollars to it paid by the insured, thereinafter named, did insure Obadiah Ennis against loss or damage by fire, to the amount of three thousand five hundred dollars, on his frame dwelling-house, filled in, with tin roof, situate at Fordham, Westchester county, nearly opposite to the college—loss, if any, payable to E. B. Graves, mortgagee. ■
“ And the said- company did thereby promise and agree to make good unto the said insured, - his executors, administrators and assigns, all such loss or damage, not exceeding in amount the sum insured, as should happen by fire' to the property as above specified during-one year, to wit': from the 10th day of January, 1855, (at twelve o’clock at noon) until the 10th day óf January, 1856, (at twelve o’clock at noon,) the said loss or damage to be estimated according to the true and actual cash- value of the said properly, at the time the same should happen; and to be paid within sixty days after due notice and proof thereof made by the insured, in conformity to the conditions annexed to the policy.
“ The insurance (the risk not being' changed) might be con-
p. 518
tinned for such further term as should be agreed upon, provided the premium therefor be paid and indorsed on the policy, or a receipt given for the same.
“In witness whereof, the Harmony Fire Insurance Company of New York, did cause the said policy to be signed by the President, and countersigned by the Secretary thereof, as by the said policy, reference thereto being had, will more fully and at large appear.
“And the plaintiff further says and avers, that the said policy of insurance was renewed and continued by the agreement of both parties for the further period of one year, to wit: from the tenth day of January, 1856, at noon, until the tenth day of January, 1857, at noon; and that the premium therefor was paid, and a receipt for the same given, as required by the conditions of said policy.
. “And the plaintiff further says, that on the tenth day of January, in the year 1856, between the hours of nine and twelve after meridian, the said dwelling-house, so insured, as aforesaid, became and was'totally lost and destroyed by fire, whereby the defendant became and was liable to pay the amount so insured as aforesaid.
“And the plaintiff further says, that in consideration thereof the defendant did afterwards, to wit: on the day and year last aforesaid, undertake and promise to the plaintiff to pay the said sum of three thousand and five hundred dollars, to the said E. B. Graves, mortgagee as aforesaid, within sixty days after due notice and proof of the said loss. And the plaintiff further says, that, afterwards, to wit: on or about the eleventh day of February, 1856, in accordance with the provision in the policy in that behalf made and provided, notice and proof of said loss was duly made to the said, The Harmony Fire Insurance Company, and demand of payment of said sum of .money was duly made on behalf of the said E. B. Graves, to whom, by the terms of said policy, the said loss was to be paid.
“And plaintiff further says, that defendant has not paid the said sum of money, or any part thereof, to the said E. B. Graves, or to the plaintiff, although, frequently, to wit: on the said last-mentioned day, and oftentimes aftewards, requested so to do; but he has refused, and still does refuse, to pay the same, or any part thereof, to the said Graves, or to the plaintiff.
p. 519
“Wherefore, the plaintiff demands judgment against the defendant for the sum of three thousand five hundred dollars, ($3,500,) with interest, frgm the third day of May, 1856, besides the costs of this action, and a reasonable additional allowance.”
The defendant demurred to the complaint, on two grounds:
First. That there was a defect of parties, because the said E. B. Graves was omitted.
Second. That the complaint did not state facts sufficient to constitute a cause of action.
The Court, at Special Term, ordered judgment for the defendants upon said demurrer, with costs, with liberty to plaintiff to amend his complaint within ten days, upon payment of ten dollars cost. From that order, the plaintiff appealed to the General Term.
F. B. Cutting, for plaintiff and appellant.
T. James Glover, for defendant and respondent.
By the Court.
—This Court held, in Grosvenor v. The Atlantic Fire Insurance Co., of Brooklyn, ( 5 Duer, 517 ), that the insertion in the policy of the words, “loss if any payable to E. B. G., mortgagee,” operated to give the mortgagee the same rights and interest in the policy which he would have, if, without such words in the body of the policy, the mortgagor had assigned the policy to Graves, with the express consent of the insurers. Judge Harris in delivering the opinion of the Court of Appeals in that case says, “I agree with the learned Judges who delivered opinions upon the decision of this case in the Court below, that there is no just ground for discrimination between this case, and that of an assignment of the policy to a mortgagee, to be held by him as collateral security for his debt, with the consent of the insurer.” (17 N Y. R., 395.)
There is no averment that Graves has been paid; on the contrary, it is alleged that “ demand was made on behalf of said E. B. Graves to whom, by the terms of said policy, the loss was to be paid.” It is plain, then, that Ennis alone cannot recover the amount of the loss so long as Graves, the mortgagee, remains unpaid. Graves has an absolute right to recover the amount of
p. 520
the loss, and payment to Ennis, without the assent' of Graves, would not discharge the liability of the company to-the mortgagee. So long as the mortgage remains unsatisfied, Graves is a necessary party to1 the action; if he refuse to unite as plaintiff or to institute proceedings in his own name, Ennis may, on allegation of such refusal, join him as defendant. (Code; §' 119.)
The order should be affirmed, with. $10 costs, with leave, however, to the plaintiff to amend his complaint, on payment of the costs of the demurrer and of this appeal. •
Ordered accordingly.