Majority
p. 279HENRY ROUSSEL, Plaintiff and Respondent, v. THE ST. NICHOLAS INSURANCE COMPANY, of the city of New York, Defendant and Appellant.
Headnote
demurrer.The action was upon a policy of insurance, whereby the defendant agreed to make good any loss or damage by fire, to the amount of two thousand five hundred dollars, on the steam tug propeller, for the period of one year.
The complaint averred that said policy made such loss payable to plaintiff, and was obtained in the names of S. W. Morris and A. C. Lewis. That the consideration for the policy was paid by plaintiff, who at the time had a chattel mortgage on said vessel, to secure the payment of two thousand five hundred dollars, due to plaintiff, from the owners of the vessel, which at the date of the policy was overdue, and by its terms, plaintiff was entitled to the possession of the vessel ; that defendant gave the policy to secure plaintiff against loss or damages by fire to the extent of plaintiff's interest, namely, two thousand five hundred dollars, the fact of such interest being well known to defendant ; that said vessel was at the time in the possession of said Morris & Lewis, who were the owners of the same, subject to plaintiff’s interest or lien. The complaint then alleged the facts of the fire, the loss, and the notice and proofs of loss, to the defendant, in accordance with the policy, and the refusal of the defendant to pay. It also alleged that the fire was not causedby any of the “accepted” risks contained in said policy.
Defendant demurred, on the ground—•
1. That plaintiff had not legal capacity to sue. 3. That there was a defect of parties in the omission of Morris and Lewis, the parries insured. 3. That the complaint does not contain facts sufficient to constitute a cause of action.
The court overruled the demurrer, holding the following conclusions of law :
As mortgagee of the steam tug, the plaintiff had an insurable interest in her (Phil, on Insurance, 4164; Traders Ins, Co, v. Roberts, 9 Wen. 404).
The complaint avers the interest to have existed at the time of
p. 280Before Curtis and Sanford, JJ. Decided May 1, 1876.
effecting the insurance, and the legal presumption is that it continued to the time of the loss (Bank of Auburn «. Roberts, 44 N. 7. 192).
What is necessarily implied need not in terms be alleged.
The action was well brought by the plaintiff, in his own name. He was the real party in interest.
At common law, if an instrument be not under seal, the party for whose sole benefit it was evidently made may maintain bis action thereon, although the engagement be not directly to, or with him (1 Ohitty PL, 5; Schermerhorn v. Vanderheyden, 1 J. B. 139).
The owner of the equity of redemption of property insured in a similar policy cannot recover while the mortgage is unpaid, for the reason that the mortgagee has the absolute right to recover the loss (Ennis d. Harmony Fire Insurance Co. 3 Bos. 517).
In contemplation of law, there is created a privity of contract between the promisor and the party who alone has the beneficial interest in the performance of the promise.
Morris and Lewis were not necessary parties to the action. The controversy before the court can be determined without prejudice to any right of theirs, and a complete determination ,can be had without their presence (Code § 122).
The use of the word “ accepted ” for “ excepted ” is manifestly a mere orthographical error, by which the defendant has not been misled. Such mistakes may be corrected at any time, and should be disregarded. They do not make the complaint demurrable.
This is an appeal from an order made at Special Term, December 6, 1875, overruling* a demurrer to the complaint.
The action is upon a policy of fire insurance, made by defendants on the 15th day of March, 1875, whereby they agreed to make good any loss or damage by fire, to the amount of two thousand five hundred dollars, on the steam tug propeller “Matt White,” during the period, of one year.
p. 281
The complaint avers “That said policy of insurance made such loss or damage payable to Henry Roussel, this plaintiff, and was obtained in the names of S. W. Morris, and A. 0. Lewis. That the' consideration for said policy was paid by Henry Roussel, this plaintiff, as was well known to the defendant, when said sum was accepted by it. That at the time aforesaid this plaintiff held a chattel mortgage on said property to secure a payment of two thousand five hundred dollars, due from the owners of said property to this plaintiff, which chattel mortgage was, at that time, overdue, and by the terms of which mortgage this plaintiff was entitled to the immediate possession of said property, and this defendant gave the policy of insurance as aforesaid on said property, with the intention to secure against loss or damage by fire, to the extent of two thousand five hundred dollars, the interest which this plaintiff held in such property as aforesaid, the fact of such interest to this plaintiff in said property being well known to the defendant.
“That at the time of such insurance, S. W. Morris and A. C. Lewis, aforesaid, were in actual possession of the property thus insured, and were the owners of the same, subject to the plaintiff’s interest as mortgagee, as aforesaid; that is to say, the said Morris and Lewis, had the right of redeeming said property, and obtaining undisputed ownership of the same upon payment of the sum aforesaid, due as aforesaid to this plaintiff.
“ That on the 20th day of June, 1875, a fire occurred, by which the property thus insured was destroyed, and a loss incurred to an amount exceeding the sum aforesaid, of two thousand five hundred dollars; to wit, to an amount of at least three thousand and fifty-five dollars.
“That said fire originated at about twelve o’clock midnight, on said 20th day of June, 1875, while said
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boat was lying in the harbor of New York, and that said fire was not caused by any of the accepted {sic) risks in said policy contained.
“ That immediately after the aforesaid fire and loss the defendant was duly notified of the same, and soon thereafter, and more than sixty days before the commencement of this action, formal proof of .loss was delivered to and left with the defendant, both by and in behalf of the said Morris and Lewis, and by and in behalf of this plaintiff.
“ That the defendant has refused and still refuses on its part to perform the conditions on said contract of insurance. That the full sum of two thousand five hundred dollars, as aforesaid, remains due and unpaid.”
The defendant demurred, on the ground, “1. That plaintiff had not legal capacity to sue. 2. That there was a defect of parties in the omission of the names of S. W. Morris and A. C. Lewis, the parties insured. 8. That the complaint does not contain facts sufficient to constitute a cause of action.”
The court, at special term, overruled the demurrer, and ordered judgment for the plaintiffs with costs, but with leave to the defendant to withdraw the demurrer, and put in an answer within twenty days, on payment of costs.
John Hewitt, for appellant.
Edward D. McCarthy, for respondent.
As mortgagee of the steam-tug, the plaintiff had an insurable interest in her (Phil. on Ins. 41, 64; Traders’ Ins. Co. v. Roberts, 9 Wend. 404 ).
The complaint expressly avers such interest to have existed, at the time of effecting the insurance. The
p. 283
legal presumption .is that such interest continued until the time of the loss (Bank of Auburn v. Roberts, 44 N. Y. 192 ). But the defendant insists that the complaint should have averred the existence of an insurable interest, at the time of the loss, and that the absence of an express aveiment to that effect cannot be aided by inference or intendment, nor by presumptions or conclusions of law. The rule, however, is well settled, that what is necessarily implied need not be in terms alleged. The averment of the plaintiffs’ lien, and that defendants gave the policy on the property with the intention to secure against loss the interest which plaintiff held in such property (the fact of such interest being well known to defendant), is admitted by the demurrer. If denied, it would be snstiinel by the production and proof of the mortgage an 1 policy, and such proof would throw upon the defendants the burthen of showing that the plaintiff’s int-rest had ceased, at the time of loss. Whatever must be proved should be averred, but the averment, while it should be commensurate with, need not exceed the required proof.
The action was well brought by the plainti.r in his own name. He was the real party in interest (Code, § 111). At common law, if an instrument be not under seal, the party for whose sole benefit it is evidently made, may maintain his action thereon, in his own name, although the engagement be not directly to or with him (1 Chitty's Pl. 5 ; Schermerhorn v. Vanderheyden, 1 J. R. 139). In Ennis v. Harmony Fire Insurance Company ( 3 Bosw. 517 ), it was held that the owner of the equity of redemption could not recover upon a similar policy, while the mortgagee remained unpaid, and for the reason that the mortgagee had the absolute right to recover the loss. In contemplation of law, there is created a privity of contract between the promisor and the party who alone has a beneficial interest in the porfor na i ce of the promise.
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Morris and Lewis are not necessary parties to the action. The controversy between the parties before the court, can be determined without prejudice to any rights of theirs, and a complete determination of the controversy can be had without their presence (Code, § 122).
The misuse of the word “accepted” for excepted in the allegation that the fire was not caused by any of the accepted risks, is manifestly a mere orthographical error, by which the defendants have not been misled. Sncb mistakes may be corrected at any time, and should be disregarded. They do not render pleadings demurrable.
The order appealed from should be affirmed, with costs.
Curtis, J., concurred.
Cases cited
- Traders' Insurance v. Robert 9 Wend. 404 p. 282
- Bank of Auburn v. Roberts 44 N. Y. 192 p. 283