New-York Fire Insurance v. Delavan

Headnote

Where by the terms of a policy of insurance the insurers are authorized, within twenty days after proof of loss, to elect to replace the articles lost or damaged by the fire, they are not entitled to file a bill, for an injunction, to restrain the assured from removing or disposing of his goods until after the expiration of the twenty days; to enable them to take an inventory, &c. with a view to such election.

But, upon such a policy, if the assured should, without any sufficient excuse, refuse to permit the insurers to make an examination of the goods saved from the fire, and a proper scrutiny as to the alleged loss, it would be proper evidence to submit to a jury, in a suit brought upon the policy; and it would authorize the jury to presume that the statement of the loss was false and fraudulent.

This was an appeal from a decree of the vice chancellor of the first circuit, dissolving the injunction which had been issued in this cause, and dismissing the complainants’ bill with costs. The complainants had insured the defendant upon his stock of hardware, in a store in New-York, to the amount of $5000, which stock was injured by fire, and by the water used in extinguishing the fire, to the extent of about $2200 as the defendant claimed by his statement of the loss, furnished to the insurers according to the terms of the policy. The bill alleged that the complainants verily believed that the loss had been over estimated, and that they had therefore been anxious to obtain a statement of the present condition of the stock, in order to make a correct estimate of the damage sustained ; that, after several interviews with the defendant, he agreed that the stock should be examined in the presence of two gentlemen, selected by him and the underwriters for that purpose ; but that before such examination was had the

defendant removed a part of his stock of goods to the store of an auctioneer, for sale at auction, and that he was engaged in removing the remainder for that purpose at the time of the filing of the bill in this cause ; that the secretary of the complainants’ company objected to such removal, and insisted upon their right to take an inventory of the stock, and to make an estimate of its present condition | that the terms of the policy authorized the insurers, if they should see fit, to elect, within twenty days after the furnishing of the preliminary proofs of loss, to replace the articles lost or damaged, with others of the same kind, and of equal goodness as such articles were before the fire ; and that the twenty days allowed to them for that purpose had not yet expired. The complainants therefore prayed for an injunction, to restrain the defendant from removing his goods from the store in which they were at the time of the fire, until they should have had a reasonable time to take such inventory, and until the expiration of the twenty days; and that the defendant might be compelled to permit the complainants to take such inventory, and for general relief. The defendant, in his answer, stated the reasons why the parties had not been able to agree upon the mode of estimating the damage to the goods, and why he did not consent to stay the removal of the stock to the store of the auctioneer; but denied that he had refused to permit the complainants to examine and take an inventory of the stock on hand subsequent to the fire, after the goods were thus removed and as fast as they were removed j so as not to interfere with the taking of his own inventory. He also denied the right of the insurers to take an inventory of the stock, except by his voluntary consent, other than the particulars of his loss, which by the terms of the policy he was bound to furnish ; and which he was engaged in making at the time of the filing of the bill. The defendant therefore objected to the jurisdiction of the court to grant any relief in the case.

Pursuant to the tenth condition of the policy of insurance, it was optional

with the complainants to replace the articles damaged with others of the same kind and of equal goodness, giving notice of their intention to do so within twenty days after having received the preliminary proofs. This gave to the complainants a qualified right of property in the damaged goods, at all events, until the expiration of the twenty days; which had not elapsed when the bill was filed and the injunction granted. The amount of damage to the goods insured was the subject of dispute between the parties, and the complainants had an equitable right to a discovery of such amount of damage from the inspection of the goods themselves; which could alone furnish the correct evidence. The jurisdiction of the court of chancery is in this respect ancilliary to the powers of the courts of law, and which without such aid would be defective.

We hold this demand of the complainants to take possession of a man’s store and damaged stock of goods to be the only instance upon record, in the history of insurances against fire, where such a right has been asserted to exist. The bill is not intended to be in aid of a suit at law. This court can only deal with the contract the parties have made. The contract of insurance is one of indemnity merely, and the underwriters can only be charged with the amount of loss sustained. Proof of loss is made a condition precedent; and until made, no claim arises. When it is made in pursuance of the conditions of the policy, a claim does arise; and we respectfully deny any power or jurisdiction of this court in any manner to interfere with the collection or adjustment of that claim. (2 John. Ch. Rep. 371.) The remedy is wholly and exclusively at law. Courts of law decide upon the sufficiency of the proofs ; and if erroneously, the constitution has provided another tribunal than the court of chancery to correct their decisions. (Hoff v. The Marine Ins. Co. 4 John. R. 132. 9 Id. 192. 11 Id. 241. 12 Wendell, 452. 6 Paige’s R. 583. 1 H. Black. 577. Id. 254. 2 Id. 574. 6 Term R. 200. 16 Wendell,

385. 6 Term R. 710.) The injunction in this cause should he dissolved, and the bill of complaint dismissed with costs.