Case ID: misc_27/html/0498-01.html
Source: Caselaw Access Project
Author: {"author": "Freedman, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Patrick Henry Cuff, Respondent, v. Arnold B. Heine, Appellant.
    (Supreme Court, Appellate Term,
    May, 1899.)
    Lloyds’ insurance—A settlement made by the attorney in fact benefits all the associates, and may be. proved.
    Where the attorney in- fact for an association of Lloyds’ underwriters has been given by them power to settle losses and compromise and defend all claims, any compromise or satisfaction made by • him-inures to the advantage of all the associates, and may be shown by one of them who is sought to be-made liable upon a judgment-which the attorney in fact fraudulently permitted to be recovered against himself after he had settled the claim in the interest of' all' the associates. '
    Cuff v. Heine, 26 Misc. Rep. 859, reversed;
    Appeal from a judgment of the General Term of the City Court, modifying a judgment in favor of the' plaintiff, entered upon the direction of a verdict by the court, and affirming the judgment as modified..
    Stern c& Rushmore (W. Benton Crisp, of counsel), for appellant.
    Menken Bros., .for respondent.
   Freedman, P. J.

The facts upon which this action is based, are substantially as follows:

The - defendant was one of fourteen- underwriters in. what is known'as a Eloyds’ association. ' - "• ' '

The general manager and attorney in fact for the company was one Daniel Woodcock. The association issued a policy of insurance to the Brenack Paper Company, in August, 1895,- covering property to the 'amount of $2,500, under which policy a total loss was sustained. The Brenack'Paper Co. was at that time composed of Richard Brenack and George E. Callender. Subsequently, Cal-lender made a general assignment for the benefit of his creditors to one Alfred L. Squires, Jr., who duly qualified. Thereafter, Brenack brought an action, against Woodcock, as attorney in fact, for the underwriters, upon the policy issued to the Brenack Paper Co., and in that action made Oallender and' Squires, as assignee, etc., parties defendant, they having refused to join - in . such action as plaintiffs. After that action was begun by Brenack, and before judgment was obtained by him, Woodcock paid to Brenack or to his attorney in the action, the sum of $1,000, hut whether such sum was to apply upon, or he in full settlement and satisfaction of the claim does not appear.

Subsequently, however, a judgment was entered in favor of Brenack, and against Woodcock, upon his failure to plead, for the sum of $2,500 and costs, that amount being the full amount claimed under the policy of insurance.

That judgment was thereafter' assigned to this plaintiff, who thereupon brought this action against the defendant to recover from him the full proportionate share of his liability, under the contract of insurance, and claimed in the complaint to be the sum of $200.50. The answer set up as a defense that the plaintiff was not the real party in interest, and further alleges, in substance, that the payment made by Woodcock, of the sum of $1,050, aforesaid, was made by him as attorney in fact for all the underwriters aforesaid; that it was made in full settlement and satisfaction of the claim; that the judgment afterwards entered against Woodcock was fraudulently and collusively obtained, and that the assignment to this plaintiff was, in fact, for the benefit of Woodcock.

These matters the defendant endeavored to prove upon the trial, arid for that purpose asked numerous questions of Woodcock, who was called as a witness by the plaintiff. The questions were material and pertinent to the issues raised by the pleadings. To each question the plaintiff’s counsel interposed an objection, which the ■court sustained, and the defendant excepted to the ruling.

The defendant also called three witnesses, to each of whom similar questions were put, which were relevant and proper, all of which were excluded under the ruling of the court. Finally, a verdict was directed in favor of the plaintiff for the full amount of the claim. This was error. Woodcock was the attorney in fact for all the underwriters. The power of attorney given him by the defendant, and introduced in evidence by the plaintiff, gave him (Woodcock) power and authority to settle losses and to compromise or defend any and all claims that might be brought against the association. This was also within the line of his duty as such attorney in fact, aside from any special authority conferral' upon him. Whatever settlement or compromise or satisfaction of .claims, if any, were made by him, was for the advantage and benefit of all the insurers. ■

It is' true the General Term of the City. Court modified the judgment of the lower court, by requiring that the defendant’s proportionate share of the $1,050 paid by Woodcock as hereinbefore stated should he deducted from the amount of the recovery in this action, hut this fails to meet the requirements of this case. The issues framed by the pleadings were, and the testimony excluded by the court tended to prove, that Woodcock had fully settled, compromised and satisfied the claim for which the action against him had been brought, and then had fraudulently permitted a judgment for -the full- amount to be entered against him; that the plaintiff was not the real party in interest, and-that the assignment of the judgment to the plaintiff was in form merely, and to enable a recovery to be had against the underwriters of the whole amount ■ claimed under the policy, or, at least, a greater proportionate share, of one or more of them, than such share would rightfully be, if the claim had been extinguished by accord and satisfaction for less than the full-amount. For these reasons the judgment' must be reversed -arid-a new trial ordered. Under the circumstances the other questions raised by appellant need not he considered. .

Judgment reversed, new trial ordered, with costs to the appellant to abide the event.

MaoLexs and Leventritt, JJ., concur.

judgment reversed, new trial ordered, with costs to appellant to abide event.