Case Name: Albert S. Embler, Appellant, v. Hartford Steam Boiler Inspection and Insurance Company and The Ticonderoga Pulp and Paper Company, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896
Citations: 8 A.D. 186
Docket Number: 
Parties: Albert S. Embler, Appellant, v. Hartford Steam Boiler Inspection and Insurance Company and The Ticonderoga Pulp and Paper Company, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 8
Pages: 186–191

Head Matter:
Albert S. Embler, Appellant, v. Hartford Steam Boiler Inspection and Insurance Company and The Ticonderoga Pulp and Paper Company, Respondents.
Insurance—insuring a pulp company against loss of life by explosion “payable to the assured for the benefit of the injured person” — action by the assignee of the administrator of an employee hilled—privity of contract—wager policy—proof that the pulp company had an interest in the party injured, required.
The Hartford Steam Boiler Inspection and Insurance Company insured the Ticonderoga Pulp and Paper Company against all such immediate loss or damage as should be caused to the property of the persons specified in the policy by the explosion of either of the boilers of the pulp company, and by a certificate attached to and made a part of the policy it also insured the said company “against loss or damage to property of every kind, wherever located, whether owned by the insured or by others, and for which the assured may be liable, resulting from the explosion or rupture of said steam boiler; also against loss of human life or injury to person, whether to the assured, to employees, or to any other person or persons, caused by such explosion or rupture, payable to the assured for the benefit of the injured person or persons, or other legal representatives in case of death, and not contingent upon the legal liability of the assured.”
The loss by personal injury was to be based upon the loss of the wages of the insured person from the time of total disability.
In an action brought on such policy by the assignee of the administrator of a fireman who died of injuries caused by the explosion of one of the boilers,
Held, that the contract was made solely between the insurance company and the pulp company;
That if it were to be viewed as a contract designed to indemnify the pulp company, against any loss which might accrue to it by reason of the injury or death of its employees, it would not cover a case where it was not shown that there existed a liability on the part of the pulp company to the party injured;
That if the contract could be deemed to constitute more than a mere indemnity, and was one by which the pulp company had insured the life of its deceased employee, then it was void as a wager policy in the absence of proof that the pulp company had a definite and continuing contract with the deceased for his, services and consequently an insurable interest in his life;
That the provision in the policy, which stated that the loss should be “ payable to the assured for the benefit of the injured person or persons, or other legal representatives in case of death, and not contingent upon the legal liability of the assured,” did not alter this construction, because there was no fact in the case which authorized the conclusion that the pulp company was contracting for any person other than itself; and that, where it appeared that the pulp company had no interest in the life of the person, neither the company nor any one else could maintain an action, upon the policy, based upon the loss of such a life;
That section 55 of chapter 690 of the Laws of 1892 had no application to the contract.
Appeal by the plaintiff, Albert S. Embler, from a judgment of the Supreme Court in favor of the defendants dismissing the plaintiff’s complaint, entered in the office of the clerk of the county of Albany on the 6th day of January, 1896, upon the decision of the. court rendered after a trial at a Special Term held at chambers, in Schenectady, pursuant to an adjournment from the Albany Circuit, The action was brought by the plaintiff as assignee of Alice Provencha, administratrix of Sylvester Provencha, who was alleged to be a fireman in the employment of the defendant, the Ticonderoga Pulp and Paper Company, and who was alleged to have died of injuries sustained from the explosion of a boiler in its-works, while he was serving as an employee. The boiler had been insured by the defendant, the Hartford Steam Boiler Inspection and Insurance Company under the policy described in the opinion of' the court. After the death of Sylvester Provencha, the plaintiff' requested the Ticonderoga Pulp and Paper Company, in writing, to collect, or, if necessary, to sue the Hartford Steam Boiler Inspection- and Insurance Company for the sum of $5,000 for his benefit, but this request was refused;' and he subsequently demanded, in writing, of the Hartford Steam Boiler Inspection and Insurance Company the payment of the same sum, which was also refused. Before-the assignment to the plaintiff, Alice Provencha, as such administratrix, had brought an action against the Ticonderoga Pulp and Paper Company to recover damages for its alleged negligence.. resulting in the death of Sylvester Provenclia, her husband, and that action had, before'trial, been settled and discontinued upon the payment by the defendant therein of $1,500. In the present action, the plaintiff demanded judgment for an accounting between himself and the two defendants, asked a judgment against the Ticonderoga Pulp and Paper Company for whatever sum might have been paid to it by the Hartford Steam Boiler Inspection and Insurance Company, over and above its loss and damage to property, for the use and benefit of Sylvester Provenclia or his representatives ; and the plaintiff also asked a judgment against the Hartford Steam Boiler Inspection and Insurance Company for the sum of $5,000, or for such part thereof as, upon an accounting, should be shown not to have been paid to the Ticonderoga Pulp and Paper Company for the use and benefit of Sylvester Provenclia.
Douglas & Heaton, Francis A. Smith and E. W. Douglas, for the appellant.
Lewis E. Griffith, for respondent, Hartford Steam Boiler Inspection and Insurance Company.
Franklin A. Rowe, for respondent, Ticonderoga Pulp and Paper Company.

Opinion:
Parker, P. J.:
By the policy of insurance upon which this action is brought it is agreed that, in consideration of $375 paid by the pulp company, the insurance company, defendant, insures such pulp company, in the sum of $50,000, against all such immediate loss or damage as shall be caused to the property of persons specified, by explosion of either of its boilers, from October 12, 1891, to October 22, 1894, not exceeding in amount the sum insured. By a certificate attached to the policy and made a part of it, termed a " special blanket," it is further provided, in substance, that the pulp company is insured in the sum of $50,000 " against loss or damage to property of every kind, wherever located, whether owned by the assured or by others, and for which the assured may be liable, resulting from the explosion or rupture of said steam boiler; also against loss of human life or injury to person, whether to the assured, to employees, or to any other person or persons, caused by such explosion or rupture, payable to the assured for the benefit of the injured person or persons, or their legal representatives in case of death, and not contingent upon the legal liability of the assured." It is further provided that, in case of temporary injury, the liability of the insurance company shall not exceed fifty dollars per week, and in case of loss of life, their liability shall not exceed $5,000 for each life lost. It is also-further provided that in case of loss the damage to property shall be-first paid, and the remainder of the $50,000 only shall be applicable to loss of life or injury to person. It is provided in the policy itself that the loss by personal injury is to be based upon loss of wages of injured person, from the time of total disability.
It is by no means plain what the parties intended to accomplish by these provisions concerning loss of life, or injury to person, so-far as it applies to the employees of the assured, and I am in considerable doubt as to just what their contract upon that subject is.. It is plain, however, that whatever the agreement is, the only contracting parties are the insurance company and the pulp company. If, by their contract, so far as it extends to loss of life or injury to person, the sole purpose of such parties was to indemnify the pulp company against whatever loss should accrue to it by reason of the injury or death of its employee,, and if we may so construe the language which they have used, it is plain that the plaintiff cannot recover in this action, for the reasons so effectively stated by the trial judge. (See, also, French v. Vix, 143 N. Y. 90, 94.)
It 'is clear that, so far as injury to property is concerned, the contract is one of indemnity to the pulp company ; but it is urged by the plaintiff that, so far as it affects loss of life, the contract is not onecí indemnity. An insurance against loss of property by fire or otherwise is a contract of indemnity. A life insurance is not. It is " a mere contract to pay a certain sum of money on the death of a person, in consideration of the due payment of a certain annuity for his life." (Olmsted v. Keyes, 85 N. Y. 593, 598. See, also, Holmes v. Gilman, 138 id. 381.) And the plaintiff claims that the contract before us is of that character. The provision that payment, in case-of loss, is to be made " to the assured for the benefit of the injured person or persons, or their legal representatives in case of death,"' leads me to doubt whether the parties intended a mere indemnity to-the pulp company. So, also, the provision that payment was to be-mad e to the pulp company, without reference to its liability for the injury, indicates that mere indemnity to it was not intended. If there was no liability from the pulp company to the person injured, it is difficult to see how any loss could accrue to such company against which indemnity could be needed, or upon which it could be estimated. So, also, if in no event the sum paid was to become the property of the pulp company — if such company was to receive it merely to the use of the injured person—-such a payment could not be considered as an indemnity to the pulp company, and we can hardly suppose it was intended as such.
But if the contract is to be considered as one by which the pulp company has insured the life of the deceased Provencha, the question arises whether it is a valid contract. " A policy obtained by a party who has no interest in the subject of insurance is a mere wager policy." (Ruse v. Mutual, etc., Ins. Co., 23 N. Y. 516, 523.) In Howard v. The Albany Ins. Co. (3 Den. 303) it is said, " when the assured has no interest at the time the contract is made the policy is a mere wager," etc. It may be that if the deceased Provencha had, at the time this contract was made, been under contract to the pulp company as its employee for a definite and unexpired term, so that the company would have then had a legal right to or an interest in his services, such company would have had such an interest in his life as would sustain a contract insuring it. But in the case .before us it does not even appear that, at the time of the contract, Provencha was an employee of the pulp company; nor does it appear that such company ever had any definite and continuing contract for his services. For aught that appears at the time of the contract he was an utter stranger to the company. And it is quite possible that at no time was he obligated to work for the company for a longer period than through the day. Under such circumstances the policy, so far as it undertakes to pay for the loss-of Provencha's life, is a mere wager. It is invalid, and the pulp company could not recover anything upon it. No recovery could be had upon it by any person without proving that, at the time the policy was issued to the pulp company, such company had an insurable interest in Provencha's life. (Ruse v. M. L. Ins. Co., above; cited.)
The act of 1892 (Chap. 690, § 55)Jias no application to the contract before us.
It is argued, however, that, because the policy provides that the payment to the pulp company is to be for the benefit of the person injured, such policy is not a wager, but a valid contract. I cannot see how that provision affects this question. Clearly, it was the pulp company that made the contract and procured the insurance. Even though the pulp company intended the insurance to be for the benefit of the person injured, the contract was still its contract. In no sense can it be said to have been the contract of the person injured, nor can the insurance be said to have been procured by the person injured. The pulp company did not assume to act as the agent for whomsoever .should be injured, so that the contract can be deemed to have been made with the person injured and for his own benefit. The provision that the payment is to be for the benefit of the injured person cannot be given any such force as that. The contract is in the name of the pulp company and the loss is payable to it, and there is no fact in the case authorizing the conclusion that it was contracting for any person other than itself. If the contract between it and the insurance company had been a valid one it might be that a trust would arise, as between the pulp company and the person injured, to hold the amount received to such person's use. But conceding, as we must, that the insurance upon which this action is brought was obtained by the pulp company upon the life of a person in whom it had no interest, I am unable to see how any action can be maintained thereon by the pulp company or any one else.
I do not see how the rule laid down in Lawrence v. Fox (20 N. Y. 268) is important in this case. A man may insure his own life and provide that the loss be paid to a party in whom he has no. interest, and the beneficiary so named may recover on the policy the amount of the loss. (Olmsted v. Keyes, supra, 600.) But he may not insure the life of a person in whom he has no interest; and if he does, neither he nor the beneficiary named can recover upon it.
I conclude, therefore, that whether this contract be considered one of indemnity to the pulp company, or whether it be deemed an insurance upon the life of Proven cha, taken out by the pulp company, in neither view can this action be maintained.
Judgment affirmed, with costs.
All concurred, except Labdob, J., not sitting.
Judgment affirmed, with costs.