Court Opinion

ID: 7339339
Source: CourtListenerOpinion
Date Created: 2022-07-25 23:38:23.395449+00
Date Added: 2024-06-11T16:20:15.002927
License: Public Domain

INGRAHAM, J.
(dissenting). This action is upon a policy of reinsurance. The ninth clause of the complaint alleges that there was therein contained the following provision:
“No action shall be brought to enforce the provisions of this policy except against the general manager and attorney in fact, and representing all of the underwriters, and each of the underwriters hereby agrees to abide the result of any suit so brought, as fixing his individual responsibility hereunder. Judgment entered in such an action shall be satisfied out of the premiums in the hands of the underwriters unexpended; if such premiums shall be insufficient, then out of the deposit made by the several underwriters; if both shall be insufficient, then out of the individual liability of the several underwriters, as hereinbefore expressed and limited.”
This allegation of the complaint is not denied, and therefore stands conceded. The first defense demurred to alleges that the policy of insurance mentioned in the complaint contained the following provision :
“All policy holders who shall sustain loss or damage from such fire or fires shall be entitled to recover as against each underwriter, only that proportion of the adjusted claim on each policy which the aggregate of such claims shall bear to the total liability of each underwriter, as thus limited; and the total liability of each underwriter on all policies now or hereafter in force after the application of the total unexpended premiums, shall not exceed twenty-five hundred dollars (the original subscription of $500 each being therein included).”
It is also alleged—
“That this defendant, as an underwriter of the said People’s Fire Lloyds, has b.een compelled to pay, and did pay, after the issuance of the policy referred to in the plaintiffs’ complaint, on policies of insurance of the said. People’s Fire Lloyds existing and in force at and after the time of issuance of the said policy No. 102,388, and after the application of the total unexpended premiums received by said People’s Fire Lloyds, a sum greatly in excess of $2,500, his total fixed liability as an underwriter aforesaid, provided in the said policy aforesaid,” and “that having paid, as heretofore alleged, his total fixed liability as an underwriter of the said People’s Fire Lloyds, this defendant is not liable in any sum whatsoever to the plaintiffs herein.”
And the question is whether this is a defense to a cause of action to recover against the defendant individually for a loss under the policy; the plaintiff having recovered a judgment against the agent and attorney in fact, which he has been unable to collect.
The whole policy is not made a part of the pleadings; the defendant relying as a defense to his obligation as an individual underwriter under the policy upon this clause, which, it is claimed, limits his liability to the sum of $2,500, so that, no matter what the loss may be under any specific policy, if he has paid the sum of $2,500 on other *1049policies of insurance issued by him to an amount of $2,500, he thereby escapes all individual liability. This clause, if given the construction claimed by the defend ..nt, would enable him to go on issuing policies to any amount, receiving the premiums therefor, but affording no indemnity to the policy holders, and conferring upon them no advantage; and while I agree that the contract made, however disadvantageous to one of the parties it may be, should be enforced, I do not think such a construction should be given to this clause, in a policy prepared by the defendant, unless it restricts such liability in the clearest terms. If this limitation had been intended to apply to the policy issued to the plaintiffs, there would have been no difficulty in so providing in unambiguous language; and while it may be conceded that the defendant, by inserting this clause, sought to escape the liability which by the contract he had expressly assumed, I think, before such a construction should be given ■ to it, that intention should be plainly expressed, and made to apply to the policy, which had imposed a distinct liability. If this is a good defense, then upon proof of this clause of the contract pleaded, and the fact that the defendant has paid $2,500, the defendant will be entitled to judgment. If the defense fails to set up facts as to the agreement which will discharge the defendant, then the defense is insufficient, and the demurrer thereto should have been sustained. As pleaded, I do not think the defense is sufficient, and I therefore think that the demurrer to it should have been sustained.
I concur with Mr. Justice HATCH as to the second defense.