Court Opinion

ID: 7891231
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:49:10.551652+00
Date Added: 2024-06-11T16:31:55.398566
License: Public Domain

Eccleston, J.,
delivered the following separate, and, in part, dissenting opinion.
This is an action of assubipsit, instituted by James Whiting against the appellees, in the Superior Court of Baltimore city, in May 1855.
A declaration and the plea thereto being filed, the counsel agreed that all objections to the form of action and errors in pleading should be waived, and that either party should be at liberty to give in evidence any matter which might be admissible under any form of action or issue.
James Whiting, the owner of the barque “A. A. Brebert,” on the 15th of March 1854, obtained a policy of insurance upon the vessel, from the Sun Mutual Insurance Company, in which the vessel was valued at $22,000, and insured to the extent of $7,800. On the 16th of the same month, he obtained a policy from the Independent Mutual Insurance Company, valuing the vessel at the same amount, and insuring her to the extent of $7,400; and, on the next day, he obtained a third policy from the Commercial Mutual Insurance Company, valuing the vessel at the same sum, and insuring her to the extent of $7,300; the policies making a total insurance of $22,000, that being the valuation of the vessel. The same period of time, and the like risks, were covered by each policy.
In that executed by the defendant in this suit, is contained the following clause:' “Provided always, and it is further agreed, that if the said assured shall have made any other assurance upon the premises aforesaid, prior in date to this policy, then the -said The Independent Mutual Insurance *321Company shall b(3 answerable only for so much of the amount ns such prior insurance may be deficient towards fully covering the premises hereby insured, without any deduction for the insolvency of all or any of the underwriters, and the said, the Independent Mutual Insurance Company, shall return the premium upon so much of the sum by them insured, as they shall be, by such prior insurance, exonerated from. And in case of any insurance upon the said premises, subsequent in date to this policy, the said the Independent Mutual Insurance Company, shall, nevertheless, be answerable for the full extent of the sum subscribed hereto, without right to claim contribution from such subsequent assurers, and shall accordingly be entitled to retain the premium by them received, in the same manner as if no such subsequent assurance had been made.”
The execution of the throe policies was admitted, and they were read in evidence at the trial.
It was admitted that the vessel sailed on the voyage indicated in the policies, and that she was injured to the amount of ^2189.04, (after deducting new for old;) that three suits, of which this is one, were respectively brought against said companies for this amount; and that judgment was given in favor of the plaintiff, Whiling, against the Sun Mutual Insurance Company, for the above amount, on (he 4th of December 1855, with costs; that the said judgment was satisfied and paid in full by the said Sun Mutual Insurance Company; that, during the trial of the case, no question of the proportionate or pro rata liabilities of said company was raised by it or its attorney.
The registry and American ownership of the vessel were admitted. And if was agreed that the facts admitted should be given in evidence in the case of the Sun Mutual Insurance Company against she Independent Mutual Insurance Company, then pending in the Superior Court for Baltimore city.
It was agreed that the premium, which was the consideration for the insurance made as above stated, by the Independent Mutual Insurance Company, was paid to the said corn*322pany, by Whiting, on the satisfaction of the judgment aforesaid by the Sun Mutual Insurance Company; and that the injury sustained, as above stated, was by perils insured against.
The defendant asked two prayers, and the plaintiff one. Whilst the prayers were being discussed, and before the court had given any decision thereon, the plaintiff’s counsel made an offer to the defendant’s counsel, which the latter refused to entertain. The offer was as follows:
“The Sun Mutual Insurance Company offers to the defendant to enter the case off, and to release the defendant, if the said defendant will give judgment for ¿Y/r $2189.04, in the case now (then) pending in this court, by the said Sun Mutual Insurance Company against the said defendant, or that, if judgment be confessed for the same amount in this ease, that the said Sun Mutual Insurance Company will enter the said case against the defendant off, and release the defendant.”
The court their rejected the plaintiff’s prayer, and, without passing on the defendant’s prayers, instructed the jury that, upon the facts stated in the admission of facts, their verdict must be for the defendant. To which ruling of the court the plaintiff excepted.
The verdict and judgment being in favor of the defendant, the plaintiff appealed.
The suit in this case was instituted in the name of James Whiting, the assured. The use of the Sun Mutual Insurance Company, it was conceded in argument, was entered after Whiting had received payment and satisfaction for his judgment against the Sun Mutual Insurance Company. And there is no evidence tending to show that the payment of that judgment was made with any understanding, agreement or expectation, that the present suit should be transferred to, assigned or entered, for the use of the Sun Mutual Insurance Company.
The appellant’s counsel have contended — and, I think, correctly so — that the three policies did not insure the same interest in the vessel, but that each policy was upon a sepa,*323Sate interest or portion in the vessel; that, at the commencement of the risk, there -was sufficient aliment for each policy, «and that, each then attached.
On the part of the .appellant it has also been insisted, that from the language of the American clause, as well as from '•the motives or circumstances which induced its adoption, it must be understood as designed to apply, only 'to cases of «-double or over assurance; and that the present case is neither «the one nor the other.
According to the ancient English rule, prior to the year 1763, if there were several policies of different dates, constituting a case of double insurance, the second policy only attaches upon or covers so much of the insurable interest as the prior policy did not cover; the second underwriter being only entitled to retain the premium pro tanto, where the commencement and termination of the risks and the perils insured against were the same.
In Newby vs. Reed, 1 Wm. Bl., 416, decided in 1763, it was held by Lord Mansfield, that in case of a double insurance, although the insured was not entitled to two satisfactions, yet he might recover the whole against either of the insurers, and leave him to recover a ratable satisfaction from the other insurers. This decision has been frequently spoken ■of as having introduced a new rule. It was adopted in Thurston vs. Koch, 4 Dallas, 348. This latter decision seems to have been considered by Mr. Justice Gibson, in Peters vs. Delaware Ins. Co., 5 Sergt. & Rawle, 481, as having occasioned the introduction of the American clause; which view is to be found repeated in several of the elaborate opinions given in the much contested and ably considered case of American Ins. Co. vs. Griswold, 14 Wend., 464, 473, 497, There the operation and effect of the clause was very fully considered; and the authorities bearing on the subject were examined with much care and ability. It is there, as elsewhere, said, the object of introducing the clause was to restore the ancient English rule, as it existed before the decision in Newby vs. Reed. In addition to the above pages in 14 Wend., see Brown vs. Hartford Ins. Co., 3 Day, 67.
*324The decision of the Supreme Court of New York, announced by Chief Justice Savage, in the case of American Ins. Co. vs. Griswold, was affirmed in the Court of Errors; Chancellor Walworth and twenty Senators uniting in the affirmance, Senators Tracey and Jones dissenting.
In that case, there were goods shipped on a trading voyage, insured in three policies on time. The value of the cargo exceeded the whole amount insured in the three polities. At the first port where the vessel stopped to trade, a portion of the cargo was landed in safety; the residue of the cargo, equal in value to the sum subscribed in the first .policy, was totally lost by.one of the perils insured' against. Each policy contained the American clause, and under that the first as-surer was held responsible for the whole sum subscribed in the first policy, without any right to claim contribution from the subsequent assurers. The dissenting opinion of Mr. Senator Tracy held that the'American clause in a policjr, applies only to cases of double assurance; that is, where the insufficiency in value to give aliment to the several policies exists at the time of executing the policy, and not when it is superinduced by the withdrawal of a part of the subject at risk, after the policies have all attached, and the risk in respect to each’, commenced.
Mr. Phillips and Mr. Parsons seem disposed to adopt the reasoning of Senator Tracy, as having given the correct interpretation of the American clause. 2 Phil, on Ins., sec. 1261. 2 Parsons’ Maritime Law, 97, 98, and note 1.
After careful investigation of the subject, I think the circumstances under which the American clause was first introduced, and the proper interpretation of the language employed therein, justify the conclusion that the clause is not applicable where there is no double or over assurance when the risk commences.
In the present instance, there was aliment sufficient to feed all the policies, at the commencement of the risk, consequently there was no double or over assurance; and therefore the clause can have no effect in this case.
*325In this conclusion, my brothers and myself concur. The residue of this opinion contains my separate views.
The next question, for consideration is, whether the appellant is entitled to a reversal of the judgment appealed from, if the policies are to be construed as though the American clause had not boon inserted?
Under such a construction of the policies, each company would have been answerable, only, for its ratable proportion of the loss. No one of them would have been bound to pay the whole, the one so paying the whole or more than its share, by compulsion, having the right to demand contribution from Ore others. They stood in no such relation to each other as co-sureties do; but each separately and independently liable for its ratable proportion of the loss, and no more. The Sun Mutual Insurance Company, therefore, was responsible, on account of the loss, for only jWA $2189.04, and had a valid legal defence, which might have been successfully urged against any larger demand, if sucli a defence bad been properly presented in due time, in the suit against that company by the assured.
A similar defence would have been equally available, if the two subsequent policies had not been made, for then, in the language of the books, the assured would have stood his own insurer, to the extent of his interest in the vessel uninsured by the first policy. The defence, however, was not made, and the judgment was permitted to be given against the Sun Mutual Insurance Company for the whole loss. This, I take it for granted, resulted from a belief that the American clause rendered that company liable for the whole sum. If then there was a mistake in permitting such a judgment and paying it in full, it was a mistake of law and not of fact.
Supposing that after the judgment had been thus rendered, instead of paying it, the defendant therein had filed a bill in equity to obtain relief, by having the same reduced to tile correct proportion of the loss for which the policy was legally liable; such relief could not have been granted; because, there was a legal defence which might have been availed of, but was not attempted to be made.
*326I do not understand the counsel for the Sun Mutual Insurance Company as having contended, that this company had any right of action to recover from the assured any portion of the money paid him, in satisfaction-of the judgment. They insist, however, that the payment was not designed to pay or to satisfy the debt or portion of the loss due from the Independent Mutual Insurance Company, the defendant in this suit; but that the claim of the assured against this defendant was not extinguished by the said payment; and that there was an equitable consideration, arising from the payment by mistake, sufficient to sustain an equitable assignment of this suit from Whiting to the Sun Mutual Insurance Company; and therefore the use, for that purpose, was properly entered, and the suit should have been sustained.
But, in reply to these views, it is said a marine insurance is a contract of indemnity; and whenever the loss or damage sustained is paid in full, or made good, even aliunde, there is an end of the damnification, and the insurer is no longer liable.
In Godsall vs. Boldero, 9 East., 72, the plaintiffs, as creditors of Mr. Pitt, insured his life, for the purpose of securing their debt. After his death this debt was paid by his executors, out of a sum of money granted by Parliament for that purpose. A suit being instituted upon the policy to recover the amount of the insurance, the Court of King’s Bench decided adversely to the plaintiffs. The judgment of the court, as delivered by Lord Ellenborough, maintained the doctrine that the life policy was a contract of indemnity, and the debt of Mr. Pitt having been paid by his executors, the insurers were no longer responsible.
This decision, after being repeatedly quoted and followed, and sometimes its correctness doubted, was overruled in 1854, in the Exchequer Chamber, in the case of Dalby vs. The India and London Life Assurance Co., 80 Eng. Com. Law Rep., 365, and same case in 28 Eng. Law & Eq. Rep., 312. It will be seen, however, that the reason assigned for overruling the decision of Lord Ellenborough is, that he committed an error in considering a life-policy to be a contract of indem*327nity. After speaking of his lordship’s reliance upon the decision of Lord Mansfield in Hamilton vs. Mendes, as showing that the plaintiff’s demand wa,s for an indemnity only; Baron Parke then says: “Lord Mansfield was speaking of a policy against marine risks, which is in its terms a contract of indemnity only.” Again the Baron speaks of being quite satisfied, (hat the case of Godsall vs. Boldero was founded on a mistaken analogy; alluding, of course, to a mistake in considering a life-policy a contract of indemnity in analogy to a marine policy.
In tin: more recent case of Law vs. The London Indisputable Life-Policy Company and Robertson, 1 Jurist, 178, N. S., (Part 1,) the decision of the Exchequer Chamber, overruling Godsall vs. Boldero, is referred to as placing life-policies on a right footing. Vice-Chancellor Wood then says: “Policies on lire and on marine risks are policies éxpressly, in the very words of the policies, made to recompense a loss which the parties may sustain in consequence of the calamities against which the policies are effected; therefore, when that loss is made good aliunde, the company are not liable in any way, under the express terms of their contract, in respect of that which has not accrued, viz., loss; but when the question comes to be a question on a life-policy, there is no such contract in the policy itself. The policy never refers to the cause or reason for affecting the assignment. ’ ’ Again, he says: “They” (the company) “have founded their calculation upon the probability of duration of human life, and they get paid the full value of that calculation. On what principle can it afterwards be said, that because somebody else is good enough to satisfy the object which the insured had in view when he effected the assurance, the insurer should be released from the contract?”
An examination of the authorities will clearly show, that if the principle announced in Godsall vs. Boldero had been applied to a fire or marine insurance, the decision would not have been held erroneous. The error consisted in holding a life-policy to be a contract of indemnity, in analogy to a fire or marine policy.
*328Merryman vs. The State, 5 H. & J., 423, has been referred to by the appellant’s counsel, as having an important bearing on the present controversy. But, in that case, no contract of indemnity was involved.
The payment of the money by Murray, on which the action was sustained, was a payment made by him under a mistake of fact, and not of law.
In the opinion of the court, they refer to prior decisions of their own, based upon the principle that a payment by a security will operate as an assignment of the debt against the principal, so as to enable him to sue, or execute for it, in the name of the creditor, for his use. After citing Sotheren vs. Reed as one of the cases of this description, that, is shown to be where a surety in a testamentary bond, having paid the creditor his money, and satisfaction of record being entered on the judgment against the surety, he was deemed equitably entitled to the judgment against his principal. And then the opinion concludes thus: “Under all the circumstances of this case, we are of opinion that it is within the principles of our former decisions, and we therefore affirm the judgment.”
In the case before us, there is a contract of indemnity. If there was a mistake in paying the loss, it was a mistake of law, and not of fact. And there is no relation of principal and surety, or of co-sureties between any of the parties connected in any way with the matter in dispute. This case is therefore essentially different from that of Merryman vs. The State.
Williamson vs. Allen et al., use of Riston, 2 G. & J., 344, is a suit upon a promissory note drawn by Williamson in favor of Wilson, Williamson & Co., and by them endorsed to S. & M. Allen <fc Co. The note not being paid at maturity, suit was instituted by the endorsees. Riston had promised to pay the note if not paid by the maker or endorsers. After the institution of the suit, and before the trial, he paid the plaintiffs the amount of the claim. The amount so paid was in different sums, at different times. When the last payment was made, the plaintiffs gave Riston a receipt, stating the different sums, and concluding: “which is in full of *329a note, held by ns against D. Williamson, for $2500, which note is now in suit, and the proceeds of the same properly belonging to said Riston.” A few days before the trial, the suit was entered for Riston’s use.
The defence set up was, that the indorsees had been paid and satisfied the full amount of the note, which was thereby extinguished, and therefore the suit could not be prosecuted to judgment, in the name of the indorsees, for the use of Riston, to recover the money for which the note had been given. Prayers to that effect were submitted to the court below, on the part of the defendant. The court refused to grant them, “being of opinion that the defendant had adduced no evidence to show that any payment had been made to the plaintiffs by the defendant,,or by his agent; but that the sum received by the plaintiffs from Riston must be considered as a consideration paid by him to the plaintiffs for an equitable assignment of the plaintiffs’ legal interest in the cause of action.”
The decision was affirmed, and, evidently, upon the ground that it ivas shown by the receipt and the other evidence in the cause, that Riston bad not paid the claim on the defendant’s account, or as his agent, with a view to discharge the note, but with the intention to acquire the beneficial interest himself.
It has been admitted in the present case, that the Sun Mutual Insurance Company paid and satisfied in full the judgment rendered against it; which was for the whole Joss of the assured. And I have soon nothing in this record to show that the said company, before or at the time of the payment, had any expectation or design of obtaining, by reason of such payment, any equitable assignment of, or beneficial interest in, the present suit; or that said Company had any other design or intention than to satisfy and extinguish Whiting’s entire claim for his loss.
In the consideration of this case, it should be borne in mind, that the judgment against the Sun Mutual Insurance Company, was in a court of competent jurisdiction, which judgment, awprtained the liability of that Company, under *330its policy, to be the whole amount of the loss sustained by the assured.
It appears that the judgment against the ¡Sun. Mutual Insurance Company for the whole amount of the loss, must, have been paid after the institution of this suit and before the trial.
Entertaining the views which have been expressed ip this opinion, I deem it needless to inquire whether there was- or was not error in the refusal of the prayer submitted by the plaintiff, or in the instruction given by the court. If the ruling of the court was erroneous- in any respect, it could only have been so, in my opinion, because the plaintiff had a right to nominal damages, inasmuch as- the payment of the loss to the assured by the Sun Mutual Insurance Company was made after the commencement of this suit. If, however, on that account there ought to be a reversal of the judgment, still I think there should be no procedendo, for the reason that the plaintiff is not now entitled to recover the money claimed Rawlings vs. Adams, 7 Md. Rep., 54.