Court Opinion

ID: 8774014
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:54:47.958217+00
Date Added: 2024-06-11T17:02:25.124038
License: Public Domain

SHELBY, Circuit Judge
(after stating the facts as above). The policy issued by the complainant, and each policy issued by the three insurance companies which are made defendants, contain this clause:
“This company shall not be liable under this policy for a greater proportion of any loss on the described property or for loss by and expense of removal from premises endangered by fire than the amount hereby insured shall bear to the whole insurance, whether valid or not, or by solvent or insolvent insurers, covering such property.”
It is alleged in the bill “that by virtue of said contracts of insurance each insurer is interested in the liability of the other.” And it is urged in argument here that “this clause makes the contracts interdependent.” Whether the contracts are interdependent, or separate and independent, is an important, if not the controlling, question presented. By the terms of the clause quoted, if one of the policies was held to be void, it would in no way affect the liability of the other insurers. The complainant’s liability'- would not be affected if all three of the other policies issued by the defendant insurers should turn out to be void; nor would it be affected by one or all of the three defendant companies becoming insolvent. The policy issued by complainant would be in no way affected by the result of the enjoined suits on the other three policies. Whether the companies won or lost in these suits would not affect the insurer or insured so far as the policy issued by the complainant is concerned.
In Lucas v. Jefferson Insurance Co., 6 Cow. (N. Y.) 635, the policies construed contained this clause:
“In case of any other insurance upon the property hereby insured, whether prior or subsequent to the date of this policy, the insured shall not, in case oí loss or damage, be entitled to demand or recover on this policy any greater portion of the loss or damage sustained than the amount insured shall hear to the whole amount insured on the said property.”
The court held that, where there are several policies containing this clause, they are all, and each, liable to pay the ratable portion mentioned in the clause, though it happen that some have voluntarily paid more than their share, and that there is no contribution between policies containing this clause.
In Hanover Fire Insurance Co. v. Brown, 77 Md. 64, 73, 25 Atl. 989, 27 Atl. 314, 39 Am. St. Rep. 386, the court was called on to construe a similar clause. The court said:
“In this case the defendant contracts to pay the proportion of the loss which, the amount insured by it bears to the whole sum insured on the property in all the policies; and it is stated in the evidence that the other policies had substantially the same stipulation. The contracts are entirely separate and independent of each other.”
In Liverpool, London & Globe Ins. Co. v. Verdier, 35 Mich. 395, 398, Cooley, Chief Justice, speaking of a similar clause in a policy, said that the plain purpose was “to protect the company against the necessity of *227contesting with the insured any question of the validity or invalidity of other existing policies.” Certainly the effect of the clause is to individualize the risks of the several insurers, making their respective liabilities depend, not on the amount of insurance that may be recovered from another, nor on the validity or solvency of another policy, but solely on the aggregate amount of the policies; the amount of the loss being ascertained.
It seems to us to follow logically and clearly that neither policy in any way depends on the other, but, to use the language of the Maryland Supreme Court, that “the contracts are entirely separate and independent of each other.”
It is true that the amount of the loss must be ascertained before the extent of complainant’s liability is fixed. That being ascertained, no other factor is needed on which to base a judgment, except the aggregate amount of insurance shown by the several policies. It is urged that, in the four actions on the separate policies, the several juries trying the different cases might find different verdicts as to the value of the property lost by the fire, and that this fact affords ground for equitable interference. That contention must be looked at from the position of the complainant.
If the policy issued by the complainant was the only one involved, no one would claim that it had the right to go into chancery to have the lost property valued. All would agree that, as between the complainant and Scruggs & Echols, a jury could value it in the suit at law on the policy. Do the actions at law on the other policies against other companies make it different? Certainly not, if the appellee cannot be in any way affected by the suits on the other policies.
The appellee is sued at law on a policy for $2,1500; the other defendant companies being sued at law on other policies for different and smaller sums. If the juries trying the cases against the other insurers should place too high a value on the property lost, it would in no way affect the liability of the complainant on the policy which it issued; nor would it be affected if the value was fixed at too small a sum. The complainant has no interest whatever in the question of the value fixed in the suits against the other insurers. The verdict and judgment in the other suits will have no effect on the suit at law against the complainant. The complainant is only concerned about the amount of the other policies, whether valid or not, and in the value of the property destroyed by the fire as it may be fixed by the verdict in the suit on the policy it issued, and on that issue it can present evidence and be fully heard in the suit at law. As it has no interest in the other suits pending in the state court, we see no reason why the Circuit Court should perpetually enjoin the prosecution of those suits at the instance of the complainant.
The fact that juries in the different suits may value the property destroyed at different sums is immaterial to the complainant. The clause was not intended to prevent this possibility. Such variations as to estimated value are to be expected, for the administration of the law cannot be made perfect. The fact that such variations may occur does not seem to us a ground of equity jurisdiction at the instance of a party not affected by it. The complainant is only interested pecuniarily in the *228value that may he placed on the property by the jury in the suit against it. That value is as apt to be correct and just as the value fixed by a master in chancery.
The very question we are considering here has been recently passed on by the Circuit Court of Appeals for the Eighth Circuit. That court said:
“It is asked that a court of equity take jurisdiction of the case for the purpose of ascertaining this value, for the reason that different juries in actions at law might return different verdicts as to the value of this property, and thus the amount to be paid by one insurance company might be greater or less than that of some other company. If the peculiar and special duty of juries to pass upon property values in matters at law may be taken away and given to a chancellor, merely because different juries may render different verdicts upon like or similar facts, then trial by jury in civil actions no longer exists. The idea of handling these cases through a master in chancery,, when the only question at issue is the value of the property destroyed, because there is no adequate remedy at law, shocks the legal mind.” Mechanics’ Insurance Co. v. C. A. Hoover Distilling Co., 173 Fed. 888, 891.
Our attention is called to the case of Home Insurance Co. v. Virginia-Carolina Chemical Co. (C. C.) 109 Fed. 681. It is true that that case, in some of its features, seems to sustain the contentions of the ap-pellee ; but there are expressions in the opinion which indicate that the learned Circuit Court might have construed the bill in that case as one to reform a policy. That case was affirmed by the Circuit Court of Appeals for the Fourth Circuit. 113 Fed. 1, 51 C. C. A. 21. The appellate court seemed to find the chief equity of the bill by viewing it as one to prevent a multiplicity of suits. The court said:
“The main object and purpose of this bill is to prevent a multiplicity of suits, all involving the same legal questions, founded upon similar issues of fact.” Id., page 3 of 113 Fed., page 24 of 51 C. C. A.
Without considering that opinion further, it seems to us clear that the bill under consideration in the instant case cannot be sustained as one to prevent a multiplicity of-suits. There was only one suit at law pending against the complainant, and it was not threatened with any other. The fact that the insured, Scruggs & Echols, were required to bring several suits — one against each of the insurers — was no reason to authorize the complainant to appeal to equity to prevent a multiplicity of suits. Scottish Union, etc., Ins. Co. v. J. H. Mohlman Co. (C. C.) 73 Fed. 66; Thomas v. Council Bluffs Canning Co., 92 Fed. 422, 34 C. C. A. 428; Turner v. City of Mobile, 135 Ala. 73, 119, 120, 33 South. 132. It does not rest with the complainant to urge as a foundation for its suit that the defendants may thereby be saved a multiplicity of suits. Equitable Life Assurance Society v. Brown, 213 U. S. 25, 51, 29 Sup. Ct. 404, 53 L. Ed. 682.
Our attention is also called to the case of Tisdale v. Insurance Company, 84 Miss. 709, 36 South. 568, where the Supreme Court of Mississippi affirmed the decision of the court below, which had taken jurisdiction in equity on facts somewhat similar to the case at bar. The question was not there given elaborate consideration by that learned court, probably because of a constitutional provision in that state that no decree in chancery, shall be reversed on the ground of a want of jurisdiction to render the decree from an error or mistake as to wheth*229er the cause in which it was rendered was of equity or common-law jurisdiction. Const. Miss. 1890, § 147; Hancock v. Dodge, 85 Miss. 228, 233, 37 South. 711. See, also, 1 High on Injunctions (4th Ed.) p. 80, § 63a.
Several other grounds of demurrer to the bill are urged on our attention, but the views we have expressed as to those considered makes it unnecessary to decide others.
The decree of the Circuit Court is reversed, and the cause remanded, with instructions to sustain the demurrer to the bill, and for further proceedings consistent with the opinion of this court.