Court Opinion

ID: 7334862
Source: CourtListenerOpinion
Date Created: 2022-07-25 22:52:20.933012+00
Date Added: 2024-06-11T16:20:12.104145
License: Public Domain

INGRAHAM, J. (dissenting).
I concur with Mr. Justice O’BBIEN as to the disposition made of the claim against the defendant on account of the loss by the failure of Lally & Collins, but I do not agree that the clause 12a, annexed to the policy, is so uncertain as to its real intent that it cannot operate as a term of the policy. By the policy the defendant agreed to indemnify the plaintiff against loss “to the extent of, and not exceeding, fifteen thousand dollars, resulting from insolvency of debtors over and above a net loss of $3,750 (thirty-seven hundred fifty dollars), first to be borne by the said indemnified.” By clause 12a, which, by the terms of the policy itself, was made a part of the contract as fully as if it were recited at length therein, it is provided:
“To simplify adjustment, and to avoid disputes, it is agreed that such sum of gross loss shall be the limit to be borne by the indemnified, as less 25 per cent, will equal the agreed amount of annual net loss.”
It is admitted in the agreed statement of facts that the sum of $5,000, less 25 per cent., will equal the agreed amount of annual net *511loss, viz. $3,750. In order to provide a method by which such net loss could be ascertained, it was agreed that a gross loss of $5,000 would produce a net loss of $3,750; or, in other words, that by the agreement in the case of debtors owing $5,000 an amount should be fixed which would result in a net loss to the creditor of $3,750, and there should, therefore, be no claim against the defendant until there was a gross loss of $5,000, it being assumed that, where debtors of the insured failed owing $5,000, the insured would receive as dividends or part payment of such $5,000 in debts 25 per cent., and that to insure the insured obtaining that sum of 25 per cent, it was agreed that the claim going to make up this sum of $5,000 should not pass to the defendant, but should remain the property of the insured, who would be entitled to receive any dividend or payments made thereon. I fail to see where there is any difficulty in construing this condition annexed to the policy. Where a loss is incurred in consequence of the failure of a debtor, the gross loss would be the amount owing by the debtor at the time of the failure. The net loss would be the amount that the creditor would lose after all dividends upon the debtor’s estate, or all partial payments that would be received by the creditor on account of the indebtedness after the failure. It was the net loss of $3,750 that the assured was to sustain before there was a liability under the policy, and, in order to ascertain what that net loss should be, the parties agreed that it was to be considered that the gross loss, or the amount that the debtor owed when he failed, would be reduced by 25 per cent, by dividends received from the debtor’s estate. The parties have made their contract, which seems to me to be reasonably clear and capable of enforcement, and I can see no reason why it should not be enforced. I think, therefore, that the defendant was liable only where the loss sustained by the plaintiff by the failure of his debtors exceeded the gross sum of $5,000, and, as there is no evidence that such a gross sum was exceeded, the defendant was entitled to judgment. For that reason I think the judgment should be reversed.
McLaughlin, j., concurs.