Jonathan Bodle and James B. Bodle vs. The Chenango County Mutual Insurance Company, et al.

Jonathan Bodle and James B. Bodle vs. The Chenango County Mutual Insurance Company, et al. At common law it seems no action lies upon a policy of insurance in the name of the assignee of such policy. But under the pattern statute incorporating mutual insurance companies, (Slat. 1836, ch. 41,) the alienee of the property insured having the policy assigned, and ratified to him by the company, may recover for a loss in his own name. Where the insured in a mutual insurance company transferred only an undivided interest in the property insured and the company gave a written consent that the policy “remain good” to the insured and the alienee, and an entry was made *n the hooks oi the company, recognizing such alienee as a member thereof, there being no assignment of the policy, held, that no action at law could be maintained either by the insured or the alienee, or by them jointly, to ••ecover for the loss of the joint property; and therefore further held, that the case was a proper one for relief against the insurance company in a court of equity. By the terms of the policy of insurance, the insured was required within thirty days after a loss to transmit to the secretary of the company a particular ac count of such loss. The insured furnished a statement of loss within the proper time, made out under the advice of an agent of the company, and subsequently produced his books at the request of the company for further explanation. The company made at that time no objection to the account and offered to pay a sum amounting to about three-fourths of the loss. Subsequently, on being pressed for payment, they objected generally to the account as insufficient Held, that under the circumstances the objection was no defence to a suit in equity for relief oil account of the loss of the goods insured. Appeal from the supreme court in-equity. In May, 1845, Jonathan Bodle and James B. Bodle filed their bill in the Court of Chancery against The Chenango County Mutual Insurance Company. After the commencement of the suit the effects of the insurance company were by an order of the court of chaneery placed in the hands of Austin Hyde, as receiver, and Hyde was then by stipulation and an order of the court made a co-defendant in the cause. The case was this : On the 8th of June, 1839, the said insurance company issued a policy to the complainant Jonathan Bodle, whereby they insured the sum of $600 on his dwelling house, $600 on his store, and $1400 on his goods therein. In May, 1841, the complainant James B. Bodle entered into partnership with Jonathan Bodle, and from that time they jointly owned the goods in the store covered by the policy. Having applied to the 'company to have the insurance continued for the benefit of the firm, they received from the company a written consent as follows : “Chenango Co. Mutual Ins. Co. Office, May 26, 1841. The consent of this company is given that policy No. 2396, to Jonathan Bodle, shall remain good, to wit: $600 on dwelling house, and $600 on store to Jonathan Bodle, and $1400 on goods to J. Bodle & Son, as requested in notice dated May 15, 1841. A. Chandler, Sec’y.” About the same time that the above consent was given, an entry was made by the secretary in the books of the company recognizing James B. Bodle as a member. On the 25th of December, 1842, the store and goods therein were destroyed by fire. The company having neglected to pay the loss, the complainant, Jonathan Bodle, brought an action at law in the supreme court upon the policy to recover for the loss upon the store. The declaration in that suit, contained also a count setting forth the circumstances above mentioned, relating to the interest of James B. Bodle in the goods, the consent of the company above mentioned, alleging notice of the loss, &c. and concluding with a claim of damages large enough to cover the loss "both on the store and on the goods. After that suit was at issue, the company were requested to waive any technical objection to a recovery for the loss on the goods, and to consent that the claim in respect to such loss might be litigated on the merits in the same suit. This the company declined to do. That suit was tried in August, 1844, and the plaintiff had a verdict for the amount of the loss on the store only, on which judgment was perfected. The circuit judge, before whom' the cause was tried, upon the situation of the claim for loss on the goods being stated, ruled that such loss could not be recovered in that action, and therefore no evidence in regard to it was given to the jury. The bill in this cause was subsequently filed for the purpose of compelling the company to execute to the complainants jointly, a new policy upon the goods for the sum of $1400, to be dated on the 20th of May, 1841, that being the day when the company consented that the policy should remain good to the complainants jointly, as it respected the goods ; or to compel the company to pay to the complainants the sum of $1400, the amount of their loss on the goods in question. One of the grounds of defence set up in the answer was, that the complainants had an adequate remedy at law. The answer also alleged that the complainants had not furnished a proper account cf their loss, and insisted in general terms that the company had a legal defence to the claim. There were some other facts relating to the statement of loss furnished by the, complainants, and to other grounds of defence argued in this court, which will sufficiently appear in the opinion of Gray, J. Parker, vice chancellor of the third circuit, to whom the cause was referred for hearing, made a decree in favor of the complainants, declaring the company to be indebted to the complainants in the sum of $1400 and interest, and directing the defendant Hyde, as receiver, to pay that sum out of the property and, effects of the company. The supreme court in equity, on appeal, so modified the decree as to make the sum payable ratably out of the funds in the hands of the receiver, or which might come into his hands, and in all other respects affirmed the decree with costs. The defendants appealed to this court. II. R. Mygatt, for the appellants. 8. B. Gushing, for- the respondents. [MAJORITY — Gray, J.] Gray, J. The seventh section of the company’s charter, which, it is insisted, gives to the respondents a remedy at law and which is urged as a ground for dismissing the bill in this cause, provides that “ the grantee or alienee having a pobcy assigned to him may have the same ratified and confirmed to-him for his own proper use and benefit upon application to the directors,” and if ratified and confirmed* the assignee or alienee “ shall be entitled to all the rights and privileges and be subject to all the liabilities to which the original party, to whom the policy issued, was entitled and subjected under this act.” This section, which is incorporated in many if not all our mutual insurance company charters, it has been held in the cases of Mann v. The Herkimer Co. Mu. Ins. Co. (4 Hill, 187,) and Ferris v. North Amer. Fire Ins. Co. (1 id. 71,) authorizes the prosecution of an action on the policy assigned, in the name of the assignee, and is so far an alteration of the rule of the common law, which admitted the prosecution in such a ease in the name of the insured only, and like every other enactment which varies the common law, must be construed strictly. By applying this rule, no action at law for the recovery of their loss can be sustained in the name of the respondents in this case against the appellants. It is entirely clear from the facts admitted by the pleadings, that in this case there was not an assignment of the policy at all. There was an assignment only, by one of the respondents to the other, of part of the property insured and an agreement by the company that the policy which had been previously issued to one, and covering the property which by the assignment became the joint property of the two, might stand and enure to the benefit of both. This was the arrangement between the respondents and the company. There was no assignment of the policy or of any part of the policy by Jonathan Bodle, to whom it was issued, to James B. Bodle, who subsequently became a joint owner with him in the property. The ratification of the sale of part of the property by Jonathan to James B. Bodle, and the agreement and assent of the company entered upon their books that the policy should remain valid and stand as a security for both, did not certainly operate as an assignment of the policy or a transfer of such an interest therein from one to the other as is contemplated by the seventh section of the company’s charter, and as would authorize the prosecution of an action at law in the name of the assignee. I regard the transaction between the Bodies and the company, that is, the assent of the company to the transfer of the property and their agreement that the policy issued to one should remain good as a security for both, as creating an obligation on the part of the company which is peculiarly and exclusively the subject of equitable cognizance. Chancery is, therefore, the proper and indeed the only forum of relief to the respondents, and the action was rightfully prosecuted in that court. The objection to the respondents’ recovery on the ground ot the omission of the respondents to furnish to the company proper and sufficient evidence of their loss, is also not well taken. The pleadings show a willingness and an offer on the part of the company to pay to the respondents for their loss on the evidence submitted, the sum of one thousand dollars, the amount proved being one thousand four hundred dollars. I am not aware, nor does it appear that the company at this time made any specific objection either to the manner of the proof or the items of the account, or the principles upon which the estimate of loss is based. It is true that the company, at the time when they were furnished with the account of loss, requested the respondents to appear with their books before the executive committee of the company, for the purpose of explaining the account, so that the company might understand it. Upon this request one of the respondents, with the books and papers of their firm, did accordingly attend before that committee and exhibited to them the books, and gave such explanations as he was capable of giving on the subject; and although the committee did not, in express terms, acknowledge themselves satisfied, yet they manifested no dissatisfaction, nor did they interpose any objection to the account; and their offering to liquidate the claim by paying $1000, which is about three-fourths of the amount, and coupling that offer with no condition or qualification, must, I think, be regarded as a virtual admission of the correctness of the entire account. It appears, it was not urn til they were subsequently written to by the respondents’ attorney, and threatened with a prosecution, that they began to make objection to the sufficiency of the account; and the objection then made was general, that the account was not such as was required by the policy, without pointing specifically to •any particular objection. By the terms of the policy, the person sustaining loss by fire is required, within thirty days after such loss, to deliver to the secretary of the company “ a particular account of such loss.” ■ What is particularly required to be stated in that account, the policy does not prescribe; but the respondents, as is disclosed by the testimony in the cause, for information in this respect, and to enable them to comply with the requirements of the policy, applied to one of the agents of the company and made out and transmitted to the company their account of loss according to the instructions and advice ot the agent. This agent is a witness for the. respondents, and his testimony shows not only his agency, advice and direction in the premises, but that he was a member of the company, and as such had previously sustained a loss therein by fire, and that his loss was paid by the company upon an account made out by him in the same manner, and upon the same principles as the account of the respondents; and that the mode adopted in making out the loss of the respondents was the fairest and most accurate method of ascertaining their loss, provided their books were correctly kept.- The accuracy of their books, besides being affirmatively established by the testimony of their clerk, was not questioned by the company, to whom they had been submitted for their inspection. 1 am inclined to think, therefore, that the account of loss furnished to the company was, at least, a virtual compliance with the requirement of the policy. If not, it devolved upon the company to make objection at the time, and to show wherein it was insufficient. The objection that the account was not such a particular account as was required by the policy, if made at all, was too general and indefinite. It should have pointed out particularly wherein the account was incorrect, so as to have enabled the respondents, if really it was- defective, to correct it. I am clearly of the opinion that this ground of objection, like the first, is not well taken. The objection arising out of the proceedings of the attorney general against the company as an insolvent corporation, subsequent to the filing of the bill by the respondents, and whereby the insolvency of the company has been judicially declared, is, 1 think, not available as a defence, otherwise than to authorize the modification of the decree of the vice chancellor, made by the supreme court, directing a pro rata collection out of the funds of the company. Nor is the objection resting on the forfeiture of the policy for the non-payment by the respondents of the assessment on their premium note, available. The pleadings do not, in my opinion, lay a foundation for such a defence. The general allegation in 'he answer, that the company has a legal defence to the claim of the respondents, set up in their bill, will not, I apprehend, admit of this specific defence ; but if it did, the particular matter here claimed would not be available, for the reason that the bylaws of the company, in order to impose upon the policy holders the legal liability to pay assessments, require the publication of thirty days’ previous notice of the assessment in a newspaper of the county, and of which publication of notice there is no evidence in the case. This defence is, therefore, clearly inadmissible for this reason. The decree of the supreme court must, therefore, be affirmed. Decree affirmed. Thai the assignee of a policy cannot recover upon the same at common law, see Wilson v. Hill, 3 Metc. 66 ; Smith v. Saratoga Ins. Co., 3 Hill 508, s. c. 1 Id. 497. See, also, Wheeling Ins. Co. v. Morrison, 11 Leigh 354; Howard v. Albany Ins. Co., 3 Denio 301 ; 1 Phillips on Ins., ed. 1840, p. 34, et seq. Mr. Marshall says, “ a policy, like every other chose in action, may be assigned in equity ” (p. 800), by which he doubtless means, that if the property insured he assigned or conveyed, the policy may be assigned to the same person, without the consent of the insurers, so as to give him a right of action in the name of the assignor, leaving to the underwriter all right of set off, and objections to a claim for a loss, which they would have had against the assignor ; this being the construction of an equitable assignment of other dioses in action. This opinion coincides with divers cases. Gourdon v. Ins. Co. of N. A., 3 Yeates 327 ; s. c. 1 Binn. 430 ; Rousset v. Same, 1 Binn. 429 ; Delaney v. Stoddart, 1 T. R. 22.