Sleeper v. Union Insurance

Dickerson, J.,

dissenting. It is the uniform doctrine of all the cases that an action may be brought and maintained upon a policy of marine insurance, in case of loss, containing the clause, “on account of whom it may concern,” either in the name of the person who directly negotiated the insurance or in that of the party who owned the property and was intended to be insured. Farrow v. Commonwealth Ins. Co., 18 Pick., 53. Sargeant v. Morris, 3 Barn. & Ald., 277. Burrows v. Turner, 21 Wend., 276. 2 Phillips on Ins., 610.

The party in interest, in such case, is entitled to maintain an action upon the policy in his own name although, by the terms of the policy, the loss is made payable to the party who directly negotiated the insurance. Williams et als. v. Ocean Ins. Co., 2 Metc., 303. Farrow v. Ocean Ins. Co., 18 Pick., 53.

The foregoing principles apply in cases where the party who effected the insurance had no pecuniary interest in the policy. Where, however, a policy, containing the clause, “to whom it may concern,” loss payable to the party who effected the insurance, is procured for the joint benefit of both parties, the general principles of law applicable to joint obligees, joint promisees and others, *396obtain. In sncb case, if one of tbe joint obligees or promisees dies, tbe survivor alone can maintain an action upon tbe contract.

In 1 Chit. PL, 19, the author says, that “when one or more of several obligees, covenantees, partners or others having a joint legal interest in the contract, dies, the action must be brought in the name of the survivor, and the executor or administrator of the deceased must not be joined; nor can he sue separately, though the deceased alone might be entitled to the beneficial interest in the contract; and the executor must resort to a court of equity to obtain from the survivor the testator’s share of the sum recovered.”

So in Gould’s PL, § 61,1th ed., the same doctrine is laid down with like clearness and force as follows: “on the death of one of two or more joint obligees, promisees, &c., the action must be brought by the survivor or, if there be more than one, by all the survivors. Por, by the common law, rights of action, vested jointly in several persons, survive entire, on the death of any of them, to the survivors. If, therefore, one of two joint obligees dies, his executor or administrator can neither join in an action upon the contract with the survivor, nor sue alone at law for the part which belonged to his testator or intestate.” The same principle runs through all the authorities upon this subject. Clark v. Howe, 23 Maine, 560. Strang v. Hirst, 61 Maine, 9. Peters, admr., v. Davis, 7 Mass., 257. Collyer on Part., 1 American ed., § 666.

In the case at bar, the policy contained the clause,’ “on account of whom it may concern,” “loss payable to E. K. Alexander,” who negotiated the insurance. Alexander died before any action was brought upon the policy. The jury found specially that the insurance was effected for the benefit of Alexander and the plaintiff jointly. They were, therefore, joint promisees. The plaintiff sustains the same relation to the policy as he would if his name had appeared upon the face of it. In the contemplation of the contract he was the party whom the defendant company promised no less than Alexander. Both stood upon the same footing as joint promisees.

According to the foregoing principles, upon the death of either, an action upon the policy could only be maintained in the name *397of tbe survivor. Tbe action brought upon the policy, by the administratrix of Alexander, could have been successfully defended upon the ground that no right of action vested in her under the policy by virtue of her capacity as administratrix. But the defendant company, for some unexplained if not unexplainable reason, after ample notice of the plaintiff’s claim and an offer on his part to undertake and prosecute the defense without cost to them, suffered themselves to be defaulted, and satisfied the judgment thus recovered against them, before the present plaintiff knew that any action had been commenced.

The judgment recovered by the administratrix under these circumstances is no bar to the plaintiff’s suit. He is not estopped by that judgment either as a party or a privy to it. His name nowhere appears of record in that case, nor was he in any way made privy to it. He was ignorant of the whole proceeding, and not only had no opportunity, but was denied the right, to defend that suit. That judgment does not purport to have been recovered in any respect for the benefit of the present plaintiff. On the contrary, it excludes every theory of his interest or privity therein, as the record shows that it was recovered upon the allegation' of Alexander’s exclusive ownership of the policy. If it be said that the plaintiff was interested in the question raised and adjudicated upon in that suit and was therefore privy to it, the answer is that, by the acts of the defendant company, the plaintiff was precluded from showing his interest, and that they are not permitted to plead their own wrong in bar of the plaintiff’s rights. They compelled his silence then, and ought now to be silent themselves. The payment of the loss by the defendant company to Alexander’s representative, under these circumstances, affords the defendants no protection against their liabilty to pay the plaintiff.

It is no valid objection to the maintenance of this suit that the loss is made payable to Alexander by the terms of the policy. This provision simply makes Alexander the appointee or agent of the plaintiff to receive the amount that may become due to him under the policy. It is a personal trust, revocable at the pleasure of the plaintiff, during the life time of Alexander, and is revoked ijyso facto, by his death. The notice of his claim given by the *398plaintiff to the defendants and his protest against the payment thereof to Alexander’s administratrix were sufficient to advise them that the authority given to Alexander to collect the loss for him was revoked, and that they would make such payment to her at their peril. Besides, the authority of Alexander to collect and receive the loss, was personal, and did not enure to his representative, but terminated at his decease. His administratrix, as we have seen, had no right to maintain ah action on the policy, upon any other ground, than that he was the sole owner thereof, which the jury by their verdict have negatived.

The defendants moved to set aside the verdict, not in terms, because it is against the instructions of the presiding justice, but because it is against law. The jury were instructed as follows : “If the action is brought in the names of the persons for whose benefit it was procured, it must be brought in the names of both parties. ■ But the suit may be brought in the name of the agent and he brings it in trust for the benefit of the person for whom the policy was procured. If it was for the benefit of both Sleeper and Alexander, each having an interest in the policy, then the widow having the policy might bring a suit and recover. Then, as I understand it, she would get judgment for the whole. Then what would be the result ? If the defendant company had notice that somebody else had an interest in the policy and they paid over a portion of that judgment wrongfully, the judgment to that extent would remain unsatisfied and might be enforced to the extent of his interest, if you are satisfied that he had an interest. So that if upon the whole evidence you find that the policy was made for the benefit of both parties and judgment was obtained in the name of the administratrix, then I instruct you that this action cannot be maintained.”

It is obvious that the verdict of the jury, interpreted by the special finding, is contrary to this instruction, and it is also clear from what has already been said that this instruction is erroneous, and that the verdict of the jury may be sustained in this respect by both law and fact. As it is not claimed, and does not appear, that the verdict is against law upon any other grounds, the verdict cannot be set aside for the reason alleged.

*399The error in the opinion of the chief justice consists in the assumption that the administratrix of one of the parties interested in a policy of insurance has the same right to bring an action upon it, that her intestate had in his life time. This is contrary to the doctrine of the most approved text books, and the hitherto unbroken line of authorities, hereinbefore cited. No case is cited to sustain this view of the case, nor is it believed that any one can be found. The case of Burrows v. Turner, 24 Wend., 276, simply decides that where one of the parties originally interested in a policy of insurance collects the whole amount of the loss in his own name, and withholds from the other party his share, he is liable to such party, therefor, in an action for money had and received. In that case both of the parties were living, and the question, whether the representative of a deceased party jointly interested in a policy of insurance with another person or the survivor alone can maintain an action upon it, did not arise and was not considered by the court. I cannot resist the conclusion that the doctrine of the chief justice upon this branch of the case is not sustained by argument, principle or authority ; it is petitio prineijoii.

Barrows, J., concurred in the dissenting opinion. Daneorth, J., concurred in its result. Peters, J., being interested, did not sit.