Wiggin v. Suffolk Insurance

Shaw C. J.

delivered the opinion of the Court. It appears, in the present case, that two policies were made on property on board the brig Soule, from Boston to Antwerp, in behalf of Barrett & Brown, bearing date the same day, one by the defendants and one by the American Insurance Company, each for the sum of $ 10,000. The property at risk amounted to the sum of $ 17,185-19. Both policies therefore together exceeded the amount at risk, by nearly the sum of $ 3000.

By the terms, of both policies, they being in the form now in use in the city of Boston, it was stipulated that the policy should not be held to cover any risk already covered by a prior policy ; and that the policy, so far as it covered risks net already covered by any prior policy, should not be considered as in any respect affected by any subsequent policy. Had it 'appeared, therefore, by the facts in the present case, that the policy at the American Insurance Office was made prior to the present, this would, by force of the above clauses, have been available as a substantive contract of assurance for the amount of $7185-19 only, being the balance of interest not covered *153hy the prior policy. Or had it appeared, that the policy at the American Insurance Office was taken after the present, this would have stood as an available insurance to its amount, $ 10,000. And being of the same date, it would have been open to proof which was in fact executed first, so as to give effect to these clauses in the policies. But no such proof has been offered, and no fact is stated in the report from which any priority can be inferred ; on the contrary, the two companies have agreed between themselves to consider and adjust them, as if made simultaneously, and we consider that the argument has proceeded on the same ground, without objection on the part of the plaintiff.

Treating these policies then as in fact made at the same time, the clause in regard to priority is wholly inoperative . and then as to the amount of the difference between the sum insured and the sum at risk, it is the case of a double assurance, that is, the assured has an obligation from two or more parties to perform the same thing, at the same time. When this is the case, the party holding such double assurance, may in the outset, and before making any election, consider each debtor as liable to bear a proportionate part of the common burden, and recover accordingly ; or he may require either of the parties liable, to pay the whole, and then it follows as a rule of law, founded upon the broadest principles of equity, that where one of .two parties has paid the whole of a debt, for which each was originally and ultimately liable, the party who has paid the whole or a disproportionate part of the common debt, shall have a remedy against the other for a contribution, so that the burden may be borne equally according to their respective liabilities. In the present case, it appears, that the plaintiff is the assignee of both policies, that suits were commenced on both policies, and entered in court, by the plaintiff at the same time.* It further appears, that both the defendant companies claimed certain deductions by way of payment or set-off, that the American Insurance Office, in the suit against them, considering that they were liable for half the actual loss, and not contesting the right of the plaintiff to claim what was *154actually due as between them and Barrett & Brown, the original party assured, but claiming certain deductions, made an estimate of the amount actually due, by charging themselves with one half of the actual loss, and making deductions to a certain amount, struck a balance, and paid into court the sum of $4345-28, computed upon that basis ; and the plaintiff took the money out, of court. The plaintiff being the assignee of both parties, it does not appear that it can make any difference to him, whether he elects to take one half of the amount which he is entitled to recover from each office, or $ 10,000 from the one, and $ 7000 from the other. Under the circumstances of the case, therefore, we consider the taking the money out of court, as prima facie evidence, that the plaintiff acceded to the proposal of the two companies to consider each as responsible for one half of the sum actually at risk, and made his election accordingly to adjust the loss in the present case upon that basis.

If it is otherwise, if there is any mistake on this point, which the plaintiff wishes to have more fully considered, judgment must be suspended until the parties can be further heard.

Considering then that the defendant company are liable on their policy for one half the amount at risk, say $ 8592-59, with interest to be computed, then the material questions controverted between the parties arise, what sums the defendant company have a right to deduct, in order to ascertain the balance due. In the first place it is proper to consider the contract between the parties to this suit. Had it been a mere assignment in equity, the suit must have been commenced in the name of Barrett & Brown, and all equitable deductions would have been made. But besides the general rule of law, that an assignment of a chose in action cannot be made at lawr, so as to enable the assignee to sue in his own name, there is a clause in the policy, which prohibits the assured from assigning the policy without the consent of the underwriters. The consent of the defendant company in the present case was essential, to enable the plaintiff to maintain his action, and that being given upon terms, by his acceptance of it the plaintiff assents to and becomes bound by the terms. The policy was made in February, 1834, assigned to the plaintiff in June, 1834, and *155.he defendants assented to it by a memorandum in writing, “ reserving to themselves all the rights expressed in the policy, regarding premium notes, debts, &c.” The plaintiff, by assenting to these terms, agreed that all debts due to the office ■mould be deducted from the amount due on this policy. The substantial effect of such an assignment under such a reservation is, that the defendants promise to pay the plaintiff the same amount, which but for the assignment would be payable to Barrett & Brown. The effect is nearly if not precisely the same as the assignment of a chose in action, without the express concurrence of the debtor, but with notice to him, which effect would be, that the assignee must sue in the name of the assignor, that all equitable payments, set-offs, and deductions, which the debtor might make as against the assignor, may be made, but that any release or discharge given by the assignor after notice of the assignment will not avail, and any debt contracted after such notice cannot be set off. By the particular terms of the reservation made by the defendants, in their assent to this assignment, we were at first rather inclined to the opinion, that small premium notes, taken in the ordinary course of business and in good faith, before any failure on the part of Barrett & Brown, might be deducted ; but this applies only to two small notes subsequent to the assignment, one for $ 158, dated September 1834, and one for $1, dated October 1834, and as to these the question becomes wholly immaterial, upon the considerations hereafter stated.

The assignment then was made by the assured, with the assent of the defendant company, and accepted by the plaintiff, reserving all rights expressed in the policy regarding premium notes, debts, &c. By the terms of the policy, the defendants, on the happening of a loss, and in liquidating it, were to have a right to deduct from it, all premium notes and other debts due to the office. But, supposing that this reservation should be construed strictly, and be limited to all debts, which should become due. in virtue of contracts and engagements then entered into, and dealings then had, it appears by the statement of facts, that in virtue of two policies made prior to this assignment, there was a loss due from the defendant company to Barrett & Brown. On the liquidation of that loss, the defend*156ants had a right, by the terms of the policies, to deduct all premium notes due to the office, as well those afterwards as those previously made. And neither the plaintiff nor any other person having had an assignment of those policies, there was nothing to interfere with the general right of the defendants, as against Barrett & Brown, to deduct their premium notes from that loss.

We consider then, that the effect of this assignment was to make the defendants liable to the' plaintiff for any loss which might occur, on the policy on property shipped by the brig Soule to Antwerp, first deducting any premium notes or debts due to the office, in virtue of contracts then subsisting. But in order to ascertain what those debts are, we think the defendants are bound to give credit for all sums due to Barrett & Brown, growing out of the same dealings, and that the balance only is the debt due, and that the plaintiff is entitled to have those credits given to Barrett & Brown in order to reduce the debt, which by the reservation they have a right to deduct from the policy assigned to him.

It appears that there is due to Barrett & Brown, from the defendant company, the sum of $4,995-05, for partial loss and general average on the Kent. From this sum is to be deducted notes Nos- 1 and 2. for premiums on the same policies ; also the four other premium notes, because though given after the policies on the Kent, yet by the terms of those policies the defendants, on liquidation, were to deduct all premium notes, past and future, and there was no assignment to any third person to interfere with this general right.

The balance thus ascertained, of the loss due from the defendants to Barrett & Brown, is then to be deducted from the amount due to the defendants by Barrett & Brown on the bottomry bond.

This leads to the most important question in the cause, which is, whether the defendant company have a right to set off the amount due to them on the bottomry bond, against the claim of, the plaintiff in this action, and the Court are all of opinion, that they have this right. This bottomry bond was dated, not only before the assignment, but before the policy now sued upon was made It comes, therefore, within the *157terms of the reservation. It was a debt due by Barrett & Brown, as principal debtors, to the defendants. The argument on the part of the plaintiff is, that the defendants had two other remedies for this sum, to which they should first have resorted, namely, the mortgage on the ship, and the surev'es on the bond, who are proved to be solvent. But we think that- these were mere collateral securities and remedies, to which the defendants might, but were not bound to resort. Where a creditor has a lien on two distinct funds, he may resort to either, although other persons may have subsequent claims, so that his election may benefit one in preference to another. A court of law will not oblige a creditor so to marshal his claims, as to charge one fund and release another, where both are liable. Lupton v. Cutter, 8 Pick. 298; Union Bank v. Laird, 2 Wheaton, 390. But this case stands somewhat stronger, than that of the right of a creditor to elect, among different securities, to which he will look. The plaintiff took this assignment subject to the debts due from Barrett & Brown to the office ; this was a debt due on a bond then existing, and which afterwards became payable ; and, therefore, by the terms of his assent to the assignment, the defendants had a right to deduct this debt, without first resorting either to *he mortgage on the vessel, or to the sureties on the bond

See Wiggin v. American Insurance Company, post, p. 158.