Embler v. Hartford Steam Boiler Inspection & Insurance

Gray, J. The policy of insurance, which was the subject of this action, was issued to the Ticonderoga Pulp & Paper *434 Company in October, 1891, and it indemnified and insured, among other things, against loss or damage to property of every kind resulting from an explosion or rupture of steam boilers; “ also against loss of human life or injury to person, .whether to the assured, to employees, or to any other person or persons, caused by such explosion or rupture1, payable to the assured for the benefit of the injured person or persons, or their legal representatives in case of death, and not contingent upon the legal liability of the assured.” The sum of insurance stated in the policy was $50,000, and the amount of any recovery under the clause quoted was limited to the sum of $5,000. In December, 1892, Provenclia, who was employed by the pulp company in the capacity of fireman, was injured as the result of an explosion of one of the boilers and, subsequently, died from his injuries. His widow, as his administratrix, brought an action against the pulp company, to recover' damages by reason of its alleged negligence in causing the death of her intestate, and, prior to the trial of the issues therein raised, the case was settled by the payment of the sum of $1,500. Subsequently, Provencha’s administratrix assigned to the plaintiff in this action all her rights and interests in and to the policy of insurance in question; whereupon . this action was brought, in which the plaintiff seeks to enforce the contract of insurance to the extent of the $5,000, provided for in the clause above mentioned. It is contended on the part of the plaintiff in the action that this policy provides for two kinds of insurance ; one of indemnity to the pulp company, against loss or damage to property, and one ¿gainst loss of human life, or injury to persons, and that the promise of the insurer in the latter respect, under the special clause which I have mentioned, was made absolutely for the benefit of Provenclia, or his legal representatives in case of death, and not merely to indemnify the pulp company for any loss which it might sustain from, or by reason of, such death. It is argued that the manifest intent of the contract was to compensate, to a limited extent, those sustaining a loss from death, regardless of any relations existing between *435 the assured and the person killed and regardless of any interest which the assured might have in the person killed. The policy of insurance was issued prior to the passage of the act, of 1892 (Chap. 690, sec. 55), which expressly authorizes an employer to take out accident insurance covering his employees collectively, for the benefit of such as may be injured, and, therefore, is not affected by that law. The action must stand or fall upon the determination of the question whether the contract of insurance gave any rights to Proven cha, or to his legal representatives, to enforce it against the insurer for his, or their, benefit. Certainly, Proveneha was not a party to the contract of insurance and it does not appear from the record, even, that he was an employee of the pulp company at the time the contract was made. The stipulated fact is, and it is all the evidence that we have on the subject, that Proveneha, on and prior to the day when the accident occurred, was in the employment of the company. In the face of such a stipulation it is to be inferred, if not presumed, that Proveneha was not an employee when the policy was issued. But, perhaps, that fact alone may not have a decisive bearing upon the question, if the theory of the plaintiff be tenable, that the promise of the insurer was made for the benefit of those who, being employees, might sustain injury. The difficulty in the way of maintaining the action upon any such theory is radical, in that Proveneha was neither privy to the contract, nor to its consideration. It is not necessary to define precisely what was intended between the parties by the insertion of the clause in question. It may be that it was intended purely as an indemnity to the assured against pecuniary loss resulting to it from an injury occurring to an employee; whether that pecuniary loss were established as a legal liability of the assured, or whether it were a voluntary payment made to compensate the injured person on the part of the company. Assuming that it intended an insurance of the employees through their employer, the case is not helped very much; because no right of action was given to the employee, nor could any cause of action exist at common law. It is, of *436 course, competent for the legislature to alter the rules of the common law and to create a cause of action where none existed previously and that is what was attempted to be done by the legislature in the legislation of 1892, to which I have referred. But under the rules of the common law, giving a right of action upon the engagement or promise of a party, the cause of action is vested in the person with whom, or to whom, the engagement, or the promise, is made. An exception is allowed in the case of a third party, for whose benefit a contract is. made; when he may be allowed to bring an action in his own name. In such a case, however, it must appear that, when the contract was made, some obligation, or duty, was owing from the promisee in the contract to the party to be benefited. It is not suificient that the performance of the contract may benefit a third person. It must have been entered into for his benefit and the promisee must have a legal interest that it be performed in favor of the third person. (Vrooman v. Turner, 69 N. Y. 280; Durnherr v. Rau, 135 N. Y. 219.) It was said by Judge Rapallo in Garnsey v. Rogers, (47 N. Y. 233), when speaking of the doctrine of Lawrence v. Fox, (20 N. Y. 268), that he did not understand that that case went so far as to hold that every promise made by one person to another, from the performance of which a .third person would derive a benefit, gives a right of action to such third party; he being privy neither to the contract nor to the consideration. Eow what was there in the relation which Provencha sustained to the pulp company, which gave him a legal claim to the benefit of the promise of the insurer in this policy? If he had no legal claim, he could have no equitable claim; because a court of equity will not enforce a demand which is in contravention of rules of law. We do not know that he was an employee of the pulp company, at the time, this contract of insurance was made. The only parties to the contract are the pulp company and the insurance company. I't cannot be supposed that there was an intention on the part of the pulp company to secure some benefit to Provencha; for he was not in its *437 employment and he could in no respect be deemed in privity with the pulp company with respect to the contract. There Avas no relation of debtor and creditor ; nor any obligation or duty owing from the pulp company to Provencha, affecting or concerning this contract. The only obligation or duty, as between them, copsisted in such as grew out of the relation of employer and employee; for any breach of which the Hav gave a right of action and which was, in fact, availed of by Provencha’s administratrix. Nor can it be said that the pulp company had any legal interest that the promise of the insurer should be performed in favor of Provencha; for, assuming that a legal interest could have arisen upon the happening of the injury, it certainly ceased upon the satisfaction by the pulp company of the claim made in the action brought by his administratrix. I think it is impossible for ns to hold, under the circumstances, that there was such a relation between Provencha and the pulp company, or any such privity on his part to this contract of insurance, as conferred upon him, or his legal representatives, a right of action upon the policy of insurance and, for that reason, the judgment appealed from should be affirmed, with costs. Parker, Oh. J., Haight, Martin and Vann, JJ., concur for affirmance upon the ground that the insurance policy in question was at most intended as a jiecuniary indemnity to the legal representatives of the deceased employee for the loss sustained by them in consequence of his death, and that but one recovery is permitted, whether the death was caused through negligence or unavoidable accident. A claim having been presented by the legal representatives against the assured, based upon negligence, and that claim havdng been recognized and paid, no further right of action could exist under the policy. Gray, J., reads for affirmance; all concur (Parker, Ch. J., Haight, Martin and Vann, JJ., in result on memorandum filed). Judgment and order affirmed, with costs.