Grell v. Globe & Rutgers Fire Insurance

O’Brien, J.: On July 19, 1899, certain property of one Charles H.. Leggett, insured under a policy issued to him by the Globe & Rutgers Fire Insurance Company, was destroyed by fire. Proof of loss was presented and it was adjusted at the sum of $850. Thereafter Henry A. Lozier, the co-plaintiff herein, began an action against Leggett to recover the amount of two promissory notes, and in that action procured a warrant of attachment by virtue of which he attached the money due Leggett by the insurance company on the adjusted loss then unpaid. After Lozier had obtained judgment, he issued an execution and demanded from the insurance company sufficient of the attached fund to satisfy the execution. This demand was refused by the [613] company, and the present action was accordingly begun against it to compel it to pay over the amount. Thereupon the company sought to interplead Leggett and one John S. Butcher, - whom it was informed made some claim to the fund; which motion was denied, and thereafter the company answered by general denial. The complaint was then amended and before the time to answer had expired, Butcher filed with the company notice of claim to the fund based upon an alleged assignment from Leggett. The company, not recognizing this claim, was sued by Butcher, and again moved for an interpleader, this time asking to interplead Butcher with the plaintiffs, and from the order entered denying such motion this appeal is taken. As it appeared that the action brought by Butcher against the defendant company was not “ commenced within twelve months next after the fire,” the Special Term concluded that, as the company had a good defense to such action, the "motion to interplead Butcher should, on that ground, be denied. It was held, however, in Smith v. Glens Falls Insurance Co. (62 N. Y. 85), as stated in the syllabus, that: “ Where an insurance company, after a loss has adjusted the claim therefor, and has agreed to pay a certain sum in consideration of the surrender by the assured of his policy, in an action to recover the amount so agreed to be paid, the company cannot avail itself as a defence, of a clause in the policy limiting the time within which an action can be brought thereon; the action is not upon the policy but the independent agreement.” (See, also, Steen v. Niagara Fire Ins. Co., 89 N. Y. 315; Holmes v. D' Camp, 1 Johns. 34; Barnum v. Merchants’ Fire Ins. Co., 97 N. Y. 188.) In view of these decisions, it is not entirely clear that the learned judge at Special Term was right in concluding that the company had a perfect defense to Butcher’s action. Whether this be so or not, the company was not bound to avail itself of such defense, but had the right to waive it. Where, as here, it admits its liability for the amount of the loss as adjustvd, and is only desirous of having determined the party rightfully entitled thereto ; and where two different persons are contending for the same fund, in two separate actions against the company, there is no reason why it should be put to the expense and trouble of two hw suits, when the title, to the fund can [614] be litigated between the contending- parties without the presence of the company. We think that, under the practice and the decisions of this court, the motion should have been granted. (Bacon v. American Surety Co., 53 App. Div. 150; Crane v. McDonald, 118 N. Y. 648; Johnston v. Stimmel, 89 id. 117 ; Woolworth v. Phoenix Mut. Life Ins. Co., 25 App. Div. 629.) Order accordingly reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs. Van Brunt, P. J., Ingraham, McLaughlin and Hatch, JJ., concurred. Order reversed, with ten dollars costs and disbursements, and motion granted, with ten -dollars costs.