Keuthen v. Stache

Hirschberg, P. J.: I think the plaintiff failed to make proof sufficient to establish his cause of action. The suit was brought to recover- on two policies of insurance issued by a certain Lloyd/s association, known as the Fidelity Insurance Association of New York, of which it is alleged the defendant is an underwriter. The complaint alleges that the manager of .said association is a-company organized under the name of the Fidelity Surety Company, to which had been given a written power of attorney, by which each of the underwriters authorized the company to carry on the business of fire insurance for them: The complaint further alleges that the said company was at the time of issuing the policies in suit, and for a long time before and after, the general manager and attorney in fact of each and all of said- underwriters, referring, however, to the original of the power [522] of attorney to be produced upon the trial for its precise terms. The complaint sets forth the issuing of the policies, the happening of the loss, the amou.nt of the loss and an allegation that the defendant’s liability is a one-thirty-second of such loss. The complaint further alleges that the policies of insurance in question contain a provision as follows: “ It is agreed between the assured and the underwriters herein that in the event of any suit to recover any claim hereunder, service shall be made upon the Fidelity Surety Company, with the same force as if made upon all such underwriters, and it is hereby agreed by the undersigned that any judg-. ment rendered in such 'suit shall be binding upon the underwriters hereunder as provided by the present terms of the power of attorney herein referred, to, which limits the liability of each underwriter.” The complaint further alleges that an action was brought agaiust the Fidelity Surety Company and a judgment recovered • for the amount of the loss. The answer is a general denial. On the trial the plaintiff placed in evidence the judgment roll and the policies of insurance. The power of attorney was hot produced,nor was any evidence given of its contents. It was admitted, however, that the defendant’s name does not appear on it, nor does it appear in the policies of insurance. In other words, it is apparently conceded by the plaintiff that the defendant did not sign any authorization to the Fidelity Surety Company empowering it, so far as he was concerned, to act as manager in. the conduct of •the insurance- business so as to be binding upon him. The only evidence in the case tending to connect him with the Fidelity Surety Company at all is that of a witness to the effect that he, the witness, told the defendant that he had been requested by the treasurer of the company to get underwriting subscriptions; that the defendant consented to take $3,000 and pay ten per cent of that amount in cash, and that he did pay the cash, and that .lie gave his promissory note for the balance, payable to the company. ¡No evidence was given tending to prove that the witness was authorized by tire company to solicit or procure subscriptions, or that the officers of the company were cognizant of his acts, or that the cash and promissory note were ever received by the company. ¡No. proof was made -that the Lloyd’s association was ever organized or incorporated, or that the defendant was ever in any way connected [523] with it. Nor was any proof, given tending to establish the extent of the defendant’s liability., assuming that he was one of the underwriters. The appellant insists that the action is not brought, strictly speaking, upon the policies of insurance, but that it is brought upon the agreement of the defendant to be bound by the judgment against the Fidelity Surety Company. The claim would probably be tenable if the defendant’s liability as an. underwriter had been established. (See Conant v. Jones, 50 App. Div. 336.) The theory of the liability in such a case is that the defendant has agreed to be bound by the result of an action against another party, and thereby puts himself in privity with that party, but it is essential that, the agreement should be proven. ■ I think, however, that the court erred in dismissing the complaint upon the merits.. The plaintiff may supply upon a new trial proof-sufficient to entitle him to recover a judgment against the defendant, and the dismissal, therefore, should have been for lack of proof. (Hoey v. Met. St. R. Co., 70 App. Div. 60; Levy v. Grove Mills Paper Co., 80 id. 384; Bowen v. Farley, 113 id. 767; Crecelius v. City of New York, 114 id. 801.) The judgment should be modified by substituting for the words “ upon the merits,” the words “ without prejudice to a new action,” and as modified affirmed, without costs. Woodward, Jenks, Rich and Miller, JJ., concurred. Judgment of the Municipal Court modified by substituting for the words “ upon the merits,” the words “ without prejudice to a new action,” and as modified affirmed, without costs,