Pentz v. Receivers of Ætna Fire Insurance

The Vice-Chancellor : In making the order, directing the receivers either to adjust the loss claimed by the petitioners and give them a certificate or to proceed and appoint referees according to the statute, the court did not intend to pass [343] upon the rights of the parties ; but only to put those rights in a train for adjudication upon the coming in of a report of referees, when the question, whether the petitioners were to be admitted as creditors of the fund in the hands of the receivers and if so for what amount, could be properly presented. That question is now before the court. It is objected that they are not creditors of the company and can have no claim for a loss upon the policies, because the loss did not arise from the perils insured against: the buildings having been blown up by gunpowder and because it was a mode of taking the property for public good agreeably to law, upon a just compensation to be made for the same, which put an end to the contract of insurance and left the owners to seek their recompense elsewhere for the loss or deprivation of their property. By proceeding, as the petitioners have done, against the corporation of the city of New-York and procuring their damages to be assessed, they have established the fact that their buildings were blown up or destroyed by order of the magistrates, so as to give them a right to claim compensation from the corporation of the city. And, according to the decisions in similar cases which have preceded, this could only be done upon satisfying the jury that the building would not inevitably have been destroyed by the fire. Still, the Supreme Court have decided recently, in the case of The City Fire Insurance Company v. Corlies, (21 Wend. 367,) that the underwriters are liable to the assured upon the policy for the loss occasioned by the introduction of gunpowder into the building and the blowing of it up by order of the mayor, with the consent and concurrence of two aldermen, though, at the same time, the corporation were liable under the statute; and this opinion intimates that if the insurers pay, they may have an action over in the name of the assured to recover the money from the corporation. But the present case does not rest here ; and is not now to be determined on that ground. The petitioners having proceeded against the corporation and had their damages assessed, the question now is, whether they can have additional compensation for their loss against the underwriters 1 They disclaim seeking a double compensation ; and insist [344] that the amount of thirty-nine thousand four hundred and seventy-six dollars, found by the inquisition of the jury against the corporation, is insufficient to cover their actual loss by just about the amount of their insurance—and hence that they are . - , entitled to stand as creditors of the insurance company tor the whole amount of the policies in addition to what they receive from the public treasury. But the difficulty is, about admitting evidence to gainsay the finding of the jury. The petitioners claimed the full amount of their loss ; and it was the duty of the jury to give it to them. The jury had no right to take into consideration the fact or amount of insurance by way of diminishing their claim on the corporation. There is no direct or positive proof that the jury'did so. This court must presume that the jurors performed their duty and allowed the whole amount of the loss proved before them, especially as the petitioners have so far acquiesced in the verdict or inquisition, as to take no measures to set aside or to alter it. How, then, can this court say it was an insufficient finding ? It seems 10 me that such verdict must be regarded as conclusive on the petitioners as to the amount of loss sustained by them. If the verdict is not conclusive on this point and the petitioners are still at liberty to claim beyond or in addition to it upon the policies of insurance, then this consequence is to follow : that the corporation of the city of New-York, after once paying all the damages that a jury have found against them and which was intended to cover the whole loss, may be liable to pay an additional amount in an action against them in behalf of the insurers—for I think it can hardly admit of a doubt that whatever sum the underwriters may be compelled to pay upon their contract of insurance for a loss occasioned in such a way as to render the city liable, the corporation are liable to reimburse to the insurer. In the Ætna Insurance Company v. Tyler, 16 Wend. 397, 398, the Chancellor has well considered the law on this point of substitution or subrogation and expressed a decisive opinion in favor of the remedy over. It certainly cannot be that, after the corporation have once paid as for a total loss, judicially ascertained, that they can be liable over again in a collateral subsequent action; and if the insurers can [345] not have a perfect remedy over against the city corporation, then the latter ought not to be made to pay any additional sum. r * ■ ■ 1 he referees do not, indeed, report that the petitioners have sustained a loss beyond the sum of thirty-nine thousand four hundred and seventy-six dollars. They merely find that the petitioners sustained a loss to the full amount of the two policies, namely, twenty-two thousand dollars, which was payable on the twenty-fifth of May, one thousand eight hundred and thirty-six and that that sum, with interest included, amounting to twenty-six thousand nine hundred and forty-five dollars, is now due from the insurance company or the receivers thereof. But, from the view I entertain of this case, the petitioners cannot be admitted to come in and take a dividend as creditors of the company and, at the same time, receive the amount awarded to them against the city corporation. If they are permitted to receive a dividend now, they must consent to receive it on account of the thirty-nine thousand four hundred and seventy-six dollars, so that the company may receive it back again from the corporation. To prevent this circuit}' and as the case now stands, the motion for an order upon the receiver must, for, the present, be denied.