Niagara F. Ins. v. Fidelity Co.

Opinion, Mr. Justice Williams : When the judgment was entered in this case, a copy of the policy of insurance sued on, and an affidavit of defence, were on file. The question in the court below, and now before us, is whether the affidavit disclosed a good defence to the action on the policy. The following provision made part of the contract between the parties: “ When this company shall claim that the fire was caused by an act or omission of any person, town, or corporation, which created a cause of action, the party to whom the loss is payable under this policy shall, on receiving payment, assign to this company such cause of action.” The affidavit of defence distinctly averred that subrogation had been demanded, and that payment of the loss had been offered upon receiving an assignment of the cause of action against the gas company ; also, that the plaintiff had refused to make and deliver such assignment, and had in disregard of the covenant in the policy settled with the gas company, whose negli [522] gence was alleged to have caused the injury, and released it from liability. The facts thus averred, if sufficiently proved, constitute a good defence, and for the purpose of determining the sufficiency of the affidavit they are to be taken as true. By the terms of the policy it is expressly provided that the assignment shall be made “ on receiving payment.” The act of payment on the one hand, and of assignment on the other, are thus made concurrent. The covenants are dependent, and performance by one of the parties cannot be compelled without performance or an offer to perform by the other: Williams v. Bentley, 27 Pa. 294; Henry v. Raiman, 25 Pa. 354; Keeler v. Schmertz, 46 Pa. 135; Adams v. Williams, 2 W. & S. 227. There is no question of tender involved, and the authorities cited upon that question are therefore inapplicable. The plaintiff sues upon a policy insuring against loss by fire. The defendant admits the loss, avers the covenant to assign “ on receiving payment,” and alleges an offer to perform, on its .part, on or concurrently with performance by the plaintiff, which was refused and its right to such assignment denied. This is. a complete answer to the action. The plaintiff cannot compel performance by the insurance company, while refusing performance of its own covenant with which that of the insurance company is connected and upon which it is dependent. The effect of the release given by the plaintiff to the gas company is not now before us; but its purpose to save the rights of the plaintiff against the insurance company would seem clear from the language employed. “ It is understood that the foregoing settlement and release do not affect the claim of said first party against insurance companies for loss occasioned by fire, and which claim said first party shall be entitled to receive in addition to and .independently of the sum paid by said second party.” The gas company has not, therefore, paid for the loss by fire, and the release expressly excepts this part of the plaintiff’s claim from its operation, in order to save the plaintiff’s cause of action against the insurance companies. If, however, the release did extinguish all claim for damages by fire resulting from the explosion, that alone would be a sufficient reason for refusing judgment in this case, under the rule laid down in Carstairs v. Mechanics and Traders Insurance Company of New York, 18 Fed. R. 473. Such a release as [523] should make performance of the covenant to assign either impossible or useless, would relieve the insurance company from its concurrent covenant to pay. The judgment is now reversed, the record remitted, and a procedendo awarded.