State National Bank v. North Western Union Packet Co.

Day, J. Upon the first trial the defendant defeated the plaintiff’s claim, to the extent of $2,250, on the ground that the insurance company had paid the loss to that extent, and that defendant was Uaible to the insurance company, and not to plaintiff therefor. Now, when sued by the assignee of this insurance company for the said $2,250, it shows that the insurance was invalid; that the company ought not to have paid the loss; that the defendant did not become liable to the insurance company on account of such payment; that the plaintiff took nothing by the assignment, and thus again defeats the plaintiff’s claim. So that, although by its negligence, the defendant has occasioned the loss of a cargo of grain, it is discharged from any liability therefor to the extent of $2,250. A decision reaching such results at once arouses sus [230] picion of its correctness, and challenges close scrutiny of the foundations upon which it rests.- The only deduction that can fairly be drawn from the answer of defendant' in the first suit is, that plaintiff is not the real party in interest, because that party is the insurance company. The results of the first trial could have been reached in no way except by finding that the insurance company was the real party in interest and entitled to recover of defendant to the extent of the loss paid, to wit, $2,250. The plaintiff was not entitled to recover that amount, simply because defendant was liable to another party therefor. If the seaworthiness of the vessel was at all essential to the right of action of the insurance company, such seaworthiness was assumed in the allegation of defendant that plaintiff was not the party in interest because of the payment of the loss by the insurance company. If the vessel was unseaworthy in fact, it was known to defendant at the time of filing its first answer. Yet at that time it tendered an issue, which, according to its present position that the seaworthiness of the vessel is essential to the insurance company’s claim, involved and implied an admission of such seaworthiness. It received the benefit of this admission, and upon the assumption of the truth of the fact admitted, was discharged from liability to plaintiff to the extent of $2,250. Upon what principle of ethics or of law can it now be permitted, while retaining the benefits of the prior adjudication, to say that that adjudication was based upon a fact by it admitted, but which did not exist. The case, in brief, resolves itself to this: the fact that the vessel was unseaworthy at the time of the shipment, either would or would not have invalidated the claim of the insurance company against defendant on account of the loss. If it would have invalidated such claim, then the answer of defendant, setting up his non-liability to plaintiff, because of his liability to the insurance company, and [231] failing to allege the unseaworthiness of the vessel, must be taken to be a conclusive admission of seaworthiness, and to work an estoppel upon defendant to deny such fact. Having 'obtained, and still retaining, the advantages of a supposed fact, with full knowledge as to its existence or non-existence, the policy of the law will not permit him to gainsay such fact, in a subsequent suit with the same party. Upon the other hand, if the unseaworthiness of the vessel would not affect the right of the insurance company to recover, then the special finding of the jury was immaterial, and did not warrant the judgment of the court. In either view the judgment is wrong. Other questions are argued by counsel of appellee, but it is believed the above view disposes of all the questions actually passed upon by the court below. Reversed.