Nevins v. Rockingham Mutual Fire Insurance

Perlby, J. The objection that the suit was brought and is prosecuted by or for Lane, without authority from the plaintiff, cannot prevail. In the absence of proof to the contrary, we must presume that the suit is prosecuted by the plaintiff on the record, or by his authority. — 28 — If the claim of the plaintiff had been assigned after the loss, the assignee would have power to institute and prosecute the suit, without any other authority from the nominal plaintiff than that which is implied in the assignment, and that implied authority being coupled with an interest, could not be revoked. Sanborn v. Little, 3 N. H. Rep. 539. The policy states that, in case of a loss, it is payable to Holland & Lane. But the contract of the defendants was with this plaintiff; the policy issued to him; he gave the premium note and was the member of the corporation, and not Holland & Lane; the goods belonged to him; Holland & Lane do not appear to have had any insurable interest in them, though they were creditors of the plaintiff, and sold him some part of the goods. The action was properly brought in the name of the plaintiff, and so far as Holland & Lane have any interest, he will recover for their benefit. We understand this point to have been settled in Kittredge v. these defendants, decided in Rockingham county, but not yet reported. The defendants take the ground that the action cannot be maintained, because it was commenced before the directors determined the amount of loss. The loss happened on the 27th of October, 1846; and the action was commenced on the 18th of May, 1847; due notice was given within thirty days. Nothing was done to liquidate the loss, or determine the question of loss, till the 23d of August, 1847, near nine months after the defendants received notice of the loss. Nothing is stated in the case to excuse or explain this delay. The act of incorporation requires the directors to settle and pay all losses within three months after they receive notice. The suit was brought more than five months after the latest time • at which the notice can have been given. The time limited by the charter, for the directors to determine and pay the loss, had passed. If the plaintiff cannot, in this-case, maintain his action without a previous deter — 29 — mination of the loss by the directors, it is not easy to see how an action to recover a loss can in any case be maintained, if the company and the directors neglect the duty imposed on them by the charter. The insured could never maintain an action on his policy, unless the directors could be compelled by some auxiliary process to do their duty in this behalf. And this is the ground taken by the defendants. They say that the plaintiff should have applied to the equitable jurisdiction of this court, and thus compelled the directors to act. If this is the true construction of the charter, it leaves the insured to an unusual? dilatory and very inconvenient remedy, in ease the directors should neglect their dutjq as they have here; for, suppose this court should assume the power to compel the directors to act on the loss, unless they should choose to admit and pay it, the insured would still be left to all the additional delays and difficulties of a contested suit on the policy. The seventh section of the charter, on which the defendants rely, makes it the duty of the directors to ascertain and determine the amount of the loss; the eleventh section requires them to settle and pay all losses within three months after notice. They are, therefore, bound to decide on the question of loss, at the latest, within three months after notice. The seventh section proceeds to enact that “ if the party suffering is not satisfied with the determination of the directors, the question may be submitted to referees, or the said party may bring an action against said company, for said loss or damage, at the next court to be holden in and for the county of Rockingham, and not afterwards,” &c. By “ the determination of the directors ” here mentioned, we must understand a determination such as is required by the charter; that is to say, a determination made within the reasonable time limited, and, at the latest, within three months after notice. In case of such a determination, the assured must take the sum allowed, or if he is dissatisfied, — 30 — he must promptly appeal from that determination by a suit brought to the next court held in the county where the corporation is established. Two views may be taken of this provision in the charter. According to one of them, it would apply only to a case where the directors admitted a loss, and determined to allow a certain amount, and not to a case where they considered the question of their liability to pay a loss, and determined to pay nothing. It is to be observed that the act makes no provision for the trial and disposition of an action, where the directors have decided to pay nothing; when the action is brought under this provision of the charter, the insured is at all events to have the sum awarded; if the jury give more, he is to have the excess with interest and costs; if they give no more, he is to pay costs; but he still has the sum voted by the directors. These provisions all appear to contemplate a case where a loss has been admitted, and the amount fixed by the directors, and the only question is whether the insured is entitled to recover more.' In Massachusetts, it has been held, in giving construction to an act substantially and almost literally the same with that by which the defendants were incorporated, that the provision in question applies only to a case where the directors have admitted a loss, and determined on a certain amount, with which the insured is dissatisfied. Boynton v. Middlesex Mut. F. Ins. Co. 4 Met. 212. The other construction would extend the provision to a case where the directors have duly and seasonably considered the question of loss, and determined to pay nothing. Williams v. Vermont. Mut. F. Ins. Co. 20 Vermont, 222. We are not called on to decide which of these cases is the more correct; for neither of them gives any countenance to the position that, if the directors neglect to act on the question of loss within the time required by thé charter, no action can be maintained by the insured to recover his. loss. — 31 — The ground taken by the defendants is that a special remedy is provided by the charter for the recovery of all losses, that this provision applies to all cases, and excludes all other remedy. But we think the special remedy was intended only for the special case, where there had been a seasonable determination -by the directors on the question of loss, and the insured was dissatisfied with their determination. The corporation are by their charter made liable generally to be sued in any court of record; if the special remedy must be pursued, they can be sued for a loss only in the county of Rockingham. They made a contract within the scope of their corporate powers; by the contract, they in substance undertook' to settle and pay any loss that the plaintiff might suffer, according to the terms of the policy and the provisions of the charter. The charter required them to settle and pay the loss within three months after notice. They did not pay the plaintiff’s loss, nor did they take the preliminary steps to ascertain the amount of his loss, or whether he had suffered any loss which they were bound to pay, until after the time limited for payment, and after this suit was commenced; their subsequent action on this point cannot affect the plaintiff’s right to recover. They say that their general undertaking to pay, is qualified by reference to the provisions of the charter, which gives an action in a particular court, and within a limited time after they have acted on the question of loss. But they have not themselves complied with the charter; they are within the immunity and privilege of the charter, which requires them to be sued in a particular court, and within a certain time, only when they have determined-the question of loss according to the act, and their implied undertaking with the plaintiff. This is the doctrine of Boynton v. Middlesex Mut. F. Ins. Co., and a different construction would operate with great injustice, and put it in the power of the corporation to deny the insured all convenient and practicable remedy. — 32 — The pending trustee process was no defence to the suit. The defendants might have applied for a stay of proceedings, if the trustee suit were not determined before the trial came on. Wadleigh v. Pillsbury, 14 N. H. Rep. 373. Hut the sum paid by the defendants, to satisfy the judgment against them in the trustee process, should be deducted from the amount due to the plaintiff at the time of the judgment. This would be an answer pro tanto to the plaintiff’s claim, and would not require a special plea, as our statute provides that such a defence may be made under the general issue. Any part of the loss, which in equity may belong to Holland & Lane, must be recovered in this suit. No action could be maintained, in their own n'ames, by Holland & Lane, and the defendants could not be subjected to several actions on one entire contract for the same breach. In order to amend the verdict, as is provided in the case, it will be necessary to settle the principles upon which interest is to be computed. An insurance against fire, by the policies in general use, is a contract of indemnity. The damages, until they are ascertained, by agreement or otherwise, are unliquidated. Brinley v. Ins. Co. 11 Met. 195; Bell v. Pike & Trustees, decided in Grafton county, and not yet reported. But though no fixed sum is due, on which interest can be allowed as a legal incident, a full indemnification would require that interest should be cast on the amount of actual damage from the time of the loss; and unless the contract of insurance, expressly or by implication, prescribes another rule, interest should be computed on the actual loss, from the time when it happened. By the provisions of their charter, these defendants are not bound to pay until three months after they receive notice. From this provision, we think it must be implied that, if they settle and are ready to pay a loss within the three months, no interest can be allowed. But where the company allow a certain amount, and the — 33 — insured, in an action prosecuted, in the method provided for that case, recovers more, the charter, following what we understand to be the general rule, gives interest on that excess from the date of the loss. The defendants voted the plaintiff two thousand dollars, and on this case he is entitled to recover the whole amount insured, being two thousand five hundred dollars. On this excess of five hundred dollars, interest must be cast from the date of the loss. The pendency of the trustee process could not suspend interest on this sum of five hundred dollars, because it was not liquidated, and, therefore, could not be attached by that process, as was decided in the case of Bell v. Pike & Trustees, before mentioned. Some reasons might be assigned for holding the defendants liable on the whole of the loss, from the time when it happened until the vote was passed allowing the plaintiff two thousand dollars. But as the defendants were in no default until the expiration of three months after notice was given of the loss, we have, on the whole, come to the conelusion that interest should be allowed on the sum of two thousand dollars, from the expiration of the three months till the vote was passed. During that time, the trustee process was pending; but the defendants neglected to act on the question of loss, and until a liquidated sum was in their hands, due to the plaintiff, they had no fund on which the trustee process would attach; and, therefore, the process would be unreasonably delayed by their neglect, and they ought not, during that time, to protect themselves from the payment of interest. As a general rule, the garnishee will not be liable for interest while the attachment remains in force, unless he has been guilty of neglect or fraud. Sargent on Foreign Attachment, 108. But if there has been any unreasonable delay occasioned by the conduct of the garnishee, such case will form an exception to the rule that he is not chargeable with interest. Sargent on Foreign Attachment, 166. In this case, the delay of the defendants, — 34 — to liquidate the plaintiff’s loss, must be regarded as unreasonable after the expiration of the three months; and in the absence of any explanation, we must infer that the process was delayed by this neglect, as no fund was in their hands, liable to the process, until the loss was settled. But after the defendants voted to allow the plaintiff two thousand dollars, that sum was a fund attached by the process, and nothing appears to show that the defendants were guilty of any improper conduct, to make them liable for interest on that liquidated sum, while it remained attached on that process. The defendants will, however, be chargeable with interest on the balance of the two thousand dollars, after deducting the amount with which they were charged in that process, and their costs, from the time of the final judgment in that process. There must be judgment on the verdict, amended in conformity with these views.