Commercial Union Assur. Co., Ltd. v. N.J. Rubber Co.
Decision Date | 03 March 1902 |
Parties | COMMERCIAL UNION ASSUR. CO., Limited v. NEW JERSEY RUBBER CO. |
Court | New Jersey Supreme Court |
(Syllabus by the Court)
Appeal from court of chancery.
Suit by the Commercial Union Assurance Company, Limited, against the New Jersey Rubber Company. Demurrer to the bill sustained (49 Atl. 155), and plaintiff appeals. Reversed.
R. V. Lindabury, for appellant.
John Rellstab, for respondent.
This appeal presents a question of res judicata, raised by a demurrer to a supplemental bill. The original bill, which was filed to enjoin an action at law and for equitable relief, was arrested pending the action at law, which resulted in an adjudication which, when exhibited to the court of chancery by a supplemental bill, was, upon demurrer, deemed to have disposed conclusively of the case made by the complainant, under the doctrine of res judicata. The propriety of this order is the subject of the complainant's appeal, upon which cognizance will be taken of those facts that are established by this course of pleading and by such prior adjudication.
The complainant and appellant is an insurance company. The defendant is a manufacturing corporation, having its plant in this state. In the latter part of July, 1897, these parties entered into an agreement which is thus described and interpreted in the opinion delivered in this court in the action at law above referred to (New Jersey Rubber Co. v. Commercial Assur. Co., 64 N. J. Law, 580, 46 Atl. 777):
The opinion also says:
It is therefore established that the policy of the complainant although it had passed into the possession of the defendant, was not a contract because of the default of the defendant. Of this default the complainant was ignorant until after the occurrence of a fire by which property described in the policy was destroyed. This was upon October 21, 1897. On November 20, 1897, the complainant tendered to the defendant the proportionate amount of such loss, for which it would have been liable had the defendant not defaulted; at the same time canceling its policy under its terms, and returning the unearned premium. On February 4, 1898, the defendant commenced an action at law against the complainant upon the policy, which was in its possession. On March 4, 1898, the complainant exhibited to the chancellor its bill, stating its case, and praying for an injunction to restrain the defendant from proceeding with its action at law, and also asking "that it may be declared by this court that the real agreement between the parties aforesaid was that the said contract of insurance between your orator and the defendant was exactly concurrent and proportionate with the policies of insurance issued to the defendant by the said mutual companies." There was a prayer for specific and for general relief. In its bill the complainant stated that it had offered to pay to the defendant, and was still willing and ready to pay, the proportionate amount of said loss under its agreement. It also stated that it had defenses that were available only in a court of equity, and that it was unable to interpose these defenses in the said action at law, because the written contract of insurance did not contain the agreement made between the complainant and the defendant, stating that agreement as it was afterward interpreted in the opinion of this court above cited. The bill also prayed for a reformation of its said written contract of insurance.
Upon the coming in of this bill, an order to show cause, with a restraining clause, was allowed in the first instance, but on March 29th was so modified as to permit the action at law to proceed; reciting that it appeared "that the complainant claims to have legal defenses to the action at law set...
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