Dixie Fire Ins. Co. v. American Confectionery Co.

• Decision Date: 30 March 1911
• Parties: DIXIE FIRE INS. CO. et al. v. AMERICAN CONFECTIONERY CO. et al.
• Court: Tennessee Supreme Court

136 S.W. 915

124 Tenn. 247

DIXIE FIRE INS. CO. et al. v. AMERICAN CONFECTIONERY CO. et al.

Supreme Court of Tennessee.

March 30, 1911

Appeal from Chancery Court, Davidson County; John Allison Chancellor.

Suit by the Dixie Fire Insurance Company and others against the American Confectionery Company and others, in which two of the defendants filed a cross-bill. There was a judgment of the Court of Civil Appeals, reversing the decree of the chancellor dismissing both bills for want of jurisdiction and defendant named files a petition for certiorari and supersedeas. Judgment of the Court of Civil Appeals affirmed.

Stokes & Stokes and R. L. Bartels, for complainant.

H. S Stokes and Jno. T. Lellyett, for defendants.

NEIL J.

The original bill in this case was filed by the Dixie Fire Insurance Company, the North British & Mercantile Insurance Company, and the Stuyvesant Insurance Company against the American Confectionery Company, the Globe Underwriters' Agency, and the International Fire Insurance Company.

There was also a cross-bill filed by the two latter companies against the complainants and the American Confectionery Company.

There was a demurrer filed to the original bill, and upon the hearing in the court below the chancellor dismissed both bills for want of jurisdiction, and thereupon the complainants and the cross-complainants appealed to the Court of Civil Appeals. In that court the decree of the chancellor was reversed, and the cause remanded to the chancery court of Davidson county for further proceedings. A petition for certiorari and supersedeas was then filed in this court by the American Confectionery Company, the prayer of which petition was granted, and the cause was set down for argument, and was argued at the bar of this court.

The original bill alleged: That on the 15th of September, 1909 the Dixie Fire Insurance Company issued to the American Confectionery Company a policy of insurance for $5,000, under which it insured the defendant for the period of one year against loss by fire upon the machinery located in the manufacturing plant of the insured. That on August 11, 1909, the North British & Mercantile Insurance Company issued two policies of insurance to the same insured, one policy being for $7,720, of which amount $1,250 was upon the machinery in said plant and $6,470 was upon the stock, and the other policy being for $5,000, of which amount $1,000 was upon machinery and $4,000 was upon stock. That on August 20, 1909, the same insurance company last named issued another policy for $6,000, of which amount $1,250 was upon machinery and $4,750 was upon stock. That the Stuyvesant Insurance Company, on January 28, 1910, issued to the same insured a policy of $10,000 upon the machinery, and on June 4, 1910, issued another policy for the sum of $6,000 upon the stock. That on February 21, 1910, the Globe Underwriters' Agency issued a policy for $28,720, of which $18,720 was upon the building, $9,500 upon the machinery, and $500 upon office fixtures. That the International Fire Insurance Company, on March 7, 1910, issued a policy for $8,780 upon the stock of the said American Confectionery Company.

That, excepting in the name of the insurer, the property insured, the amount insured, and the date of the policy, all of the contracts of insurance issued by the complainant and defendant companies were in every respect identical.

That on the morning of July 4, 1910, a fire occurred in the manufacturing establishment of the American Confectionery Company, by which some of the property covered by the said insurance was destroyed, and some was damaged. That various representatives of the insurance companies appeared in Nashville soon after the fire, with a view to investigating it and ascertaining the amount of the loss. That prior to entering upon this work these representatives requested of the defendant American Confectionery Company the execution of an agreement under which they would be permitted to make such investigation without waiving any of the legal rights or defenses that each company might have on the policy or policies issued by it, respectively. That in accordance with the request such an agreement in writing was entered into separately by each of the companies, all of said agreements being identical in form, differing only in the signature of the company thereto.

That an appraisal was demanded by the defendant Globe Underwriters' Agency, for the purpose of ascertaining the injury done to the building, and the appraisers estimated the damage thereto at $3,617.43. That complainants are in no way interested in the amount of that award, except that, as subsequently shown in the bill, the amount should be increased, for the reason that the appraisers charged up certain sums for loss on the machinery that should have been charged up for loss on the building.

That an appraisal was demanded regarding the loss on the engine, boiler, and machinery, and that in accordance therewith the appraisers fixed the damage thereof at $20,064. That apportioning said sums ratably among the various companies having policies of insurance on these items of property would make the amount due from the different companies, if said appraisal was correct, as follows:

Policy No. 171856, Dixie Fire Insurance Company $3,571 54

" " 52596, Globe Underwriters' Agency 6,785 93

" " 598976, North British & Mercantile Insurance Company 892 89

" " 598985, North British & Mercantile Insurance Company 714 30

" " 598986, North British & Mercantile Insurance Company 892 89

" " 71102, North British & Mercantile Insurance Company 7,143 09

It is further alleged: That this appraisal was incorrectly made. That various items of damage to the property were charged up to machinery, when these items should have been charged up to the building; that among the items so erroneously charged up to machinery was one amounting to about $400 for protecting and bracing the water tank on top of the building which furnished water for the sprinkling plant, which property was included in the insurance taken on the building, and not on the machinery.

That the adjustment of the damage done to the stock could not be ascertained or appraised, and that the defendant American Confectionery Company prepared and filed with each of the companies papers purporting to be proofs of loss on account of the burning and damage to the stock. That it is claimed by the defendant American Confectionery Company in these proofs of loss that different sums are owing to it by the companies that issued policies upon the stock, and that the total amount of damage claimed on account of the destruction or injury to the stock is $27,258.09.

That by the terms of each of the insurance policies issued by the several companies it is expressly provided that no company shall be liable under its policy for a greater proportion of any loss on the described property, or for loss by the expense of removal from the premises endangered by fire, than the amount insured by such policy shall bear to the whole insurance, whether valid or not, or by solvent or insolvent insurers, covering such property.

That the amount fixed as the loss on the machinery by the appraisers, as well as the amount named in the proofs of loss as the damage sustained upon the stock are both erroneous and that, if the companies are liable at all, they can be liable only for their proportionate amount of such loss, to wit, as the amount of each insurance bears to the total insurance. That to do justice between the companies, and to carry out the terms of their contracts, it is necessary that the amount of loss, if any, should be ascertained; also the amount of insurance, and the percentage that the amount of each policy bears to the total amount of insurance, and the percentage that the amount of loss to be ascertained and fixed. That if the insurers are liable at all, the loss should be apportioned between them in accordance with the terms and stipulations of their contracts. That by virtue of these contracts of insurance each insurer is interested in the liability of the other. That the only possible way in which all these matters could be justly and equitably determined would be in one suit. That the American Confectionery Company is threatening to institute, and will institute, separate suits against each of the complainants and the defendant insurers, claiming the amount alleged to be owing by them under the proofs of loss, and this would necessitate the institution of nine separate and distinct lawsuits. That it would be an impossibility to arrive at justice between the insurers through such a multiplicity of suits. That in one suit one set of values might be fixed, and in another another set of values, and in this way one insurance company might be called upon to pay its proportion in one case upon a certain ratio different from that fixed in another case, so that, instead of the insurers, if liable at all, paying in accordance with their covenants, they would pay in accordance with the divergent findings of separate juries and separate trials, and possibly in separate tribunals. That, if liability at all exists, this presents a case for making a common apportionment and determining the contribution that each of the insurers should bear to the common loss. That this can be apportioned only in a court of equity, where matters of account, apportionment, and contribution are cognizable, and that it could not be done in the nine separate suits threatened as aforesaid. That all the insurance companies have the same defense against the claims of the assured, arising from a common interest in the litigation, and that by one comprehensive suit in equity all the rights and interests of the insurers...