Fire Ass'n of Philadelphia v. Wells

• Decision Date: 26 March 1914
• Citation: 83 N.J.Eq. 140,90 A. 244
• Parties: FIRE ASS'N OF PHILADELPHIA v. WELLS.
• Court: New Jersey Court of Chancery

90 A. 244

83 N.J.Eq. 140

FIRE ASS'N OF PHILADELPHIA

v. WELLS.

Court of Chancery of New Jersey.

March 26, 1914.

Bill by the Fire Association of Philadelphia against Thomas Wells. Decree for complainant.

Defendant was the owner of certain buildings and their contents, which have been totally destroyed by fire caused by the negligence of a railroad company. 'The buildings were protected by fire insurance written by complainant company to the amount of $2,000. After the fire complainant company paid the $2,000 insurance to defendant, and received from defendant a receipt for the money, in which receipt defendant formally assigned to complainant his claim against the railroad company to that amount. Thereafter defendant, without the knowledge of complainant, made a settlement with the railroad company, whereby he received from that company $5,000 and executed a general release, discharging the railroad company from all liability by reason of the fire.

Complainant now seeks to recover from defendant its loss of $2,000.

By way of defense defendant claims that, when he accepted the insurance money and executed the subrogation receipt in behalf of complainant, he was informed by the agent who paid him the money that he would be privileged to settle with the railroad company for the balance of his loss, and also claims that in making his settlement with the railroad company he settled for only the balance of his loss, and at that time apprised the railroad company of the fact that he had received the $2,000 insurance money, and had executed a subrogation receipt to complainant insurance company for that amount.

Thompson & Smathers, of Atlantic City, for complainant. Wescott & Weaver, of Camden, for defendant.

LEAMING, V. C. (after stating the facts as above). It was complainant's right and privilege to pay to defendant the amount of the insurance, and by that payment to become subrogated to defendant's claim against the railroad company to the extent of the amount paid. No "subrogation receipt" or other receipt or agreement was necessary; subrogation arose from the act of payment, and not from the convention. Monmouth Co. Fire Ins. Co. v. Hutchinson, 21 N. J. Eq. (6 C. E. Gr.) 107; Weber v. Morris & Essex R. R. Co., 35 N. J. Law (6 Vr.) 409, 413, 10 Am. Rep. 253; Sheldon on Subrogation, § 6. But a writing was executed. That writing was signed by defendant, and formally acknowledged by him before a notary public. It sets forth the payment of the insurance money, and assigns to complainant defendant's claim against the railroad company to the amount of the payment. The receipt does no more than state the exact conditions which would have existed by operation of law without a receipt. Defendant claims that he was induced to accept the insurance money and sign the receipt by a statement of the insurance agent that the payment and receipt would not, in any way, interfere with defendant collecting the balance of his loss from the railroad company. The writing which was executed is silent touching any such privilege to be extended to defendant, and the agent denies that any such statement was made. But the views which I entertain render it wholly immaterial whether any such statement was made or not.

While defendant claims to have made settlement with the railroad company for only the balance of his claim, and claims to have fully apprised the railroad company of the circumstances that the insurance money had been theretofore paid to him, he in fact executed to the railroad company a written general release of...