Home Ins. Co. of New York v. Gilman

• Decision Date: 30 September 1887
• Citation: 112 Ind. 7,13 N.E. 118
• Parties: Home Ins. Co. of New York v. Gilman, Ex'r.
• Court: Indiana Supreme Court

112 Ind. 7

13 N.E. 118

Home Ins. Co. of New York

v.Gilman, Ex'r.

Supreme Court of Indiana.

September 30, 1887.

Appeal from circuit court, Newton county.

Harrison, Miller & Elam, for appellant. S. P. Thompson and J. W. Oswalt, for appellee.

Mitchell, J.

A policy of fire insurance was issued to George Sapp, the alleged owner of a store building, stipulating for insurance against loss or damage by fire, to the amount of $1,500. The policy contained the following stipulation: “Loss, if any under this policy, payable to W. W. Gilman, executor of the Reynolds estate, as his interest may appear.” The complaint alleged that at the time the policy was issued, to-wit, on the fourteenth day of February, 1885, as also when the property insured was destroyed by fire, February 16, 1885, Sapp was the owner thereof, in fee-simple; and that Gilman held a mortgage thereon, to secure a debt due him from Sapp amounting to $900. It also alleged that the amount of the loss exceeded the amount of the debt due Gilman. The appellant contends that Sapp and Gilman cannot maintain a joint action on this policy, and hence that the court erred in overruling the demurrer to the complaint. The learned court below was of opinion that an action might be so maintained, and, after hearing the proofs, rendered judgment “that the plaintiffs do have and recover of and from the defendant the sum of $1,537.51, and that of said sum William W. Gilman, as executor of the estate of Henry Reynolds, deceased, shall first recover the sum of $949.51, and the plaintiff George R. Sapp shall recover the residue.”

The question is thus presented whether, after the loss, Gilman and Sapp had such a joint interest in the policy as entitled them to join as plaintiffs in an action thereon. Section 262, Rev. St. 1881, provides that “all persons having an interest in the subject of the action, and in obtaining the relief demanded, shall be joined as plaintiffs, except as otherwise provided;” and by section 269 of the Code it is enacted “that, of the parties in the action, those who are united in interest must be joined as plaintiffs or defendants,” etc. Section 568 provides that judgment may be given for or against one or more of several plaintiffs, or for or against one or more of several defendants, and that the judgment may, when the justice of the case requires it, determine the ultimate rights of the parties on each side, as between themselves. These statutes must be deemed to have modified the extremely technical and arbitrary rules of the common law in respect to parties and the rendition of judgments. Their effect is substantially to adopt the equitable rules of the chancery courts in regard to these subjects, and they require the application of those rules to each case as it arises, whether it be of a legal or equitable character. Tate v. Railroad Co., 10 Ind. 174; Goodnight v. Gaar, 30 Ind. 418; Pom. Mun. Law, §§ 200, 215; Works, Pr. 98, 99.

At the common law it was essential that all those who appeared on the record as plaintiffs should have an interest in the whole of the recovery, so that a judgment in solido could be rendered in favor of all the plaintiffs, as also against all the defendants. This rule, never founded upon any substantial reason, has been modified by the provisions of the Code already referred to. Moyer v. Brand, 102 Ind. 301, and cases cited. While it has often been decided, under the Code, that all persons who join as plaintiffs must have an interest in the subject of the action, and that it is necessary that they be united in interest, ( Dill v. Voss, 94 Ind. 590; Faulkner v. Brigel, 101 Ind. 329, and cases cited,) it does not follow that the interest of all must be equal, or that their interests may not be legally severable. It is of course not meant that two or more persons, having separate causes of action, although they arise out of the same transaction, and be against the same defendant, may nevertheless unite in the same action. Where, however, there is, as was said in Tate v. Railroad Co., supra, “one common interest among all the plaintiffs, centering in the point in issue in the cause, the objection of improper parties cannot be maintained,” even though the amount of their several interests be unequal, and even though they may be entitled to several judgments in respect to the amounts to be recovered. All must have some common interest in respect to the subject-matter of the suit, and each must be interested that all have relief in respect to that subject-matter. This creates such a unity of interest as entitles parties so related to a particular subject-matter to unite as plaintiffs in an action. Martin v. Davis, 82 Ind. 38. In the case before us, both parties plaintiff had, by contract, a common interest that a recovery should be had upon the policy of insurance. It was the interest of each that the other should recover, as well as that he should recover himself. A recovery by the mortgagee inured to the benefit of his co-plaintiff in that it established a common right. The amount recovered by the mortgagee went in liquidation of the mortgagor's debt; while a recovery by the latter had a like effect upon the common right, and entitled the former to receive payment out of the sum recovered, as his interest in the fund might appear. Each was therefore interested in the relief sought by the other; and as both appeared upon the face of the policy to have a common interest, neither being entitled to the whole fund, it was proper, for the protection of the defendant, that both should be parties. “It was not so material whether they were plaintiffs or defendants, so that their rights under the contract would be barred by the event of the suit.” Morningstar v. Cunningham, 110 Ind. 328, 11 N. E. Rep. 593; Durham v. Hall, 67 Ind. 123; May, Ins. § 449. There was no error in overruling the demurrer to the complaint.

The seventh paragraph of answer set up, in substance, that the policy sued on had not been delivered nor paid for except in the manner following: It averred that, two days before the fire occurred, the appellee Sapp applied to the company's agent at Goodland for insurance. It was there agreed between the agent and the applicant that, in consideration that the latter would give the agent credit on an indebtedness due from him to the applicant for the premium agreed upon, the agent would make out and deliver a policy of insurance covering the property, in a stipulated amount. The agent was given credit accordingly, but the policy was not delivered until after the property was destroyed by fire. The agent made due report of the policy, and transmitted the amount of the premium to the company in due course. The company, having no previous knowledge of the manner of payment to its agent, received and retained the premium until after this suit was brought, when, learning the fact, it tendered the amount to the insured. To this answer the plaintiffs replied that they made the contract of insurance in good faith with the defendant's agent, and that they were at the time ready and willing to pay the premium; but that payment in money was waived by the company's agent, who accepted in payment credit upon an indebtedness due the insured, and that the agent forwarded the amount of the premium to the home office, in the regular course, etc. It is contended that the...