Hustisford Farmers' Mut. Ins. Co. v. Chi., M. & St. P. Ry. Co.

• Decision Date: 06 April 1886
• Court: Wisconsin Supreme Court
• Parties: HUSTISFORD FARMERS' MUT. INS. CO. v. CHICAGO, M. & ST. P. RY. CO.

66 Wis. 58

28 N.W. 64

HUSTISFORD FARMERS' MUT. INS. CO.

v.CHICAGO, M. & ST. P. RY. CO.

Supreme Court of Wisconsin.

April 6, 1886.

Appeal from circuit court, Jefferson county.Hall & Skinner, for respondent, Hustisford Farmers' Mut. Ins. Co.

John W. Cary and Burton Hanson, for appellant, Chicago, M. & St. P. Ry. Co.

COLE, C. J.

The plaintiff is a town insurance company, organized in April, 1875, under chapter 103, Laws 1872. It issued its policy to one Gottleib Schwantes, insuring him against loss or damage by fire or lightning to the amount of $800 on his buildings and personal property therein. During the life of the policy a loss occurred which was occasioned, as the jury found, by a fire starting on the defendant's right of way, and extending to the adjacent premises of the insured. The jury also found that the defendant was guilty of negligence in not keeping its right of way free from dry grass and other combustible material, which occasioned the loss. The insured sustained a loss by the destruction of his property exceeding the amount of his policy. The plaintiff paid him under its policy $626 in full payment and settlement thereof, and took an assignment of his entire claim for damages against the defendant. The plaintiff seeks to recover of the defendant $866, being to the full extent of the loss as alleged in the complaint, which the insured sustained, and under the ruling of the trial court had judgment for that amount, together with interest from the commencement of the suit. The real question in the case is as to the correctness of this ruling. On the part of the defendant it is insisted that the plaintiff had no power or authority to take an assignment from Schwantes of his claim against the defendant; that such assignment was void, and cannot be made the basis of an action against the defendant; that if the plaintiff is entitled to recover at all, it is only by reason of its right to be subrogated to the position of the insured to the extent of the amount paid him on its policy. To this it is said, on the other side, that if the plaintiff had not owned a part of the claim against the defendant for the loss at the time of the assignment it well might be that it could not purchase and enforce it; but, under the circumstances, the assignment was not ultra vires, because the plaintiff did in fact, by the payment of its policy, become the owner of a large part of the claim, which was indivisible, and that there is no principle of law which would prevent it from acquiring the interest of the insured therein, and recovering the whole claim.

We are disposed to adopt the latter view as correct. It is said the assignment in question was absolutely void as being taken by the plaintiff without either the express or implied authority of law. The statute authorizing the formation of these town insurance companies provides that the corporation so organized “shall possess the usual powers, and be subject to the usual duties, of corporations.” Section 1, c. 103. This, of course, restricted the company to the business of insuring the class of property mentioned and situated within the specified limits. In issuing its policy to Schwantes it is not pretended that the plaintiff exceeded its powers in any respect. It merely transacted...