Johannes v. Phœnix Ins. Co. of Brooklyn, N.Y., Impleaded

• Decision Date: 06 April 1886
• Citation: 27 N.W. 414,66 Wis. 50
• Parties: JOHANNES v. PHŒNIX INS. CO. OF BROOKLYN, N. Y., IMPLEADED, ETC.
• Court: Wisconsin Supreme Court

66 Wis. 50

27 N.W. 414

JOHANNES

v.PHŒNIX INS. CO. OF BROOKLYN, N. Y., IMPLEADED, ETC.

Supreme Court of Wisconsin.

Filed April 6, 1886.

Appeal from circuit court, Eau Claire county.

This is an appeal from an order overruling a demurrer to the complaint for insufficiency, as against the appellant. The complaint alleges, in effect, the incorporation of each of the defendants, and their right to do insurance business in Wisconsin; that July 1, 1883, the defendant the Standard Fire Office of London, Limited, for a premium or consideration then paid, insured the plaintiff's property, described by an insurance policy in writing, (No. 134,814,) against loss or damage by fire, to the amount of $1,650, from July 1, 1883, to July 1, 1886. The complaint then contains the following allegations: And the plaintiff further alleges that subsequent to the making and issuing of said policy the defendant the Phœnix Insurance Company of Brooklyn, New York, being desirous of acquiring and purchasing the business and good-will of its co-defendant herein, and the defendant the Standard Fire Office of London, Limited, aforesaid, being desirous of reinsuring its risks upon property in the United States of America, and having withdrawn from business in the United States, the said defendant corporation, on or about the second day of January, 1884, made and entered into an agreement in writing, duly executed under seal by each of said defendants, wherein and whereby, for a valuable consideration, the defendant the Phœnix Insurance Company, aforesaid, reinsured all the risks of the defendant the Standard Fire Office of London, Limited, upon property situated in the United States of America, from 12 o'clock noon, in New York, on the first day of January, A. D. 1884; and agreed that all losses arising under the policies of the said defendant the Standard Fire Office, Limited, upon property situated in the United States of America should, after that time, be borne by the said Phœnix Insurance Company, and should be paid, satisfied, and discharged by it; and received in part payment therefor an assignment of the $200,000 in bonds of the United States, which had been deposited by its co-defendant in the state of New York, as required by law, for the benefit and security of the policyholders of its said co-defendant the Standard Fire Office of London, Limited, residing in the United States; and thereby reinsured the risk upon the property mentioned in the policy hereinbefore described, and agreed that the loss of this plaintiff arising thereunder should be borne, paid, satisfied, and discharged by said Phœnix Insurance Company, which thereupon became owner of the good-will, original documents, and books of its co-defendant herein, relating to the risks aforesaid, and assumed control of the same, and of the business pertaining to said risks, policies, and losses. The complaint further alleges, in effect, that July 4, 1884, and while said policy was still in force, the assured property was destroyed and lost by fire; that there was other insurance on the property in still other companies; that the plaintiff gave notice of loss to the defendants; that within 30 days he rendered a particular account of said loss as he was requested and required to do by them and their authorized agents and adjuster, at considerable trouble and expense to the plaintiff, and was informed by the defendant that no further proofs would be required; that thereupon the appellant denied its liability to pay said loss under said policy, and refused to pay the same, on the ground that the policy had been reported as written for one year only, instead of three years, and that it did not reinsure said risk; that the defendants had waived further notice or proofs of loss; that 60 days had elapsed before the commencement of this action, and since said notice and proofs of loss and the waiver of further proofs; that the plaintiff had performed all of the conditions of the policy on his part; that the proportionate amount which the defendants were liable to pay to the plaintiff was $1,402, with interest, for which amount he demands judgment.George C. Teall, for respondent.

L. M. Vilas, for appellant.

CASSODAY, J.

A policy of fire insurance is a contract of indemnity. Darrell v. Tibbitts, 5 Q. B. Div. 560. By such contract the insurer agrees to compensate the assured for loss by fire of certain property, for a given time The existence of such contract gives the insurer an insurable interest in the property insured, co-extensive with its liability. Delaware Ins. Co. v. Quaker City Ins. Co., 3 Grant, Cas. 71; New York Bowery Fire Ins. Co. v. NewYork Fire Ins. Co., 17 Wend. 359. Here the Standard Fire Office of London insured the plaintiff's property for three years from July 1, 1883. After doing so it became desirous of reinsuring its risks upon property in the United States, and withdrawing from business in the United States. The Phœnix Insurance Company of Brooklyn was at the same time desirous of acquiring and purchasing the business and good-will of the Standard Company. Accordingly the two companies made the agreement set forth in the statement of facts, on January 2, 1884. At that time the plaintiff's policy had two years and a half more to run. Of course the Standard Company had an insurable interest in the plaintiff's property commensurate with its liability. The agreement between the two companies, as alleged, was based upon a sufficient consideration. Its validity is not assailed. The contention is that the contract between the two companies is confined strictly to them, and that the plaintiff under his policy issued by the Standard has no privity in the contract made by the Phœnix, and can maintain no action thereon against the Phœnix. In other words, that it was strictly a contract of reinsurance by the Standard Company, solely for its own benefit, and not for the benefit of any of its then existing policy-holders in the United States.

In support of such contention the learned counsel for the appellant cites several cases. Some of these cases, and perhaps some others, will now be considered, as the question may be regarded as new. In doing so we shall confine ourselves very much to the wording of each particular contract adjudicated, for the question presented is, after all, one of contract. The construction given to one contract may essentially aid the construction of another; but this is so only where the clauses of the two contracts to be construed are substantially alike. Some of the cases cited were upon contracts of strict reinsurance, as above defined, and clearly sustain the position of counsel, if the contract here is to be so restricted. Hastie v. De Peyster, 3 Caine, 190; Herckenrath v. American M. Ins. Co., 3 Barb. Ch. 63;New York Bowery Fire Ins. Co. v. New York Fire Ins. Co., supra; Hone v. Mutual Safety Ins. Co., 1 Sanf. 137; S. C. 2 N. Y. 235;Carrington v. Connecticut F. & M. Ins. Co., 1 Bosw. 152; Blackstone v. Alemannia Fire Ins. Co., 56 N. Y. 104;Strong v. Phœnix Ins. Co., 62 Mo. 289;Gantt v. American Cent. Ins. Co., 68 Mo. 503;Delaware Ins. Co. v. Quaker City Ins. Co., supra.

Thus, in Hone v. Mutual Safety Ins. Co., supra, the defendant, by the policy of reinsurance, “promised and agreed to make good to the American Mutual Insurance Company all such loss or damage,” etc. So, in ...