Svea Assur. Co. of Gothenberg, Sweden, v. Packham
| Decision Date | 18 January 1901 |
| Parties | SVEA ASSUR. CO. OF GOTHENBERG, SWEDEN, v. PACKHAM et al. |
| Court | Maryland Court of Appeals |
Appeal from circuit court No. 2 of Baltimore city; George M. Sharp Judge.
Bill by the Svea Assurance Company of Gothenberg, Sweden, against Eldridge Packham, Jr., and the Consolidated Gas Company of Baltimore, to restrain the latter from paying, and the former from receiving, the amount of a judgment for loss caused by the gas company, and to compel such company to pay the amount thereof into court. From a decree dismissing the bill complainant appeals. Affirmed.
Argued before McSHERRY, C.J., and PAGE, PEARCE, FOWLER, BOYD, JONES BRISCOE, and SCHMUCKER, JJ.
Taylor & Keech, for appellant.
George Whitelock, J. Alex. Preston, Robert Ludlow Preston, and Wm A. Fisher, for appellee.
Eldridge Packham, Jr., who traded as E. Packham, Jr., & Co., had his stock of goods and merchandise insured in nine companies, for the sum of $22,500, which included a policy issued by the appellant for $3,000. While the policies were in force a fire occurred, and Mr. Packham furnished proofs of loss to the companies, amounting in the aggregate to $18,660, but the appraisers appointed under the provisions of the policies only allowed $17,360, which he received, less certain discounts. It was claimed that the fire, which occurred on December 22, 1898, was the result of the negligence of the Consolidated Gas Company of Baltimore City, and on February 1, 1899, before the insurance money was paid. Mr. Packham instituted a suit against that company, claiming $50,000 for the destruction of the stock in trade and other losses, which we will have occasion to refer to. That suit resulted in a verdict for the plaintiff for $18,000, the amount having been agreed upon after the trial commenced. Interrogatories were submitted to the jury to ascertain the loss on the stock of merchandise and the loss to the profits in plaintiff's business, and each was answered by fixing the amount at $9,000. Judgment was entered on the 28th day of November, 1899, for the $18,000, and on the 1st day of December it was paid to the plaintiff, and the judgment was entered "Satisfied." On the next day Mr. Packham prepared a statement, showing his calculation of the distribution of the $9,000, less expenses and costs, to the Insurance companies, which was sent to their representatives, with the request that they examine it, and advise him whether they found it correct. Six of the companies accepted the amounts thus distributed to them, and since the bill was filed one of the original complainants in this cause, the Palatine Insurance Company, Limited, of Manchester, England, accepted that distributed to it, and the bill was dismissed as to that company. The Svea Assurance Company by that distribution would only receive $805.37, while it claims $2,317.27, being the amount it paid Packham. This bill was filed by those two companies against Eldridge Packham, Jr., and the Consolidated Gas Company of Baltimore City, to prohibit the latter from paying, and the former from receiving, the amount of the judgment, to require the gas company to bring it into court for distribution, and to have the court take jurisdiction over the fund. The theory upon which the bill seeks relief is that the complainant and the other companies were entitled to be subrogated to the rights of Packham to the fund recovered from the gas company, to the extent of the amounts paid by them respectively, and the appellant denies his right to compromise the claim against the gas company, to retain one-half of the amount received, and to allow counsel 30 per cent. of the amount recovered.
1. The policy of the appellant contains the following clause: "If this company shall claim that the fire was caused by the act or neglect of any person or corporation, private or municipal, this company shall, on payment of the loss, be subrogated, to the extent of such payment, to all right of recovery by the insured for the loss resulting therefrom, and such right shall be assigned to this company by the insured on receiving such payment." When the money was paid to Packham by the appellant, what is called a "subrogation receipt" was signed by him, which, in effect, followed the provision of the policy. In the recent case of Packham v. Insurance Co., not yet officially reported, but to be found in 46 A. 1066, an insurer's right of subrogation was considered and fully recognized. That case arose out of the same transactions that are now before us. Packham sued that company to recover the amount alleged to be due on a policy on office furniture and fixtures which were destroyed by this fire. The question was presented there by a demurrer to a plea of the defendant, setting up the suit against the gas company, and the verdict entered by agreement, as a bar to the action. The recovery against the gas company, by the direction of Packham, did not include any compensation for loss incurred under that policy, and there was no reservation of any right for the protection of that company. It was held that the plaintiff could not recover, as there could be no further recovery against the gas company, and the plaintiff had destroyed the defendant's right of subrogation under the policy. The general principle was thus stated: "Contracts of marine and fire insurance are essentially contracts of indemnity, and, if the insured recovers the amount of his loss from any source, the insurer may recover from him pro tanto, and this right is called the subrogation of the insurer into the rights of the insured." It is therefore useless to cite other authorities to sustain that doctrine, which has been generally adopted by the courts in this country and England. This case presents some facts, however, which distinguish it from the one above referred to in some important particulars.
2. It will be remembered that the suit brought by Mr. Packham against the gas company was instituted in February, 1899 while the insurance companies did not settle the losses until several months afterwards. Messrs. Whitelock and Colton represented him under an agreement by which they received $250 as a retainer, and were to receive 30 per cent. of the amount recovered from the gas company. When the insurance companies settled, Mr. Whitelock communicated with the representatives of several of them, including Mr. McCaffrey, who represented the appellant, and stated to them he thought it desirable that all of the companies should co-operate with Mr. Packham, and take such part as they deemed compatible with their interests, so far as it could be done without conflict with Mr. Packham's rights. Mr. Keech was subsequently employed by the appellant, and Mr. Whitelock told him that he had reached the conclusion that there could only be one recovery against the gas company, and that in the name of Mr. Packham, and, as he (Mr. Keech) represented two of the companies, he and Mr. Colton had determined to offer him a pro rata part of the fee for which they had arranged with Mr. Packham, if he would go into the case and assist at the trial. Shortly afterwards Mr. Keech wrote to Mr. Whitelock, and, after stating that he had been looking into the authorities, said: That was dated October 19, 1899, and the same day he did bring the two suits against the gas company for his clients. Those cases remained on the docket until January, when the gas company filed a petition in this case requiring those two companies to elect between the suits at law and this bill, and they elected to try this cause, and the actions at law were dismissed on the 30th day of January, 1900. Mr. Whitelock testified that he did not communicate further with the complainant, as he regarded Mr. Keech's action as a refusal to unite with them in the prosecution of the suit against the gas company. In that he was evidently correct; for, although Mr. Keech did offer to give him and Mr. Colton any aid he could, he refused to go into the case brought by them, and said he had reached the conclusion that the only way his clients could be adequately protected was by separate suits by them, which he at once instituted. After the judgment was obtained he ascertained, on further investigation of the subject, that he was mistaken in his original position, and then for the first time made claim to any part of the amount to be recovered in the name of Packham for the benefit of his clients. He was probably misled by the decisions in jurisdictions where statutes or the rules of practice authorize such suits, and the case of Packham v. Insurance Co., definitely settling the question in this state, had not then been decided. The suit of Packham against the gas company came up for trial on November 27, 1899. During the first day of the trial Judge Fisher, of counsel for defendant, suggested the possibility of reaching an agreement as to the amount of a verdict. After court an arrangement was made for a conference that night. Mr. Whitelock communicated with the representatives of other companies, but did not send word to Mr. McCaffrey, because, to use his language, "I interpreted Mr. Keech's letter of the 19th of October as a positive refusal to look to our case as a means of...
To continue reading
Request your trial