Turner v. New Brunswick Fire Ins. Co. of New Brunswick

• Decision Date: 05 April 1941
• Docket Number: No. 4587.,4587.
• Parties: TURNER et al.v.NEW BRUNSWICK FIRE INS. CO. OF NEW BRUNSWICK, N. J.
• Court: New Mexico Supreme Court

45 N.M. 126

112 P.2d 511

TURNER et al.

v.NEW BRUNSWICK FIRE INS. CO. OF NEW BRUNSWICK, N. J.

No. 4587.

Supreme Court of New Mexico.

April 5, 1941.

Appeal from District Court, Grant County; George W. Hay, Judge.

Action by Jesse L. Turner and another against the New Brunswick Fire Insurance Company of New Brunswick, New Jersey, on a fire insurance policy. From a money judgment for plaintiffs, defendant appeals.

Affirmed.

One possessing general property rights in a chattel or chose may qualify as a “real party in interest” in an action essential to protection of such rights, despite the fact that another likewise may qualify as a “real party in interest” in an action relating to same chattel or chose, if essential to protection of a special property right therein.

Wilson & Woodbury, of Silver City, and Jones, Hardie, Grambling & Howell, of El Paso, Tex., for appellant.

Alvan N. White and Clyde T. Bennett, both of Silver City, for appellees.

SADLER, Justice.

This is an appeal from a money judgment entered on a jury verdict in an action on a fire insurance policy. Only two questions are presented for review. The first is whether the trial court erroneously held that the action was commenced by plaintiffs who were the real parties in interest within the twelve months' period of limitation contained in the policy. The second is whether, as a matter of law, swearing to a false inventory by one of the plaintiffs, without knowledge that it was false and without any intention to defraud the insurance company, defeats recovery under the policy provision declaring fraud or false swearing touching the insurance or subject thereof shall render the entire policy void.

The facts from which arises the first question presented are these: The policy sued upon was issued May 1, 1938. It covered a stock of merchandise. The fire occurred September 19, 1938, resulting in the destruction of the merchandise insured. On October 8, 1938, the plaintiffs assigned in writing to each of three creditors, separate amounts aggregating the face of the policy in the sum of one thousand dollars from the moneys due or to become due from defendant, with full power in the assignee to collect and receipt for the amount assigned and to demand and sue therefor. Each assignment also expressly authorized the defendant to pay over the amount stipulated to the assignee named. The assignments were executed as security for debts severally owing by the plaintiffs on open account to each assignee.

These assignments were outstanding when plaintiffs filed their complaint seeking recovery under the policy. Subsequently, and prior to trial but more than a year after the fire, each of the assignees reassigned and relinquished unto the plaintiffs all rights and interests under the respective assignments, each relinquishment reciting that plaintiffs should be reinvested with as full and complete rights under the policy as if the assignment had never been executed.

The policy contained a provision as follows: “Suit. No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, nor unless commenced within twelve months next after the fire.”

The defendant's position briefly stated is this: The mere filing of suit within one year after the fire is unavailing if the plaintiff filing it is not the real party in interest. 1929 Comp., § 105-103. The plaintiffs, although suing within the year stipulated in the policy provision just quoted, were not the real parties in interest because they had assigned away all moneys to become due under the policy. And the reassignments to them, executed more than a year after the fire, were ineffective to give plaintiffs character as real parties in interest at any period of the time from the filing of their suit to expiration of the one-year period of limitation. So runs the argument of the defendant.

[1] The plaintiffs meet the defendant's contention squarely on the merits. They make no claim, as defendant seems to have anticipated, that the policy provision stipulating a one-year limitation period is void because it shortens the statutory period of six years for commencing actions on written contracts. We have held such a contention is not well taken. Electric Gin Co. v. Firemen's Fund Insurance Co., 39 N.M. 73, 39 P.2d 1024. They argue vigorously, however, that an assignment for security only leaves assignor the equitable and beneficial owner of the chose assigned and that he still may maintain an action in his own name as the real party in interest. In this contention we think the plaintiffs are correct. Stackpole v. Pacific Gas & Electric Co., 181 Cal. 700, 186 P. 354; Storm & Butts v. Lipscomb, 117 Cal.App. 6, 3 P. 2d 567; Globe & Rutgers Fire Insurance Co. v. Jewell-Loudermilk Co., 36 Ga.App. 538, 137 S.E. 286; Grubaugh v. Simon J. Murphy Co., 209 Mich. 551, 177 N.W. 217; Louk v. Patten, 58 Idaho 334, 73 P.2d 949; Ford Hospital v. Fidelity & Casualty Co., 106 Neb. 311, 183 N.W. 656; Allen v. Protected Home Circle, 112 Kan. 576, 212 P. 95; Griffey v. New York Cent. Ins. Co., 100 N.Y. 417, 3 N.E. 309, 53 Am.Rep. 202; Lang v. Eagle Fire Co., 12 App.Div. 39, 42 N.Y.S. 539; Mercantile Trust Co. v. Gimbernat, 143 App.Div. 305, 128 N.Y.S. 751; Collins v. McWilliams, 185 App.Div. 712, 173 N.Y.S. 850. See, also, text discussions in 8 Couch on Insurance, § 2056 and 6 C.J. S., § 122, page 1169, under Assignments.

In Lang v. Eagle Fire Co., supra, the plaintiff's right to maintain the action was challenged on the ground that he was not the real party in interest. Following the fire he made an assignment or order for the payment of money similar to those executed by the plaintiffs in the case at bar. Denying the contention, the court said [12 App.Div. 39, 42 N.Y.S. 544]: “The third point urged upon the attention of the court is that the plaintiff is not the real party in interest, and, therefore, not entitled to maintain this action. The evidence in the case discloses the fact that, upon the day following the fire, the plaintiff assigned to his mother all moneys due and owing him, or to become due and owing him, upon the policy in suit. But it further appears that such assignment was not an absolute one, but was intended merely as collateral to an indebtedness which the plaintiff owed his mother. And this, of itself, would be a sufficient answer to the defendant's contention; for, if the plaintiff's right of action against the defendant was pledged as collateral security merely, he undoubtedly retained sufficient interest therein to entitle him to maintain this action.”

[2] Under the peculiar language of the assignments or orders to pay here involved, no one assignee possessed the right to sue for recovery of the entire amount of the policy, but only for the stipulated portion thereof assigned to him or it. After the recital of a consideration and following the assigning clause, each instrument has the language, “with full power to (the assignee) to collect and receipt for and sue for the assigned amount ***”. The instrument itself recites no formal transfer, assignment or delivery of the policy to any of the assignees. It remained with the insured, so far as the record before us discloses. Accordingly, if any one of the assignees should elect to sue, the suit necessarily would be one to recover only the amount named in the instrument held by such assignee. The right to maintain a single action to recover the full amount of the policy remained in the assignors (plaintiffs) alone. If they could not maintain it, no one else could.

[3][4] In effect, the plaintiffs pledged to the respective assignees a portion only of the proceeds of the policy. The general property in the thing pledged remained in the pledgors, the pledgee having but a special property therein as security for the payment of the debt secured. American Mortgage Co. v. White, 34 N.M. 602, 287 P. 702; Cf. Storm & Butts v. Lipscomb, supra. The mortgagee possesses no title to the thing mortgaged but a mere lien. Stearns Rogers Mfg. Co. v. Aztec Gold Min. & Mill. Co., 14 N.M. 300, 93 P. 706. Clearly, one possessing general property rights in a chattel or chose may qualify as a real party in interest in a suit or action essential to the protection of such rights. The cases and text citations hereinabove fully sustain this statement. This is true despite the fact that another likewise may qualify as a real party in interest in a suit or action relating to the same chattel or chose, if essential to the protection of a special property right therein. First National Bank v. Stewart, 13 N.M. 551, 86 P. 622; Eagle Mining & Improvement Co. v. Lund, 14 N.M. 417, 94 P. 949; Barnett v. Wedgewood, 28 N.M. 312, 211 P. 601.

The defendant quotes from our ...