190 A.D. 388 | N.Y. App. Div. | 1920
The demurrer was interposed upon the grounds that the complaint fails to state facts sufficient to constitute a cause of action and that there is a misjoinder of parties defendant in that the demurring defendant is not a necessary or proper party and that there is not and was not any privity of contract between the plaintiff and it.
It is alleged in the complaint that the plaintiff is a Pennsylvania corporation authorized to transact business here; that the defendant the Park & Pollard Company is a Massachusetts corporation having an office for the transaction of business in this State; that the defendants the Stuyvesant Insurance Company, which for brevity will be referred to as the Stuyvesant Co., and Edward E. Hall & Company are domestic corporations; that the defendant the Industrial Fire Insurance Company, which will be referred to as the Industrial Co., is an Ohio corporation lawfully doing business here; that prior to the 25th of May, 1918, the Stuyvesant Co. through its local agent at Oswego issued to the defendant the Park & Pollard Company a policy of fire insurance of $11,000 on grain and other merchandise in a warehouse at Oswego, N. Y., for one year beginning on the 16th of July, 1918, in renewal of a policy of the same company then expiring, and on the same day the Stuyvesant Co. reinsured $4,000 of the risk with the plaintiff; that on the 3d day of July, 1918, the defendant Edward E. Hall & Company applied on behalf of the Park & Pollard Company to the Industrial Co. for a like renewal for one year and fifteen days of the insurance of the Stuyvesant Co. which was to expire on the 16th of July, 1918, stating and representing that they were the agents of the Park & Pollard Company and authorized to handle all of its insurance at Oswego and promised for and on behalf of it that the said policy of the Stuyvesant Co. issued in renewal of said expiring insurance would be returned for
The Stuyvesant Co. and the Industrial Co. interposed separate answers, which were served on the insured, admitting and adopting many of the allegations of the complaint and particularly the allegations with respect to the agreement for the surrender and cancellation of the Stuyvesant Co.’s policy and each joins in the plaintiff’s prayer that the court shall determine the rights and interests of the respective parties as against one another, and the Stuyvesant Co. prays that its policy be canceled and the Industrial Co. prays that its policy be canceled. Defendant Edward E. Hall & Company also demurred and its demurrer was sustained and the complaint dismissed as to it, and in that respect the decision is not presented for review.
The only point now made by the appellant is with respect to its first ground of demurrer, namely, that a cause of action
It is well settled by the authorities and is conceded that there is not privity of contract between a reinsurer and the insured, or in other words between the plaintiff and the appellant, and that the reinsurer is not liable to the insured and is merely an indemnitor, hable only to the insurer whose risk is reinsured, and that a recovery on the policy of reinsurance inures not to the benefit of the insured but to the benefit of the general creditors of the reinsured. (Jackson v. St. Paul F. & M. Ins. Co., 99 N. Y. 124; Hastie v. De Peyster, 3 Caines, 190; Herckenrath v. American Mutual Ins. Co., 3 Barb. Ch. 63; Hoffman v. North British & M. Ins. Co., 35 Misc. Rep. 40.) It is a general rule that the plaintiff must be a party or privy to a contract to entitle him to maintain a suit in equity for its cancellation or rescission. (Guilfoyle v. Pierce, 125 App. Div. 504; affd., 196 N. Y. 499; Vrooman v. Turner, 69 id. 280; Simson v. Brown, 68 id. 355; Warnock Uniform Co. v. Garifalos, 224 id. 522; Empire Engineering Corp. v. Mack, 217 id. 85.) There can be no doubt, however, if the facts are as alleged, that the appellant is proceeding inequitably in attempting to enforce both policies for it represented that it only intended to procure and hold one renewal policy of reinsurance and it cannot now repudiate the representation, and in accepting and retaining the policy issued by the Industrial Co. it must be deemed to have ratified the representations and agreement of its agent on which the same was issued, and the Stuyvesant Co.’s policy, although it remained outstanding at the time of the fire, should and will be deemed to have been surrendered and canceled. (Davis & Son, Ltd., v. Russian Transport & Ins. Co., 182 App. Div. 668.) There can be no doubt, therefore, on the facts as alleged that appellant is entitled to recover only on one of the policies and that the plaintiff is not liable on both
The complaint does not show that the representation and
It follows that the interlocutory judgment should be reversed, with costs, and the demurrer sustained, with costs.
Dowling, Page, Merrell and Philbin, JJ., concur.
Interlocutory judgment reversed, with costs, and demurrer sustained, with costs.