45 Misc. 2d 847 | N.Y. Sup. Ct. | 1964
Plaintiff, a New York corporation, sues for damages allegedly caused by the defendant insurance company’s breach of an indemnity insurance policy issued in 1958, wherein defendant insured a third party (Kingston Steamship Coup.) against certain risks to a vessel then owned by Kingston. An indorsement was then issued which named another corporation — Inland Credit — as loss payee, as first preferred ship mortgagee. It appears, however, that Kingston’s debt to Inland was later paid and Inland’s status as first mortgagee extinguished, although the indorsement itself was never changed to reflect this fact. Kingston thereafter issued a first preferred ship mortgage to another corporation — Empire Commercial — which then assigned the mortgage to plaintiff. Plaintiff’s rights asserted herein allegedly arise out of this assignment and a later agreement between Kingston and plaintiff' wherein plaintiff’s status as mortgagee was expressly
Plaintiff, after fruitless correspondence with defendant, then instituted this action to recover the amount of the settlement paid, plus its expenses incurred in the settlement. The action was instituted by the service in proper form of the summons and complaint upon the 'Superintendent of Insurance of this State, purportedly pursuant to section 59-a of the Insurance Law; for defendant is a California corporation.
Defendant now moves to dismiss the complaint on the grounds that (a) this court does not have jurisdiction over defendant, for section 59-a is inapplicable under the circumstances herein; (b) the cause asserted is time-barred; and (c) the complaint is legally insufficient and fails to allege a cause of action. The portions of the motion denominated (a) and (c) above are interrelated, for both are founded in part upon the claim that plaintiff has no legally cognizable rights under the insurance policy concerned. If this assertion is correct, the manner of service would be improper (for section 59-a may be used only by an insured or a beneficiary of certain insurance contracts), and this court would lack jurisdiction in the premises. As a necessary corollary thereto, the cause asserted would be defective. Accordingly this question will be first discussed.
The general rule prevents suits on insurance policies by those not party to the insurance contract, save where a contrary result is dictated by statute (see Burke v. London Guar. & Acc. Go., 47 Mise. 171, affd. 126 App. Div. 933, affd. 199 N. Y. 557). No such statute is here operative, for section 167 of the Insurance Law, which does extend the right to sue on the policy to certain other parties, excludes marine protection and indemnity policies from its scope. Plaintiff, however, claims that by virtue of the status, above described, it is an equitable beneficiary under the policy and, therefore, entitled to the benefits of section 59-a and to maintain the action. In the mortgage and first
Plaintiff’s reliance upon Kaye v. “ John Doe” (204 Misc. 719), is misplaced, for there the court held only that injured parties may, where the assured became insolvent, be deemed ‘ beneficiaries ’ ’ of the insurance contract and entitled to sue thereon, as well as utilize the provisions of section 59-a of the Insurance Law. The basis for this decision was that * as the injured persons, they are within one of the two classes of those distinctly intended and desired to be protected by the statute ’ ’ (id., p. 724; see, also, Bakker v. Ætna Life Ins. Co., 264 N. Y.
By then voluntarily making the payment, plaintiff prevented defendant from defending against the Todd claims. There were other remedies available to it if defendant failed to meet its obligations under the insurance contract. Defendant was not obliged to settle or attempt or settle claims against its insured (Auerbach v. Maryland Cas. Co., 236 N. Y. 247). As the insured would have been barred from settling the claim without defendant’s consent and then seeking recovery of the amount of the settlement from defendant (see Upton Coal Stor. Co. v. Pacific Coast Cas. Co., 162 App. Div. 842), so plaintiff is barred (Matter of Brown Bomber Baking Co. [Fiske], 293 N. Y. 141). In any event, it appears that plaintiff would be time-barred from suit on the policy under the short period for doing so provided in the insurance contract (Karl v. Concordia Fire Ins. Co. of Milwaukee, 95 N. Y. S. 542, affd. 276 App. Div. 971; Brandyce v. Globe & Rutgers Fire Ins. Co., 252 N. Y. 69).
For all of the foregoing reasons, the motion must be granted and the complaint dismissed.