Opinion
February, 1896.
Blumenstiel Hirsch, for plaintiff.
Jones Gilbert, for defendant.
Demurrer to the second defense. This action is brought against the defendant to recover a proportionate amount of loss sustained by the plaintiff's assignor upon a certain policy of insurance issued by several individuals, of whom the defendant is one, known as the New York Central Lloyds. The complaint sets forth that on or about the 12th day of March, 1895, in consideration of the sum of $50, the defendant and certain other individuals, acting separately, however, and not one for the other or any of the others, did, by an instrument in writing, duly subscribed by him (defendant) through Clark Fitzgerald, the agents and attorneys in fact for the defendant, agree to insure one Jacob H. Cohn, of Chicago, to the amount set opposite the name of defendant, and of said other individuals known as the underwriters of the New York Central Lloyds, in the sum of $5,000, for the term of one year from the 5th day of March, 1895, against all direct loss or damage by fire to the property mentioned and described in a certain policy, which was then issued, duly subscribed by the defendant and the other underwriters, known as policy No. 18668, which policy of insurance was duly issued to the said Jacob H. Cohn through Clark Fitzgerald, the agents and attorneys in fact for the said defendant and the other underwriters; that the amount which the defendant agreed to be responsible for in the policy was the sum of $192 8-26; that a fire occurred on March 26, 1895, whereby the property insured was damaged in the sum of $79,859 50-100; that thereafter the loss was adjusted by adjusters duly representing the New York Central Lloyds and the defendant, and fixed at $52,000; and that the amount of loss applicable to the said policy pursuant to the adjustment was the sum of $3,795 77-100, and the said Clark Fitzgerald, acting for the defendant and the other underwriters, agreed to pay the same to Cohn; that all the terms and conditions of the policy required to be performed by Cohn were duly complied with; that by the terms of said policy, duly executed by the defendant, it is provided that in no event or contingency shall any underwriter be liable for any portion of the other underwriters' liability, and that the liability assumed by each underwriter shall be separate and individual as if each underwriter had issued or subscribed a separate policy, their liability being several and not joint; that prior to the commencement of the action the claim was assigned to the plaintiff, and that the proportionate amount of loss as adjusted which, by the terms of the policy, the defendant is liable to pay is the sum of $145 99-100, payment of which has been demanded and refused.
The defendant by his answer admits the issuance of the policy by himself and other individuals known as the underwriters of the New York Central Lloyds, and that the amount which the defendant agreed to be responsible for under the policy is correctly stated in the complaint. All the other allegations in the complaint are denied, and then as a separate defense it is alleged as follows: "For a second and separate answer and defense herein this defendant alleges that under the terms and conditions of said contract and policy of insurance mentioned in the complaint it was mutually agreed between the assured and this defendant, and each one of said underwriters, that no suits or other proceedings at law, or in equity, should in any event be begun or maintained by the assured for the recovery of any claim upon, under or by virtue of said policy, or to enforce the provisions thereof against the individual underwriters thereon, or any of them, or against the defendant, until after suit shall have been brought against Milton Clark and John W. Fitzgerald, as attorneys in fact, for the full amount of the loss or claim, or full and complete relief claimed under said policy, and until after the final determination of such suit or proceeding — it being further mutually agreed that the time required for the final determination of said action, and thirty days thereafter, should not be considered as any part of the twelve months limitation mentioned in said policy. This defendant alleges that these covenants and agreements provided that such action against the said Clark Fitzgerald, as attorneys in fact, was a condition precedent to the beginning of this action; that no such suit against Clark Fitzgerald has been commenced by plaintiff and the said condition has not been complied with, and the plaintiff cannot now maintain this action."
I am of the opinion that the demurrer must be sustained. The condition precedent set up in the second defense requires plaintiff to bring an action at law upon a contract against certain persons who never were parties to the contract, and never, by devolution, assumption, novation or otherwise, assumed any obligation thereon; that is, it requires the plaintiff to bring an action against persons against whom he has no cause of action. This provision is against public policy, and, therefore, void. This case is to be distinguished from that class of cases in which the obtaining of the certificate of an architect or engineer as to the amount and value of the work done is made a condition precedent to the commencement of an action. Such conditions precedent were before the courts in Byron v. Low, 109 N.Y. 291, and Sweet v. Morrison, 116 id. 19, and were held valid.
The demurrer is sustained, with costs.
Demurrer sustained, with costs.